Internal research and advances in technology have enabled operators to get to know their customers better than ever. But sometimes meeting consumers’ evolving beverages needs, such as the growing desire for personalization and customization, and winning their loyalty requires a bit of an old-school hospitality approach.
That was just one of many insights shared by executives who gathered together at the 2015 Beverage Marketing Roundtable held during the National Restaurant Association Restaurant, Hotel-Motel Show in Chicago.
Penton Restaurant Group — which publishes Nation’s Restaurant News, Food Management and Restaurant Hospitality — in collaboration with Whirley-DrinkWorks!, assembled beverage marketing leaders from some of the most progressive companies in the commercial and noncommercial foodservice industries. The foodservice executives gathered to share best practices for meeting consumers evolving needs, building loyalty, driving frequency and broadcasting the message to customers in an accurate and exciting way.
The roundtable was sponsored by Whirley-DrinkWorks!, a designer and manufacturer of high quality food and beverage containers.
Below are some high points from the roundtable discussion, moderated by Nation’s Restaurant News editor-in-chief Sarah Lockyer.
Participants:
- Donna Josephson, chief marketing officer, McAlister’s Corp.
- Josh Kern, chief marketing officer, Smashburger
- Tom Minella, national director of business development, Whirley-DrinkWorks!
- James Park, vice president of marketing and research and development, Which Wich
- Jeff Pente, senior director brand management, Sodexo
- Doug Reifschneider, vice president of marketing, Firehouse Subs
- Jonathan Tress, senior vice president of marketing, Quiznos
- Peter Zilper, vice president of operational excellence and food and beverage, Aramark Sport & Entertainment
Sarah Lockyer, Nation’s Restaurant News: Consumers are looking for customization across the board, even beverages. How do you satisfy that desire of the customer to make a personalized beverage or even a customized experience with the beverage?
Peter Zilper, Aramark Sport & Entertainment: You have to start understanding what the customer wants. It’s a component of qualitative understanding as well as quantitative understanding. Millennials’ flavor [profiles] and taste buds are so different than ours. From a customization standpoint, we started developing quite a bit around mixology on the alcohol beverage side. We’re doing batch cocktails now, as well as a lot of pairings. [We’re also] thinking about the brands, like Coca-Cola, which have tried to develop customization with technology, such as Freestyle. However, it doesn’t really work in a high-volume area, so we’ve really tried to work with them on developing their brand and executing that idea of customization. [It’s about] having brand experience areas where people can come in and be very engaged with the brand and the experience, but also customize their beverages to that degree.
Jeff Pente, Sodexo: We try to put out what we call hydration stations with fresh fruit … and we even have versions where there are taps with carbonated or flat water and fruit available [so] customers can enhance their flavor — with fresh watermelon or cucumber, those sorts of things. That’s where they’re driving at. Another important thing for our consumer is the local brand. If there’s a local soda person in town they go to when they’re away from campus, they want to see it on campus.
Donna Josephson, McAlister’s Corp.: At McAlister’s it’s not just the beverage, but also the food. Eighty percent of our food, even if it’s on the menu, is customized. So a customer will come in and say I want it this way or that way. Everything is handcrafted. So how do you take that message to the beverage? That’s what we’ve been looking at — [it has yielded] some of the most interesting concept groups and tastings that we’ve ever had. I know the most difficult challenge is that everybody wants their beverage as sweet as they want it with the flavors that they want. So that has kind of led us down the path of “How do you handcraft everything for them?”
Tom Minella, Whirley-DrinkWorks!: We're talking about customization and choices. We're on the campus with Freestyle at State University of New York at Binghamton. We've got a sister company called RFD technology that makes the mugs smart. A student with their meal plan can also purchase a mug package that's good for the entire semester. So you get people out of line. I have my mug that's good all semester, and it works to provide me with the customized beverage I want, wellness choices, sustainable, at the [campus] Freestyle machine . So it's just kind of another play that connects nicely to what the group has been talking about.
Doug Reifschneider, Firehouse Subs: Herman Cain, who was at Godfather’s [Pizza], would say Americans talk lean, but they eat fat. [First] it was the sodium, then the cholesterol, then the trans fats. There’s always a thing that’s the hot topic with consumers. I would say that it’s starting to stick because carbonated soft drinks are [declining in popularity]. The interesting thing about Freestyle is [there are 70-plus] no carb/low calorie drinks on the machine. So there are — I don’t know if I’d call them healthy options — but less bad options. I love that I can get carbonated water with the peach flavor. I can do whatever I want. It helps me have more choices. And I think that’s what I hear from the younger people, too.
Josephson, McAlister’s: A sweet tea [has fewer calories] than a carbonated beverage. In a 32-ounce serving, there’s between, depending, 80 and 120 calories. So it’s a little bit less than a full soda would have. But what we’re noticing is the carbonated beverage incidence continues to decline. People are migrating more to the handcrafted sodas, flavored waters, teas, fresh lemonades and fresh juices.
Minella, Whirley-DrinkWorks!: There may be a connection to the Millennial group having an interest in sustainability as well.
Jonathan Tress, Quiznos: We’ve had a proprietary lemonade for a long time. It’s still one of our top-selling items. We’ve seen lemonade being big for a while. And we’ve been expanding teas for years. Tea is a huge area for us. It’s just naturally good with sandwiches.
Lockyer, NRN: What efforts are being used to market the many choices to the customer in a way they understand it and don’t get too overwhelmed?
Tress, Quiznos: We find that the people at the registers are the best way to sell drinks and chips. If you get a person to suggest it, it sells better than any POP [point-of-purchase] piece.
Josh Kern, Smashburger: We have digital menu boards in 98 percent of our restaurants, which helps. In the evening, you can certainly put those messages up. I think the more words you put to it — you know, the classic Smash goes well with this beer, it’s a dark porter. Getting more descriptors out there helps customers understand it better.
Zilper, Aramark: We did a lot of research on menu boards and [learned] how to streamline the board and drive [consumers to purchase, again, to help them make that decision. There’s a lot there. I mean, when you’re looking at a menu board in a concessions environment, it’s not just about throughput and price point and bundles. It’s also about what your value proposition is. Your whole menu is right there, and you’ve got to drive them through it. Over time, we’ve developed a good perspective on what’s selling. We might have a perspective on what they think will sell. We’re now much more pointed in our combos and in our strategy that’s driving it. It’s helping folks at the point of sale make that decision faster. They’re grateful for that. They want to get back and see the game or socialize. I think that’s what’s happening more than anything.
Using beverages to increase customer loyalty
Lockyer, NRN: What does loyalty mean to you?
Tress, Quiznos: We have stores [that] open at 10 a.m., but they don’t do sales of soup that early. One time I was in a store at 9:45 in the morning. I said, ‘why are you making broccoli soup at 9:45 so hot?’ [The employee] said, ‘so-and-so is going to be in at 10:02 and gets a broccoli cheese every Tuesday.’
Josephson, McAlister’s: Starbucks has done a great job at what they do. One of the things that I’ve noticed about them is [that] I get the same rewards [as other customers]… It’s really not personalized. So when we talked about McAlister’s and what loyalty mean to us, it’s the personalization piece. That’s what’s in the pilot [program] of 100 restaurants that are completely integrated through the mobile app. We’re integrating our online ordering. So I’ll know what you’re doing when you come in. I’ll know if you don’t want the tomato on the sandwich. But then we can also surprise and delight the way we want. It gives us the opportunity to have a little bit of a punch card program for those who want that and say, ‘I came nine times, so I deserve something.’ But it also gives us a way to create in tiers and levels.
Kern, Smashburger: We’re piloting a program. We think that obviously your phone is the way that everyone is engaging. For Smash, we can’t use an app. We’re not like Starbucks where you’re going in every day. Our frequency is probably between 50 and 55 days in the cycle, so we’re trying to collapse that. The other part about it is we’re very granular. We have 315 restaurants. We look at every single restaurant in terms of its trade area and each one is unique in terms of what’s around. Each restaurant builds its own database in which it can deploy SMS text messages. For us, it’s trying to grow that database for each particular restaurant, collapse that frequency, and be able to talk to customers in different ways, depending on how [they] use the restaurant.
Zilper, Aramark: I think inherently the challenge is that very few people understand hospitality. When I ask people what hospitality is, I get all kinds of answers. It’s the same thing as if I ask you what is love. I don’t mean to get esoteric, but people struggle with that. The best definition I ever had about love is to give. We all understand hospitality when someone comes into your house, you give them nourishment and you make them feel great. When someone feels that love and hospitality, they come and come back. It isn’t about getting a free soda or coffee. You want to feel cared for. ‘You nourished me, you cared, you gave.’ I think that’s the answer here —
figure out love, figure out hospitality and people embrace that and come back.
Park, Which Wich: Loyalty. There’s the big technology component. You also have to understand the customer journey. You have to make sure every touch point is consistent as possible and as
personal as possible. When we look at loyalty, we step back. We say ‘okay, all of this technology is available to us.’ We’re very deliberate and cautious about the programs that we institute.
Minella, Whirley-DrinkWorks!: Make it easy [and] make it personal. [That’s] hospitality. It’s kind of the old-school customer service, and maybe a low-tech option. There’s lots of opportunity around driving frequency and loyalty in a low-tech fashion.
Lockyer, NRN: How are you using beverages particularly to drive that loyalty and frequency?
Josephson, McAlister’s: Obviously, for McAlister’s, beverage is the loyalty. We do the Free Tea Day event once a year as a gift back. We don’t ever discount the beverage to try and keep it iconic. A lot of people use the beverage as the freebie; we don’t do that. We don’t discount in general, but we’ll do the programs, like Free Tea Day, to entice people to come in.
Kern, Smashburger: Shakes for us are 16 percent of the business. It’s really, really high. There is something magical about a Smashburger, fries and a carbonated beverage, and certainly all of the reactions in terms of that overall package. The driver of that incident for us is critical. The magic is certainly yet to be discoverable.
Pente, Sodexo: In campus, our world is a little bit different. We have a program called “the grid.” It’s more of a community store, [and is] really trying to position the snacking parts of the day, putting them front and forward. By pairing drinks with the snack incidence, we’re trying to create an environment for folks to grab a beverage and run [or stop by] in between classes to hang out, recharge their equipment and have a snack while they’re doing it. It’s [all about] positioning and using LTOs as end caps to promote certain things at certain
seasons of the year.
Minella, Whirley-DrinkWorks!: There’s so much talk about loyalty programs. We like to think about low-tech versus high-tech and the ability to kind of connect high-tech. … Our thinking is, and the bridge we're looking to cross, real central to marketing campaigns and C-stores, is for a hot or cold beverage [in a] branded refillable vessel. … We do a lot of work with customers and where they came from and the C-store space around your mug and the consumer's house, car or office, and the ability to connect that and connect your social programs or loyalty programs to that mug. So the mug might have a refill value. It also might have some other value this month, this week or a manager special. … We're doing some work with Zoe's. They're becoming — I think everyone is talking about Chipotle, but they're maybe today's darling of fast casual. They're working really hard with the mug to introduce themselves to the area. It's part of their grand opening campaign, part of the way that they build local store and trade area marketing, to hand the mug out. … My connection to it is the ability to build your brand with your consumer in a low-tech fashion with a mug or vessel and then carry some value— it grows frequency and loyalty.
Park, Which Wich: At 3 p.m., I need a drink. Not an alcoholic drink, maybe something that gets me across the finish line. I’ve got three or four hours left in the day. There’s a lot more information than there ever was before, and a lot less time to consume that information. We need something to give us a boost in energy. I think it’s a key component. The generation wants energy. We believe there is a big push on energy, not energy drinks, but just energy in general.
Lockyer, NRN: What’s one thing or two things that you really wish beverage manufacturers — or even those in the beverage arena — provided to your brands to help drive that guest traffic? What do you really want to hear and see from your beverage partners?
Zilper, Aramark: For me, I think it’s [that] they focus so much on the channels and the products. They have so many menu extensions that it frankly gets confusing for the consumer. I wish that they would start focusing more on innovation and driving the experience around their brands.
Tress, Quiznos: It’s the speed at which they bring the innovation. A lot of times they’ll show something. For example, we have Pepsi, and from the time we see it, test it and put it in market, years [have past]. Not a year, but years — multiple years. I feel like they’re trying to innovate, but they also need to bring it to market faster. When they innovate, let’s do it.
Josephson, McAlister’s: I think from a packaging or an innovation perspective, we ask our vendors to come in and learn about who we are. Last year, Coca-Cola did that, and kind of changed the way they’re working with us a little bit. They’re still not fast, but they realize they need to be fast. Also, if you’re going to develop, maybe develop and don’t just give me the mass-marketed things. Talk to me about how you fit within [the] McAlister’s brand. We’re asking our vendors to take a look at what our brand means, what we’re moving towards, and how they can fit into that instead of us being pushed with their latest and greatest thing. Sometimes that’s going to work and sometimes it’s not.
