How to Strengthen Cold Beverage Sales Throughout the Day
With warm weather finally here, cold beverage sales are about to take off. But this year’s beverage preference may vary from the past. While taste and refreshment will always be important, today, there is a greater emphasis on health & wellness and functionality.1 Consumers are seeking more choices beyond traditional offerings, as well as a variety of better-for-you beverages. From cold brew coffee and specialty iced teas to craft sodas and gourmet lemonades, the cold beverage category is evolving to meet modern consumer demand.
Did you know that beverages account for $1 out of every $5 consumers spend away from home?1 Now’s the time to evaluate your cold beverage program to make sure you’re not missing out on key sales opportunities, especially as beverage consumption expands beyond traditional mealtimes. As consumers seek out beverages as pick-me-ups, meals replacements and snacks,1 there is a greater opportunity to upsell beverages throughout the day.
Cold Brew and Iced Coffee
When the weather heats up, hot coffee sales often take a back seat to iced coffee and, now more than ever, cold brew coffee. Iced coffee sales continue to grow, reaching $5.1 billion in 2016 and predicted to hit $10.2 billion by 2021.2 Among American coffee drinkers, market penetration for cold brew rose to 21% in 2017, up from 15% in 2015, according to data from the New York–based National Coffee Association.3 Many operators see cold brew as a new revenue stream,3 especially when it comes to summer coffee sales.
Since making cold brew coffee from scratch can be labor-intensive, many operators are opting for premade concentrates and draft systems that provide consistent quality, 100% yield and zero waste. Want to get ahead of the cold brew trend? Consider offering nitro cold brew, which is simply cold brew coffee pumped through a special device that infuses it with pure nitrogen—or a combination of nitrogen and CO2—resulting in a creamier, foam-topped cold brew. A win-win for operators, nitro cold brew attracts customers with its Instagram-worthy “cool factor” while commanding a higher price point.
Specialty Iced Tea
According to the Tea Association of the USA, 80% of the tea consumed in the United States is iced.4 When it comes to summer refreshers, fresh-brewed iced tea is always a top choice among consumers. Fresh brewed carries a ‘healthy halo’ among loyal iced tea drinkers who believe it has real, functional health benefits.5 Variety and flavor are also driving iced tea consumption. Tropical, fruity flavors like pineapple, kiwi, peach, raspberry, mango and melon are currently trending, especially among millennials who continue to seek out innovation in the category.
While cold brew coffee is leading the way, cold brew tea isn’t far behind. Cold brew tea delivers a smooth, balanced flavor profile and on-trend delivery system. Expect cold brew tea to appear more often in the coming months. Kombucha, an effervescent probiotic-rich fermented tea, has exploded in popularity as both a ready-to-drink pre-bottled and an on-tap functional beverage. Kombucha is considered to be the fastest-growing segment in the global functional beverages industry with sales estimates of $1.8 billion by 2020.6 Additionally, domestic kombucha sales has a compound annual growth rate of 25% between 2015 to 2020.6
Consumers’ increased focus on health & wellness has led to a decline in traditional carbonated soft drink sales while opening up an opportunity in the category for better-for-you sparkling beverages. Gourmet soft drinks and craft sodas made in small batches from real ingredients and a variety of flavors have become increasingly popular. Therefore, it’s not surprising menu mentions of craft soda have increased by 10% in the last year and 40% over the last four years.7
Consumers are steering away from diet drinks and artificial sweeteners and opting instead for artisanal craft sodas made from fruit, natural sweeteners like cane sugar or agave, and in some cases, functional ingredients like herbal extracts. Small-batch craft sodas are free of preservatives and are being perceived as a healthy alternative to regular and diet sodas. In fact, three in five U.S. adults agree that all-natural carbonated soft drinks are healthier than those made with artificial ingredients.8 Craft sodas offer broad appeal and create a point of differentiation for your operation. Plus, they can command a higher price point than traditional fountain soda.9
What is better on a hot, summer day than frosty-cold lemonade? Today, the nostalgic beverage is getting a gourmet upgrade with premium ingredients and better-for-you claims. While fresh-squeezed lemonade will always be popular, the classic refreshment is getting infused with fresh fruits and veggies for a modern twist. Pink lemonade, strawberry, raspberry and blueberry are popular lemonade flavors. Meanwhile, the addition of ingredients like cucumber and mint adds a culinary touch and can even help upsell the beverage. Savory ingredients like kale and chili peppers are also adding big flavor to this humble drink.
Lemonade currently appears on over 60% of menus10 in a variety of formats, from milkshakes to cocktails. Combine lemonade with iced tea to recreate the classic Arnold Palmer, or blend lemonade with vanilla ice cream for a twist on the traditional creamsicle. You can even create your own signature craft soda by combining a splash of sparkling water with fresh fruit juice and lemonade. Lemonade pairs well with a variety of liquors for a seasonal cocktail or use it to top off a Weiss beer for a fresh summer shandy. And when it comes to lemonade menu descriptors, the term “organic” is up 19%, “seasonal” is up 7% and “fresh-squeezed” is up 5%.7
When the National Restaurant Association predicts craft sodas, cold brew coffee, gourmet lemonade and specialty iced tea are going to be among the top nonalcoholic beverages this year,11 it’s time to revisit your cold beverage program and make sure you’re set up for success. In addition to these on-trend refreshments, functional waters and coconut waters, plant-based dairy alternatives and botanical beverages like elderflower and aloe12 are also slated to boost beverage profits. While these drinks will be in demand all year long, you’ll want to make sure your summer offerings reflect these cold beverage solutions.
1 Technomic, “Consumers spend $181 billion annually on beverages in foodservice,” Sep. 12, 2017
2 Arnett, Lisa, “What Coffee Concepts are Tapping into Right Now,” Restaurant Business, Nov. 20, 2017
3 Perez, Marvin G., Cold Brew Might Save the Coffee Market, Bloomberg, Jul. 19, 2017
4 Tea Association of the U.S.A., 2018
5 Datassential, Proprietary Research for S&D Coffee & Tea, 2017
6 Troitino, Christina, “Kombucha 101: Demystifying The Past, Present And Future Of The Fermented Tea Drink,” Forbes, 2/1/17
7 Brienza, Laura, “Nonalcoholic Refresh,” Flavor & the Menu, Mar. 1, 2018
8 Mintel, Three in five Americans agree carbonated soft drinks made with natural Ingredients are healthier, Aug. 11, 2015
9 Meyer, Zlati, “Craft soda makers add fizz to flat soft drink sales,” USA Today, May 29, 2017
10 Datassential SNAPTM, 2018
11 National Restaurant Association, What’s Hot 2018 Culinary Forecast, 2017
12 Freier, lizzy, “4 trends on product developers’ minds,” Restaurant Business, Oct. 26, 2017