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Beverages: What Will Change the Trends in Commercial Foodservice?

Foodservice Brief — May 2015

Beverages have shown waning popularity in restaurants over the past several years. An improving economy was expected be a key impetus for increased beverage orders at restaurants. The thought was that as the economy and the job market improved, consumers would lessen some of their controlled spending behavior, particularly as it related to “check management.” Unfortunately, the reality is that consumers’ thirst for revenue-generating beverages continues to decline. Beverage purchases fell to new lows in 2014, with only 43 billion served at commercial outlets, including retail outlets like c-stores. If we go back even further in time, the trend is even more alarming. In 2007, prior to the recession, consumers ordered 48 billion beverages, excluding tap water.

Beverage Servings (in billions)
Excluding Tap Water

2009 2014 0 15 30 45 60
2009 46
2014 43

Menu Importance (%)

2009 2014 70 75 80
2009 76
2014 71

Source: The NPD Group/CREST®/years ending June

Carbonated soft drinks lost the greatest share

Over time, carbonated soft drinks (CSDs) have steadily lost share of total restaurant revenue-generating beverage servings. Many other beverages were able to maintain or grow share. Total revenue-generating beverage servings have declined by 4 percent since 2009. So while many beverages have maintained share, for most, servings have been negative. A handful of beverages have bucked the declining trend. Specialty coffees, bottled water, frozen/slushy soft drinks, tea (both iced and hot), and beverage alcohol all captured share and increased servings. In particular, beverages that grew during this time period were those that were new and deemed to be innovative, or those that provided a new twist on some traditional favorites.

Changing consumer preferences for beverages are a growing reality in today’s marketplace, just as we are seeing for food choices. The shift in mix of beverages served over the past six years is shown here for broad beverage categories:

Share of Beverages
Total Restaurants

Source: The NPD Group/CREST®/years ending December

Enticing consumers to order more beverages

There seems to be a growing trend for more beverage variety when viewing the types of beverages that are resonating most strongly with consumers. Along with the growing beverages that have found favor with consumers, there has been a sizeable lift in consumers opting to order only tap water. The tap water choice may reflect consumers substituting (free) water instead of paying for a beverage, or perhaps they consider water a healthier alternative to other beverages on the menu.

It’s key to understand what types of beverages consumers seek in restaurants and what restaurant operators can do to increase orders of this very important profit contributor. Achieving this goal will depend, in part, on the industry’s ability to satisfy consumer needs and develop and introduce unique, innovative beverage options. Additionally, as healthy food trends continue to grow, so will the desire for healthier alternatives in the beverage category.

Here are a few thoughts on what consumers might find appealing:

  • Signature beverages — Try offering one that is particularly unique to a specific restaurant.
  • Customized beverage orders — Offering new and different toppings, spices, syrups, and flavorings for beverages adds to the entertainment experience.
  • LTOs — These offers generate interest in beverage offerings, and LTOs based on seasonal ingredients have special appeal.
  • Larger serving sizes — Emphasize the fact that a larger-sized cold beverage is the best deal for the money, especially if you are not offering free refills. This also has a positive impact on increasing average check.
  • Smaller portions are in vogue — In some cases, small is the new big. For example, for a cold beverage like a milkshake, offer a mini portion to keep the calorie count down for those who are watching their weight, but want to indulge. This also creates a sense of value with a price that matches the portion size. Some is better than none.
  • Fresh-fruit smoothies and premium juice offerings — Consumers’ interest in these options is increasing as we see them seek healthy snack options.

But let’s not operate in a vacuum – find out what consumers really want. In a new report, we will evaluate consumers’ beverage choices – why they order one beverage over another, why they choose a specific outlet for their beverages, and the importance of variety in driving their decisions. This report will assist operators, retailers catering to the foodservice market, and suppliers in these channels in their effort to understand what’s important to their customers. Companies can use the report’s insights to renew their focus on consumers’ needs and wants, so revenue-generating beverage orders do not continue to decline.

To learn more about our report on what will take to increase beverage orders, please contact your NPD client service representative, call NPD Restaurant Analyst Bonnie Riggs at 847-692-1767, or email bonnie.riggs@npd.com.

To learn more about Checkout Tracking, please contact your NPD client service representative, call our restaurant analyst, Bonnie Riggs, at 847-692-1767, or email bonnie.riggs@npd.com.

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