Menu Innovations | July 2012 | By Barney Wolf

No Fizz, No Problem

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While fountain drinks are a long-time staple at limited-service eateries, a number of outlets, including pizza parlors, sub shops, and fast-casual restaurants, also feature refrigerated cases that contain bottled or canned cold drinks.

The cans and bottles—glass or plastic—in fast-casual refrigerators, for instance, are often drinks not available at the fountain, including upscale carbonated beverages, flavored waters, teas, vitaminwater, and even beer.

As some mainline quick serves try to compete with fast casuals, they are considering adding their own refrigerated cases. Wendy’s is testing several ideas at its new prototype units, including a refrigerated case that includes some regular items (bottled water, milk and chocolate milk, and packaged apple juice) as well as nontraditional ones, such as canned NOS energy drinks.

The units are also trying out several iced coffees and Coca-Cola’s Freestyle dispensing machines, which offer Coke’s Dasani still water and other brands in a variety of flavors.

Wendy’s continues to measure customer feedback, sales, and costs for all these offerings, says company spokesman Denny Lynch.

Firehouse Subs is already sold on the customization potential of the Freestyle dispensers. The chain last year completed installation of the machines in all 500 of its restaurants.

“There are so many possible drink permutations,” says Don Fox, CEO of the Jacksonville, Florida–based company. “The Dasani water, for instance, has seven different flavors and those can be mixed any way the customer wants.”

The Freestyle offers more than 120 drink options, and that “certainly adds value,” Fox notes. “It’s all about segmentation and satisfying the consumers.”

Even with all of the beverage possibilities, Firehouse would not have added the machines if Coca-Cola did not include one thing not typical for the beverage company: a noncarbonated cherry syrup drink for making the chain’s cherry limeade.

Cherry limeade makes up 21 percent of the chain’s beverage sales.

“When our first restaurant opened in 1994, the cherry limeade was hand mixed,” Fox says. “Later we went to a mix [for the cherry drink’s base], but the founders weren’t really happy with it, so it was never sold outside Jacksonville.”

Within the past four years, however, the cherry base was deemed good enough to go system-wide. Guests squeeze lime wedges into the cherry drink to make limeade.

“We know it’s expensive to do that, but we build that into our cost of doing business,” Fox says. “It adds a quality halo to our beverage offerings.”

The Freestyle has helped Firehouse attract more dine-in business, particularly among families, and boosted the average ticket from $10.25–$10.50 to $11.25–$11.50.

One chain that combines a coffee house with a fast-casual bakery-café is Cosi. The company resulted from the 1999 merger of Xando Coffee and Bar with Cosi Sandwich Bar and provides guests a range of cold beverages, from coffees to specialty lemonades.

“We think it’s important to our guests to give them the combinations they want,” explains Keith Stewart, marketing director of the Deerfield, Illinois–based chain.

The company has seen an increase in customer demand for water products, but not at the expense of other beverages. “It’s additive,” Stewart says, “particularly with drinks like smartwater and vitaminwater,” which include electrolytes, minerals, vitamins, and herbs.

Cosi also has made a point of creating proprietary cold teas and coffees, including Ginger Green Tea, which the company will be premiering this year. And then there are the lemonades: Strawberry Pomegranate and Mango Pomegranate.

This year, Habanero Watermelon Lemonade, a limited-time offer, will return. The sweet drink, which has a hint of heat, arrives with four big pieces of watermelon on a skewer.

“We have so much produce on our menu that it’s easy for us to have strawberries to garnish a beverage or to add watermelon to our order,” Stewart says.

At Quiznos, beverages “are a very integral part of our offerings,” says Zach Calkins, vice president of culinary creations. “It’s a natural fit to combo” a drink with food.

Tea and noncarbonated bottled beverages, particularly waters, are popular with salads.

Last year, Quiznos, with about 2,300 U.S. locations, relaunched its tea offerings with three new blends: unsweetened, black tea infused with raspberry, and green tea with lemon, lime, and honey. Sweet tea is available at locations in the South.

The Denver-based company is also upgrading its lemonade. A new honey lemonade was tested last year in six markets and is now rolling out system-wide. Franchisees can choose this variety or the traditional raspberry lemonade.

“It’s optional,” Calkins says. “Markets like Salt Lake City and Albuquerque love this new lemonade, while markets in the South want the raspberry lemonade.”

Quiznos also offers a wide range of Pepsi’s Sobe bottled beverages. While some varieties, like green tea, consistently do well, the company regularly switches flavors in and out.

“We rely on our partnership with Pepsi to see where consumers are and what they want,” Calkins says. “It depends on what is popular in a particular area. They may tell us that a drink is really moving and recommend we put that in our cooler.”

The idea of having many beverages available gives customers plenty of choices, so there is less chance for drinks to result in a veto vote.

“By having all these options, we have not seen a downtick in our carbonated drinks at the expense of more people choosing other beverages,” Calkins explains. “You’ve got to zig and zag with consumers and try to stay ahead of them and what they crave.”