Industry News | May 7, 2012

From the Floor: Consumers Looking for Beverage Variety

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Innovation and choice have become the watchwords of the beverage business.

Whether the drinks are alcoholic or not, modern consumers, particularly younger ones, are seeking more variety in what they can select at their local restaurants. This is what helps create value that diners are seeking when they eat out.

"Too often, value to a restaurant operator or bar operator comes down to cost, but that is only one factor," says David Henkes, a vice president of Chicago-based consulting and market research firm Technomic Inc. Instead, the question is, "What is the added value?"

Henkes moderated a panel of wine, beer, and spirits experts to help kick off the International Wine, Spirits and Beer Event that is coinciding with the annual National Restaurant Association Show in Chicago.

(Get live updates from the NRA Show with QSR's Twitter feed!)

New products and flavors are helping to build business for all types of restaurants–from full-service places to quick-service eateries–across the alcoholic beverage space.

"You're seeing new flavors and more line extensions," Henkes notes, because regardless of which beverage is being sold, it is the highest profit center in the restaurant.

That includes non-alcoholic beverages, as can be seen with the growth of various teas, juices and even carbonated beverages.

"The focus begins and ends with the consumer," says Chris Lowe, president of Foodservice & On-Premise for Coca Cola, based in Atlanta. At the end of the day, it's up to a restaurant operator to provide a "great meal experience with a great beverage."

The 120-plus options available from Coke's Freestyle beverage dispenser are providing the variety that consumers are seeking, and the result is increased sales for restaurants at quick-service, fast-casual, and full-service restaurants, the company reports.

During a news conference yesterday, Coca-Cola reported that in-market results from 2010 indicate an increase in beverage servings, total transactions and total sales in restaurants that have either the Freestyle self-serve or crew-serve machines.

However, carbonated beverages' sales volume and market share continued to decline in 2011, despite the Freestyle's expansion, according to the Beverage Marketing Corp.

Henkes says consumer spending on alcoholic beverage grew last year and will increase even faster this year. Technomic estimates beer sales will rise 2.2 percent, wine 3.5 percent, and spirits 2.3 percent.

This growth is being fueled by additional and interesting wine varietals, craft and regional beers, and new cocktails made with all kinds of spirits.

New product development has been one of the keys to the wine industry's growth, says Ben Salisbury, vice president of strategic accounts for Constellation Brands U.S., which is the world's largest premium wine company.

"Sweet wines, Prosecco, (and) Malbec" have helped fuel the growth, he says. With the interest in new products, particularly by Millenials and women, the industry has decided "to make hay while the sun shines."

New products are also key to the beer industry, explains Tom Burkemper, senior director of category management/trade marketing for brewing giant Anheuser-Busch In Bev.

"The beer consumer is extremely diverse," he says. In taste preferences, most people like traditional beer flavors, but younger drinkers are shifting toward sweet and bitter beers. "So craft beer, which is more diverse, has gained in popularity," he says.

One of the innovations that restaurants can embrace in the alcoholic beverage arena is the creation of single-serve wine products. One company, Copa Di Vino, of The Dalles, Oregon, has developed a ready-to-drink glass of premium wine in several varieties.

The single-serving plastic cups of wine, sealed with peel-off foil openings, captured one of this year's Food and Beverage Product Innovation Awards presented by the restaurant association. The wine cups have a shelf life of 18 months.

Just as beer and wine are focusing on freshness, choice, and premium quality, so, too, are many tea companies. More than 40 of these businesses have booths are the NRA Show.

Teatulia's teas appeals to people who are looking for a premium product with an environmentally conscious bent. The organic tea comes from a single garden in Bangladesh and all the display items and container are eco-friendly.

Best of all, the tea has a taste that is "full bodied with a finish that is not bitter," says Linda Appel Lipsius, cofounder and chief executive of the Denver-based company. That appeals to the same younger consumers that every company is seeking.

By Barney Wolf

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.