Menu Innovations | December 2014 | By Barney Wolf

Putting Some Pop in Soda

Operators play with technology, craft procedures to make stand-out soda.
Quick service brands innovate soda beverage menus to differentiate product mix.
Though soda sales have fallen flat, operators are diversifying their carbonated beverages as another point of differentiation. Torani

Soda sales aren’t exactly bubbling at restaurants these days. In fact, they’ve been declining for years. Despite that, there’s fizz remaining in carbonated beverages as operators look toward craft sodas, new technology, homemade beverages, and creative concoctions to put effervescence into their sparkling libations.

“We’re seeing a lot of craft soda products available in the market, although it’s still very small,” says Joe Pawlak, beverage expert and senior vice president at Chicago market research firm Technomic Inc.

Coca-Cola’s Freestyle and PepsiCo’s Spire machines, featuring dozens of beverage options, have given operators a creative way to let consumers customize their drinks, Pawlak adds, while Starbucks’ technology allows customers to choose their levels of carbonation. Operators using these new devices or offering more expensive but unique craft sodas have generally seen their beverage sales rise or remain even, he says.

Carbonated beverages make up America’s largest liquid refreshment segment, but these drinks’ total volume has contracted for nine consecutive years, according to New York–based Beverage Marketing Corp. The performance in carbonated beverages at limited-service restaurants echoes that, research from The NPD Group shows; volume slid 3 percent from September 2013 to August 2014.

There are a variety of explanations for this, says Bonnie Riggs, NPD’s restaurant analyst. “If you want to start at the industry level, one reason carbonated soft drinks are down is that [restaurants] are taking them out of kids’ meals and offering milk and other healthier options,” she says, adding that many parents won’t let their youngsters have sodas.

Health concerns over obesity and diabetes have led adults to cut back, as well, with combo meal sales dropping. And diners increasingly fail to see any price value for high-margin carbonated soft drinks, Riggs adds, especially as the price of soda has risen.

“We did a study and asked consumers why they were cutting back on sodas, and they said price was a big issue. They did not see the value,” she says. “We don’t give consumers enough credit for understanding profit margins and seeing value in what they’re buying.”

Finally, carbonated beverages are facing increased competition from other beverages, like specialty coffees, flavored iced teas, juices, bottled water, and sports drinks.

The only limited-service restaurant segment seeing increased soda growth is fast casual. Much of that is driven by the increase in the number of stores, Riggs says, although she adds that fast casuals tend to feature more diverse soda brands.

Consumers expect more from their beverages, just as they have demanded better food items from quick-service restaurant operators, says Bill Creelman, founder of Spindrift, a Boston-based craft soda maker using natural flavors and fresh ingredients. “The challenge is to get people excited about soda,” he says. “Operators have had an amazing experience on the food side, with all these great ingredients and new creations, but the beverage side at many restaurants is no different than it was 40 years ago.”

There’s been growing interest in giving some flashy pop to soda. Coca-Cola’s Freestyle launched in 2009, while Pepsi’s Spire debuted this year. Both are touch-screen soda fountains that have the capacity to pour more than 100 different beverages and flavors, allowing consumers to be their own mixologists.

Firehouse Subs was the first big operator to adopt Freestyle chain-wide. Its volumes jumped by a double-digit percentage after Freestyle was added in 2012, and the numbers have remained high. “Because of the very wide selection of carbonated and non-carbonated beverages, plus the number of diet and caffeine-free ones, we are able to meet just about everyone’s needs,” says CEO Don Fox.

The biggest increase has been in non-carbonated drinks because most are new to Firehouse Subs. But traditional soda sales are up as well, Fox adds. “One indicator was that dine-in traffic increased” 4 percentage points, bucking the trend toward takeout, he says. “When dad is asked to get subs and three or four different drinks, he’ll say, ‘Let’s just all jump in the car. I don’t want to carry all those drinks.’”

Just as importantly, the technology gives restaurants the chance to create their own beverages that they can offer alongside well-known brands. For instance, Firehouse Subs features its own custom-blended non-carbonated cherry limeade, which is second in sales to Coke. Similarly, Moe’s Southwest Grill partnered with Coca-Cola to create Vanilla at Peachtree. The Sprite or Sprite Zero–based soda has vanilla and peach flavors.

Other concepts are creating their own drinks with soda. For instance, Taco Bell developed a frozen beverage line, which included the Dr Pepper Vanilla Float Freeze, and also rolled out the Baja Blast, which was made with PepsiCo’s Mountain Dew and lime flavoring.

Some coffee and tea companies have taken this a step further and are selling only carbonated beverages made by hand in-house. Caribou Coffee is one of them. Several years ago, brand executives saw the decline in soda sales and decided to do something to change the entire carbonated beverage experience.

“It wasn’t the carbonation part bringing down sales; it was the health halo,” says company chef Mark Miller. “It was how much sugar was in these drinks that caused people to back away from them. And they were bored with the mainstream same-old, same-old things.”

He thought it would be interesting to carbonate teas and real fruit juices to give consumers an option that would match up with the company’s lunch menu. The result was the chef’s “favorite project” at Caribou, he says. During the research and development phase, two tea items rose to the top: Green Tea Lemonade, which is a version of an Arnold Palmer, and Peach Black Tea. The brand also developed Lemon Ginger Pomegranate. Following market tests, the drinks launched in spring 2012, with reduced-sugar versions added a year later.

Starbucks launched the industry’s biggest in-house soda program this year. Its Fizzio Handcrafted Sodas—created after customers said they were looking for more cold beverage options—are available in some 3,000 stores in 16 mostly South and Southwest states.

Key to the line is the Fizzio carbonation machine, which was built “from the ground up, [with Starbucks] developing the concept in-house and enlisting some of the top carbonation experts in the industry to help develop the carbonation components,” says Fizzio brand manager Joshua Fine.



As this article acknowledges, our member companies continue to broaden theirportfolios to include a wide variety of product choices, portion sizes and calorie counts to meet the individual needs of consumers. These choices include new soft drink options, as well as water, ready-to-drink teas and coffees, sports drinks, 100% juice and more. The bottom line here is, all calories count, and beverages can be integrated into a healthy, active life, to whichhydration is key. - American Beverage Association

If you are looking for great fountain variety in the New York / New Jersey area, please reach out to Sea Breeze or call us at 800-SEA-BREEZE (732-2733)

So where can we buy a gallon of the same exact cherry lime aid they sale at firehouse subs???????
been real tuff to find at the grocery stores...


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