Innovation is key to success in the restaurant industry—and it usually requires deep pockets. Industry leaders such as McDonald’s and PepsiCo are spending hundreds of millions of dollars on drink-centric concepts and beverage research. As quick-service and fast-casual giants introduce new boba teas, cold brew options, flavored lemonades and fruit-infused smoothies, industry analysts say restaurants are racing to capture market share in this fast-growing segment of the industry.  

Consumers are realizing the power of their preferences. As large chains respond to their desire for exciting drink options, small chains are faced with a need to keep pace. Take for instance the continuously growing boba craze. The market is expected to reach $3.6 billion by 2028. According to a 2021 CLSA consumer survey, 94 percent of individuals ages between 20 and 29 had bought boba tea in the preceding 3 months.  The issue for smaller restaurants and foodservice operations, however, is that executing a boba menu in their stores adds complexity and cost—let alone research and development budgets they don’t have. 

In essence, smaller businesses often lack the financial means and workforce necessary to establish their own specialty drink programs. Innovation comes at a cost, and for these enterprises, it can be prohibitively expensive. However, to bridge this gap and create a more equitable landscape, cutting-edge technology, equipment, and data-driven insights are now available with companies like Botrista. They have enabled restaurants with limited innovation budgets to swiftly implement their own offerings. Notably, brands such as Yoshinoya and Pokeworks have embraced this opportunity by investing in the right resources. As a result, they can now compete with industry giants, offering beverage solutions that rival in quality, diversity and efficiency.

Beverage innovation transcends a mere one-time menu update—it’s an ongoing journey. Data has become integral to the success of that journey. Restaurant owners and operators need data to make informed decisions when it comes to their beverage offerings. Data-driven insights can be game changing, for example prompt operators to extend their open hours to encompass new dayparts, thereby ensuring they remain competitive and responsive to evolving guest preferences. This proactive approach not only empowers small businesses to make informed decisions but also enables them to take decisive actions to stay ahead in the market.

Access to beverage innovation tools enable small and mid-sized chains to not only survive, but also flourish amidst beverage and food industry giants. Automated beverage solutions with data-centric beverage programs have resulted in significant growth in average check size, up to 59 percent surge in drink sales and notable traffic increases at mid-sized chains.

These types of successes are no easy feat in light of what beverage and food industry leaders are doing in the space. In 2022 alone, PepsiCo spent $771 million on beverage research, development and implementation. McDonald’s is spending big to open up 10 CosMc’s this year, a new small-format restaurant that offers beverages and treats. Starbucks invested “billions” of dollars in its Triple Shot Reinvention strategy, announced in late 2023. The strategy includes “further product innovation” in its core menu.  

The development of a beverage, from formulation to manufacturing and packing, can cost at least $300,000, according to beverage formulation and manufacturing company MetaBrand. As taste buds become more sophisticated and discerning, companies are investing in the end result.

Even more fast-dining key players like Jack in the BoxTaco Bell7 BrewDutch BrosWendy’s and Domino’s Pizza have been experimenting with boba teas, vibrant energy drinks and flavored lemonades. This shift highlights the evolving landscape of consumer preferences and trends.

Comprehensive beverage solutions are indeed leveling the playing field for businesses of all sizes. By expanding options, customizations, and providing access to real-time data, these solutions empower owners of smaller establishments to elevate guest experiences and cultivate loyalty, ultimately enhancing profitability. For instance, leveraging advanced technology, such as automated beverage stations integrated with data-driven programs, enables even modest-sized restaurants to efficiently cater to evolving consumer preferences. By utilizing just a few square feet of space, these establishments can not only boost revenue, but also gain valuable insights to drive informed decision-making. Now is the time for businesses to seize the moment, embrace the beverage innovation trend, and position themselves for long-term success in the competitive market.

Jason Valentine, Chief Strategy Officer for Botrista, brings almost 30 years of restaurant industry experience to the table — including executive positions as franchisee and franchisor. Valentine also served as President & COO of Zoup Eatery. He has been featured on Restaurant Business News’ Power 20 list and is a regular speaker at industry leading conferences, such as the Restaurant Leadership Conference, Fast Casual Executive Summit and more.

Beverage, Outside Insights, Story