Part One: Tapping into Healthy, Functional Beverage Trends to Build Foodservice Drink Business

By Rick Zambrano, Foodable Industry Expert

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Beverages are great vehicles for food businesses to build incremental business. From fresh juices, HPP juices and smoothies, to bottled functional drinks– beverages are a smart investment by foodservice businesses. Knowing what to sell and how it fits in with a brand is a top priority for restaurateurs in all segments.

Restaurateurs are tapping the latest beverage trends to grow their business, but it’s a delicate balance. A way to easily use the latest and most-pervasive trends is to categorize them through functionality. In this manner, restaurateurs are keeping both the trend and the consumer’s needs top-of-mind.

So what are these trends and what is driving them? Well, there’s a growing cadre of consumers who are looking for healthier food and drinks, and they have been defining it in their own ways. Many restaurant operators who were looking for evidence of this in their sales of lower-calorie meals & drinks were surprised to see consumers flock to “better-for-you” ingredients, instead, and wellness foods. Equipped with a lot of readily-available research and articles, Millennials, Generation X and Baby Boomers are attracted to ingredients that will contribute to a healthier lifestyle.

43% of consumers often use health claims on labels to help them make purchasing decisions, according to the 2014 Food & Health Survey by the International Food Information and Council (IFIC) Foundation. Restaurateurs and foodservice operators can use health and functional claims that have basis in nutrition or science to help market their drinks. We’ll focus here on functional drinks and beverages positioned as integral to a healthy lifestyle.

Wellness

Baby Boomers in particular, are looking for food and drink that can help with the aging process, fight off disease and mitigate illnesses that may have already been diagnosed. Since they are already more likely to be more affluent (median income of baby boomers ages 50-54 and ages 55-64 outpaces income for those in the 25-34 years of age Millennial sub-segment by 22% and 10%, respectively, according to 2010 U.S. Census Bureau data.) These types of drinks would include functional drinks, including beverages that contain probiotic, protein-rich and antioxidant ingredients.

Restaurateurs can carry probiotic drinks, including products made through fermentation, such as yogurt smoothies, kefir and kombucha, a drink made with tea, sugar, bacteria and yeast. Yogurt and kefir data from the Specialty Food Association shows a near-20% increase in sales in the category to $2 billion in 2013, according to Packaged Facts.  

Kombucha is approaching mainstream with several small-batch and mass market producers bottling it for to-go convenience. Additionally, kombucha kits are sold to prepare it at home by companies like Kombucha Brooklyn. Whole Foods offers kombucha in its stores and also in its coffee stands inside the store. The appeal of fermented, probiotic drinks are such that kombucha remains popular, despite some of the risks of home preparation and some reported adverse effects. For this reason, foodservice operators should weigh the benefits against the health risks before undertaking production of kombucha, or any fermented product, for that matter. Kombucha, which requires a precise sterile environment, bottled products are most likely to be the best strategy in a fast-paced, time-strained environment.

Restaurateurs can offer yogurt blends, smoothies, kefir drinks and kombucha in restaurants. Giving consumers choice, particularly older consumers that may have more disposable income, is a smart play. Fast casual restaurants or cafes should assess whether these types of drinks in to-go format fit the brand and align well with the menu. In most cases, this will be the case and probiotic drinks can add to incremental business. Boomers are a focus with this trend, but Gen X and Millennials are also making it their own.

Drinks with ‘Strength’

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Functional drinks that address strength, endurance and recovery are heavily marketed. Protein-rich drinks are particularly attractive since they appeal to those who strength train and consumers who are seeking protein for dietary reasons. According to the IFIC, of consumers surveyed, 60% strongly agree and 31% somewhat agree that it is important to get enough protein in the diet. Protein is a broad-stroke functional component that appeals to a wide variety of consumers, not just weight trainers or those who are concerned about muscle loss.

Ready-to-drink beverages, like Muscle Milk, have done exceptionally well in the last few years, but with the current protein craze and popularity of protein-centric diets like Atkins and Paleo, protein drinks are big business in the food industry. Recently, Monster Beverage, of which Coca-Cola owns nearly 17%, saw Muscle Monster Energy Shake become the No. 2 RTD protein drink in the protein supplement segment of the retail convenience and gas channel, according to an article in Beverage World. It combines the energy blend of Monster with 25 grams of protein.

How can restaurateurs use the protein trend to boost sales? Fast-casual operators can offer more protein-rich drinks in to-go formats in their refrigerated cases and offer protein-boosts to their in-house smoothies and fresh juices. Milk and protein-enriched alternative milks in to-go formats can also satisfy consumers who are protein-hungry. As an example, Smoothie King offers a variety of protein-rich smoothies that appeal to the active lifestyle.

Sit-down restaurants can bank on the smoothie trend to offer nutritious drinks that are boosted with protein. Whether bottled or blended in-house, these types of drinks can hit the spot with consumers that are looking for a non-alcoholic boost to their day.

Relax with tea

There are many functional drinks that claim they can help relax a consumer or induce sleep. Consumers are wary of these types of claims; however, tea is fast-growing and well-received market by consumers who consider it a natural part of de-stressing during the day, despite the caffeine content in non-caffeinated varieties. Coffee is still king as a daily beverage in the U.S., but tea is growing; in fact, tea sales were projected to reach $25 billion in 2014, according to a report on the tea market by boutique research firm Packaged Facts. And 75% of those sales are in foodservice establishments, notes the report.

Green tea can’t get any hotter than it is now, but new blends will also start gaining appeal. Matcha green tea has been around for a while, but recently has seen its popularity reach new heights. Flavor-infused teas and green teas are definitely a trend according to Packaged Facts. The report says that green tea in foodservice menus has increased 35% in four years through 2013 and notes, “green tea has established its reputation as a superfood and consumers have come to associate green tea consumption with health benefits ranging from anti-aging agent to weight-loss beverage to anti-cancer elixir.”

From a relaxation standpoint, tea is well-positioned in the mind of the consumer to fit the bill. Green tea’s sought-after wellness properties make the variety a number two favorite. Black tea is the top choice according to 40% of consumers surveyed by Packaged Facts. Restaurateurs are using this trend to their advantage with their house-made beverages and also bottled teas when they have grab-and-go and take-out-formats. The flexibility of tea and its compatibility with citrus, makes it ideal for flavor innovation. Panera bread offers Tropical Hibiscus Tea and Green Tea on ice standard fare.

In Part II, we’ll look at “free-from” trend as it applies to drinks and explore drinks marketed for their anti-oxidant properties.