In foodservice, there has been much focus on beverage offerings in recent years, which has resulted in a proliferation of innovative concoctions, unique flavor profiles, and a focus on healthful and functional ingredients.
“Beverages are no longer a second thought,” says Jay Bandy, president of Atlanta-based Goliath Consulting Group. “Operators want to capture sales, and options have blown up. It’s important to focus on menu development, which can help set a restaurant apart.”
In terms of flavor trends, Bandy says salted caramel is on the upswing, in addition to tropical fruits like mango. “Tropical fruit flavors are gaining traction, along with nostalgic, exotic, and fusion with tea and tea blends,” he says. “Fruit juices are continuing to evolve and will be a growing segment as people look for lighter beverages. We’re also seeing demand for frozen concoctions, not just in full-service but also QSRs. Growth in organic frozen beverages will continue.”
One sign of the times is the continued blurring between retail and foodservice occasions. “Consumers are purchasing items from restaurants and mixing these with things picked up from the grocery store, which will form different habits,” says Rob Wilson, managing director, partner at L.E.K. Consulting, Chicago. “This includes grab-and-go beverages, so having refrigeration equipment at the point of sale is critical.”
Wilson adds that with ready-to-drink lines, operators need to think about whether they want to invest in equipment to produce these products themselves or rely on a partner that specializes in prepackaged product for grab-and-go sales. In addition, as foodservice seeks to remove as much labor as possible from the kitchen, the need to automate has never been greater.
“With beverages being a significant part of most operations, there are ways to utilize pre-blended mixes or take labor out of the equation by leveraging innovative beverage equipment,” Wilson says. “This will be what operators will gravitate toward moving forward.”
For nonalcoholic drinks, global flavors and varieties are leading growth across several beverage categories. Drinks from Asia (matcha, kombucha, boba, milk tea) and South Asia (chai) are growing the most on foodservice menus, according to Chicago-based market research firm Datassential. Aguas frescas from Mexico and affogato from Italy are also gaining popularity.
Because hot coffee is a mature, habitual category, growth is likely to come from specialty coffee or cold brew coffee, which has more than tripled its menu penetration in the past four years, Datassential reports. Traditional flavors like chocolate and vanilla are the best way to appeal to specialty coffee drinkers. Consumers drink specialty coffee as a treat rather than for health, so they prefer dessert-centric flavors over fruit and floral flavors.
“We’ve seen a shift away from traditional soda in restaurants as people are seeking beverages they don’t have at home,” Bandy says. “Our clients are selling a lot more milkshakes, and we’re seeing bubbler programs pick up as well as nitro coffee.”
Grinding coffee beans in-house is the most appealing prep method as consumers want their grounds as fresh as possible when ordering brewed coffee, reports Datassential. Consumers find instant powders, liquid concentrates and single-cup brewers less appealing when frequenting coffee venues as they practice many of these methods at home. As it relates to equipment, a direct pour from the coffee pot is strongly preferred over push-button/vending machines or dispensers. Similar to beans ground in-house, coffee directly from the pot signifies a level of freshness that machines struggle to convey.
Within the coffee foodservice category, Wilson says there are a few different types that operators should be thinking about. “Along with further ideations in liquid or concentrate form, one area we see a lot of growth in is cold brew concentrate, and we expect that trend to continue,” he says. “Cold brew concentrate can be dispensed from a variety of different types of equipment.”
In upscale establishments, this may take the form of a traditional beer tap with different cold brew flavors and roasts. “The other thing I’ve started to see are cold brew dispensers, primarily in coffeeshops and restaurants, pre COVID and similar to micro markets,” says Wilson. “The way it works is the dispensers are filled with cold brewed extract or extract concentrate. What’s interesting about the equipment is there are different dispensing systems that can be used. It’s similar to ordering beer at the bar, but you’re getting caffeine instead of alcohol. That will be the area we’ll see a lot of activity in this year.”
Within the tea segment, Wilson notes the decline of powdered extract, with liquid extract and in-house and batch kettle-brewed tea on the rise.
The fastest-growing nonalcoholic beverages ranked by four-year penetration growth include kombucha, matcha latte, cold brew, matcha, watermelon juice, peach lemonade, almond milk and coconut water.
Bandy also notes a trend toward sugar cane-sweetened and organic sodas. “I think people still want carbonated beverages but are choosing those that are better for them,” he says.
The prediction is that 2021 will be a good year for alcoholic beverages, according to Datassential. While at-home beer, wine and cocktail consumption allowed many consumers a chance to relax during a stressful year in 2020, many consumers associate this category with eating out and socializing.
In the last year, 48% of restaurants surveyed by Datassential take-home cocktail kits as a creative way to generate another revenue stream during the pandemic, with 63% of survey respondents ordering alcoholic beverages for pickup or delivery for the first time.
“Restaurants are providing entire cocktail kits by bundling all the ingredients and delivering to customers,” says Bandy. “This includes old-fashioneds and Bloody Marys, in addition to traditional beer and wine.”
Trends will also bounce back. While the beginning of 2020 was focused on comforting, nostalgic favorites, consumers are ready for the types of bold, innovative, craveable ideas that they can only get from foodservice again in 2021. Expect to see options like large-format drinks, drink flights, over-the-top cocktails and other beverage options that consumers are unlikely to make at home resonate with consumers in the year ahead, according to Datassential. Some of the fastest-growing options across alcoholic beverage categories, such as rose wine, sour beers and hard seltzer, will continue to spike.
Consumers will be torn between health and celebration/indulgence. On one hand, consumers can’t wait to go out and celebrate with their favorite alcoholic beverages again, but on the other hand, they may not have been eating very healthy in 2020 and still have a global health crisis on the mind. Options that give them the best of both worlds, like drinks that incorporate healthy ingredients or functional benefits, will give them the permission they are looking for to indulge, according to Datassential.
The Chicago research firm reports that a new tech boom will impact alcohol. Investments in next-generation foodservice technology will impact the industry in the future, particularly technologies that allow consumers to purchase alcoholic beverages on their own terms: the flavors and options they want, when they want them. For example, consumer interest is high for alcohol vending machines, rapid-aging technologies, smart cocktail systems and AI-powered cocktails.
Hard everything will be the theme for 2021. Hard seltzer was the fastest-growing trend on menus overall last year, according to Datassential, which means operators will have to look for new ways to keep the category interesting and innovative. A number of operators are looking for ways to offer their own hard seltzer or allow customers the option to add their own flavors. Look for more manufacturers and operators to offer other hard versions of already-trending beverages, like tea and kombucha.
Bandy predicts the continued growth of nonalcoholic cocktails as well. “These are no longer referred to as mocktails and include low-alcohol cocktails with innovations on the mixer and ingredient side,” he says.