Beverages remain a rich target for engineering higher sales and margins, but discerning between drink trends and fads complicates that development more than ever.
That was the conclusion drawn by executives who gathered at the 2014 Beverage Innovations Roundtable during the National Restaurant Association Restaurant, Hotel-Motel Show in Chicago.
Penton Restaurant Group — which publishes Food Management, Restaurant Hospitality and Nation’s Restaurant News — in cooperation with Smucker’s Foodservice, convened menu innovation leaders from some of the most forward-thinking companies in the restaurant, hotel and campus dining segments to share best practices for gaining insight into what consumers want from their drinks and for turning that feedback into sales-driven beverage strategies.
Below are highlights from their roundtable discussion, moderated by Nation’s Restaurant News senior editor Mark Brandau.
• Darci Forrest, senior director of menu innovation, McDonald’s Corp.
• Stan Frankenthaler, senior vice president of food and beverage innovation and menu development, CraftWorks Restaurants & Breweries Inc.
• Donna Josephson, chief marketing officer, McAlister’s Corp.
• Tim Knowlton, director of foodservice research and development, Smucker’s Foodservice
• Rob Morasco, senior director of offer development, Sodexo Education USA
• Ken Toong, executive director of auxiliary services, University of Massachusetts
• Greg West, vice president of product innovation, Bob Evans Restaurants
• Shirley Whelan, director of restaurants and bars, Hilton Worldwide
Mark Brandau, Nation’s Restaurant News: How are your beverage lines an opportunity not only to drive sales, but also to extend your branding?
Donna Josephson, McAlister’s Corp.: We use McAlister’s Famous Sweet Tea as an embodiment of what the brand stands for: generous tea hand-crafted with quality, and then that generous portion is always free refills. That will always be some place where we maintain the brand, and elsewhere we’re going to borrow equity.
Shirley Whelan, Hilton Worldwide
On demand for premium beverages:
“We’ve seen a great increase in what people are willing to spend on a quality glass of wine from a restaurant standpoint. People really will push that $20 mark to get what they want by the glass. We’ve had great success with our seasonal cocktail programs, and the training was certainly the hardest part of that. There is no fail-stop between a bartender and the guest. We’re spending as much care and time to make a nonalcoholic beverage as we do for a cocktail, and that translates well to catering and events.”
Stan Frankenthaler, CraftWorks Restaurants & Breweries: I don’t think that you can own every one of your beverage platforms necessarily; you certainly need the help of some good partners who have their own dominance in the space too. It’s really important to determine which one of those key platforms you do really want to own within your category and which ones your might need to sort of participate in. In the ones you want to own, it goes beyond marketing and really is the tie that binds the customer.
Darci Forrest, McDonald’s Corp.: McCafé started with a credibility opportunity for us, so we invested in really changing our coffee in 2006 in premium roast under McCafé, and then it grew from there into espresso. That was a brand we chose to create, a sub-brand if you will, rather than partnering. We wanted to expand that portfolio into other areas.
Brandau, NRN: Are sales of specialty teas and coffees starting to overtake sales of your standard drinks?
Rob Morasco, Sodexo: The sales in campus facilities that have a Starbucks or Argo Tea — the swing to specialty or the “six-sentence order” is definitely taking over. We’ve got our own coffee and tea concepts that are doing pretty well. Even in that space, though, you have to leverage what you’re good at … and where we’re not the experts, we go to someone who is and say, “OK, how do we do this?”
Tim Knowlton, Smucker’s Foodservice: For us, it becomes a shift from providing a finished product versus something more ingredient-based. As we start to get more into the specialty side, it becomes difficult to do because the critical mass and volume just aren’t there, even for you, to have a finished product. So we ask how can we change and understand what ingredients are the critical base ingredients that you’re going to use, and that’s what we start to manufacture.