As commodity prices rise and competition in all segments of the foodservice industry grows fiercer, operators are looking for ways to increase their profit margins, and one way to do that is by making more money selling drinks.
High-margin beverages account for much of the profit at many restaurants, but they could be marketed better, according to a recent study, which found that “old” and “boring” were common adjectives used to describe drink promotions.
To help operators better strategize their upselling techniques, Nation’s Restaurant News commissioned Next Level Company to conduct a survey to determine how consumers perceive existing nonalcoholic beverage programs.
The survey, which included more than 2,700 consumers ages 12 to 54, was conducted online last March.
It found that consumers said they were by-and-large satisfied with how casual-dining restaurants promoted their nonalcoholic beverages, with 63 percent saying that segment did a good to excellent job. Only 50 percent said that of quick-service restaurants.
But when asked to describe the beverage programs at casual-dining restaurants, 28 percent said they were “creative,” and 23 percent said they were “modern,” but another 25 percent said they were “old,” and another 23 percent said they were “boring.”
The most common responses when describing quick-service drink programs were “old,” “boring” and “tired,” at 43 percent, 35 percent and 30 percent, respectively.
To improve beverage programs at quick-service restaurants, 46 percent of respondents recommended offering a wider variety of drinks, and 42 percent suggested having “signature” items not available elsewhere. The third-most suggested change, at 41 percent, was offering healthier drink options.
For casual dining, including drinks as a package with the meal was the most common recommendation, at 43 percent. At 42 percent and 40 percent, respectively, were offering daily drink specials and having signature drinks.
When it comes to deciding what to drink, 68 percent said what they chose to eat was either very important or extremely important. Sixty-seven percent said the same of unlimited refills, and 61 percent said the menu or type of food was very or extremely important. The same percentage said the size of a drink was the decision factor, and 58 percent said they based their choices on price.
Survey participants indicated that there is room to market beverages to them before they order. Only 22 percent said they know what they’re going to order before walking into a quick-service restaurant, while 40 percent decide when they see the drink menu or drive-thru menu board, and 30 percent decide once they know what they’re going to eat.
Most respondents, 80 percent, said they would not pay more than $2 for drinks in quick-service restaurants, with the average maximum price being $1.70.
Even fewer diners at casual-dining restaurants, 13 percent, know what nonalcoholic drink they’ll order before they walk in the door. Some 39 percent decide after looking at the drink menu, and 37 percent say they decide once they know what they’re going to eat. They said they will pay more for drinks at restaurants with table service, with 34 percent expressing willingness to spend more than $3. Still, 20 percent said they wouldn’t pay more than $2. The average maximum was $2.44.
A third of consumers said the brand of the beverages they drank was very or extremely important.
More than half of respondents said they will order more than one drink during a meal at a casual-dining restaurant, but 89 percent said it would likely be the same as the first because they don’t change beverages in the middle of the meal. Forty percent said they never switch drinks, while 49 percent said they didn’t change drinks very often. Just 2 percent said they changed drinks frequently.
Those who do change what they drink are mostly likely, at 60 percent, to change because they did not like their first drink. Nineteen percent change drinks based on food selection.
Sixty percent of respondents said they were somewhat or extremely likely to try a drink they had never had before, with 11 percent saying they were extremely likely to try new things.
Additionally, more than half of consumers change their “favorite” nonalcoholic beverage within a 12-month period.
Survey participants were asked to choose their three favorite drink flavors from the following choices: banana, cherry, black cherry, chocolate, vanilla orange, peach, pineapple, raspberry and strawberry.
Strawberry, banana and raspberry were the most popular choices, with strawberry making it onto 37 percent of respondents’ lists. Banana, at 21 percent, came in second.
When it comes to getting customers to try new drinks, coupons, new flavors, and unlimited refills were favorite choices.