Red Diamond

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Upsell Your Beverage Menu

Innovative offerings attract consumers and increase profits.

For centuries, coffee and tea have been a mainstay on American menus and there’s no sign that either is slowing in popularity. Instead, consumers’ unwavering demand for both of these beverages provides great evidence to the contrary.

“Coffee and tea are the highest profit margin items in a restaurant outside of alcohol,” says Emily Wood Bowron, assistant vice president of strategic marketing for Red Diamond Coffee and Tea. “Providing a variety of options is both profitable for operators and a significant draw for customers.”

To underscore that point, it’s not premium beef cuts or rare truffles, but rather, coffee and tea products that are the second most profitable menu offerings a restaurant can provide.

Among the reasons for their popularity is the versatility of both beverages, which can be served hot, cold, or frozen, with or without sweeteners or flavorings, and even incorporated into food (coffee bean-dusted cheesecake, anyone?).

“These products come from a wide variety of terroir, resulting in flavor profiles that appeal to different customers,” says Ina Pinkney, a Chicago-based chef and author of Memories and Recipes from the Breakfast Queen. “Different roasts and tea types possess specific qualities that consumers can latch onto in the same way they enjoy customizing menu items. That provides a lot of opportunity for operators.”

Despite their popularity, these sippables are still subject to the trends of the beverage economy, and it can therefore be challenging for operators to adapt coffee and tea products in a way that captures current trends. It is crucial, however, for restaurateurs and chefs to stay current on changing consumer patterns in order to provide the most appealing drink list. By differentiating a menu with coffee and tea products that go beyond the basics, operators can attract new customers and provide more upselling opportunities for wait staff, thereby increasing profitability.

“Iced coffee, for example, has a following of people who prefer the taste and convenience of that option,” says Kenneth Moore, chef and culinary instructor at Jefferson State Community College in Birmingham, Alabama. “Similarly, iced tea continues to be popular because it is a refreshing beverage that can be enjoyed with friends and family at social gatherings.”

Increasingly, consumers will drink iced coffees and teas year-round and at any daypart. It is therefore critical that restaurants provide these options on menus in order to maximize consumer appeal and increase sales. By identifying the various ways in which they can menu iced coffees and teas, operators will find more and more opportunities for differentiating their beverages, attracting and keeping new customers, and upselling menu items.

Cold Brew Is Heating Up

Although iced coffee—brewed hot and poured over ice—continues to be a mainstay on menus, cold brew coffees are the market darling of the moment and are a key differentiator on restaurant menus.

“There’s a kind of cachet in providing a specialty product,” Bowron says. “The time it takes to produce a fresh cold brew—12 or more hours—as well as the limited batch size, means that operators can reinforce the perception of it having a higher value. Cold brews are a great product for restaurants because they can be sold as a high-end specialty beverage, mixed into cocktails, or even incorporated into desserts.”

According to Datassential, cold brew menu penetration has grown more than 300 percent since 2014, and sales reached a whopping $38 million in 2017. The popularity of these products has only increased since then.

“Cold brews and iced coffees are becoming as much of an afternoon treat as they are a morning starter,” Bowron says. “There is a great opportunity for operators to take advantage of customers’ desire to blend dayparts.”

In addition, as consumer attitudes toward sodas continue to shift downward, many are finding cold brews to be a reliable replacement. For jolt-seekers, cold brews offer approximately 10 times more caffeine than the average cola and twice as much caffeine as an energy drink—with none of the questionable ingredients consumers have become wary of. Millennials have been a particular proponent of cold brew coffees, with 54 percent reporting regular cold brew consumption, according to a 2016 report from the National Coffee Association.

“The interest in healthy drinks has become more and more important to each generation,” Bowron says. “Cold brews can be seen as more of a healthy energy drink, and because the cold brewing process tends to create a naturally less acidic drink than regular coffee, that appeals to younger consumers as well.”

In addition to seeking healthier options, 92 percent of consumers who drink coffee say they do so primarily because they like the taste, according to a recent survey by Datassential. And they’re not limited to mornings. In fact, a majority of respondents also stated that they drink cold brews as a dessert or meal replacement, in addition to seeing it as a way to boost energy in the morning and throughout the day.

“Personally, I often drink cold brews during the day because it feels more energizing than a hot drink,” says Michael Ponzio, executive chef for Medinah Country Club in Chicago. “There is less of a social perception about drinking hot coffee in the afternoon, when most people are looking for a more refreshing beverage.”

It’s Time to Tea Off

Tea, in some form, appears on nearly 85 percent of restaurant menus, according to reports from Datassential. Served hot, cold, or even frozen, tea is considered among the most approachable beverages for consumers, and offers high profitability margins for operators.

“In particular, a premium black, iced tea is a must have on any menu,” Bowron says. “It’s an easy upsell from water as long as the quality is there.”

But beyond black teas there is a world of options, including green teas, many flavored with citrus, mint, berries, or tropical fruits. Served over ice, these products offer refreshing options for consumers year round and are a good complement to any meal.

“Tea is a very nostalgic and ‘good for you’ drink,” Ponzio says. “It stems from a rich history of elegant tea parties, and also recalls sitting on a rocking chair on a front porch. Furthermore, when people are looking to lose weight—or simply be healthier—they turn to iced tea for a zero or low-calorie substitute to soda.”

Studies have shown that drinking tea can positively affect people’s health—from aiding digestion and preventing cavities to boosting the immune system and improving heart health.

“The antioxidant qualities of tea are no longer just bandied about, but are now widely accepted,” Pinkney says. “Calling out these benefits is another way a restaurant can differentiate its menu from the competition—perhaps by offering a specific variety or signature blend, or by introducing a new quality brand or source.”

According to the NPD Group, flavored teas are particularly popular in the current market and account for a 20 percent share of restaurant servings. Consumers across demographics report a preference for flavored iced teas made with fresh ingredients (as opposed to syrups or artificial flavorings) such as peach, mango, or strawberry.

“Many people are looking for teas infused with natural flavors that are also beneficial to their health,” Ponzio says. “For example, a popular option among our customers is green tea infused with fresh ginger, lemon, and mint.”

At Moore 2 Catering in Birmingham, Moore incorporates tea into more than just his drink menus.

“Tea is as much a part of the menu as bread and butter baskets are,” Moore says. “We use it in recipes such as our sweet tea brined fried chicken, increasing its use and value throughout the kitchen.”

Moore also encourages operators to use limited-time offers and promotions to help drive interest and attention to items. He says that creating customer awareness and curiosity through clear product descriptions is key to introducing value and interest.

The versatility of both coffee and tea beverages is a great driver for innovation. Many successful chefs are generating additional buzz by using these products in cocktails and other offerings.

Ultimately, however, coffee and tea beverages are a reliable menu item in any form because they provide customers with a familiar, flavorful, and enjoyable drink which many specifically want to consume outside their homes.

“Coffee and tea—whether hot or iced—are a mainstay, consistently performing against water, soft drinks, and juices,” Pinkney says. “Fresh brewed flavors that have low sugar counts and provide some sort of caffeine fix will continue to make coffee and tea beverages a perennial winner.” ϖ