Person shopping for beverages at a grocery store

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By: Mike Lojkutz, Director of Innovation

As you are walking through the grocery store, does it ever feel like there is more space dedicated to beverages than ever before? And more and more, does it seem like they are brands outside of the traditional big companies you are used to seeing? You’re not mistaken. Retail beverage sales are growing at an impressive pace with plant-based, non-coffee refreshments and energy drinks taking market share from the more traditional categories, while soft drink sales continue to, well… soften*.

In this article, you will find:

  • How consumer preference in beverages is shifting toward ‘better for you’ solutions
  • Why operators and retailers are realigning their beverage programs and offerings

  • How to satisfy the beverage demands of Millennials and Gen Z to increase sales

With all of this change occurring in the beverage aisle, you have to ask yourself, “what’s driving consumers to either purchase or not purchase a beverage from you?” and “what type of beverages are they looking for?” If your consumers are Millennials and Gen Z, it’s likely not the classic fountain beverages of the past. These younger groups wield tremendous purchasing power and are increasingly opting for real ingredients, “freshness” and lower sugar options with unique flavors.

In the on-premises foodservice space, most segments are lagging behind and failing to capitalize on this ‘better for you’ trend. A majority are still offering carbonated soft drinks, and perhaps lemonade and tea, but largely have held off on adopting new beverage offerings that consumers are clearly ready for and are already driving big sales growth in grocery and convenience stores. According to Euromonitor, the US functional beverage market of over $48 billion is expected to grow 6.6% through 2025. Shouldn’t foodservice operators enjoy a piece of that pie?

Look up and down the menus of emerging fast casual and coffee operators where these younger demographic groups spend the majority of their foodservice dollars. You’re beginning to see additional no- or low-caffeine cold refreshment options with more complex flavors than the traditional one-note offering — as well as no or low-sugar options. And more and more, you’re seeing functional attributes that aid in immunity support, gut health, hydration, energy, and mood boosts in today’s most popular beverages.

The transition to digital ordering has also played a big role in the rise in popularity of ‘better for you’ beverages. As greater numbers of consumers visit operator websites and apps to place their orders more conveniently, they are able to more thoughtfully explore the operator’s menu and beverage offering. And, just as more consumers are “reading the labels” at their local grocery stores, they are doing the same online, which is to say, they are a click and scroll away from seeing the nutrition facts panels and ingredient statements. Descriptions that incorporate words like “fresh”, “real” and “natural” carry more weight than ever and it’s no wonder that menu offerings across both food and beverage that convey these attributes are winning in sales.

This begs a few questions that many operators are asking themselves:

“Is our beverage program aligned with demand and delivering on meeting consumers where they are or where they want to be in the future?”

“Is our current beverage offering out of date and out of touch with the consumer and the reason our beverage sales are so sluggish?”

“What beverage program options are out there that align with current demand and help support us in growing our beverage sales?”

At Leahy-IFP, we understand that in many cases, there is a gap in foodservice that creates an unmet need state for many consumers, especially among Millennials and Gen Z. These eager and influential purchasers are being left without a beverage option that meets their desired purchase intent — and leaving operators without a sale. That’s why we reimagined how good beverages can be and created All Friends Beverage Infusions. We are here to help you grow a beverage program that compliments the food that you’ve worked so hard to differentiate from your competition while increasing brand integrity and alignment with current and future demand. We help you capture those dollars that would not have been spent with you and bring new life to an important part of your offering — your beverage program.

All Friends Beverage Infusions are the cold refreshment option operators can count on for delicious, high quality, and all-natural beverages with exciting flavors that support immunity, boost natural energy, and increase hydration. Made with real fruit juice, way less sugar than your typical soft drink, no artificial ingredients or preservatives, and packed in plant-based packaging, we’re supporting a more delicious option for the balanced lifestyle consumers are aspiring to lead. And because of their operational efficiency, All Friends offers both ease of use and flexible LTO opportunities.

It’s time to make sure your beverage program is delivering what consumers really want. Discover how All Friends Beverage Infusions can fortify your beverage program, help drive profits and give today’s consumer the ‘better for you’ beverage they crave.

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