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Euromonitor International recently presented at the Fast Casual Executive Summit in Miami, addressing the continuing strategic importance of craft beverages, particularly in fiercely competitive categories. While the conference focused on premium, limited-service concepts, these trends are somewhat universal across many different categories including full-service, cafés/bars and even more traditional fast food. Below, we’ll take a look at three of the most interesting upcoming trends in proprietary craft beverages, including cold brew coffee, adult sodas and mixology, and sophisticated juice blends.
Despite the unrelenting innovation seen in hot drinks in developed markets in recent years (particularly in the US where third-wave coffee shops continue to bring super premium roasts and a renewed focus on brewing methods into the mainstream) there is still room to grow in coffee, most significantly in the iced coffee space.
Many coffee shops have been experimenting with ways to sell more coffee in warmer seasons, as well as during mealtimes when consumers in many developed markets tend to prefer cold drinks. This has led to plenty of innovation in cold brew coffee methods, which can yield a stronger, better tasting, and smoother iced coffee that doesn’t need to be sweetened or mixed into indulgent blended drinks to be palatable. Most recently, many shops have even begun experimenting with the texture of cold brew coffee, introducing nitrogen-infused taps to create a smoother mouth-feel.
While so far this trend has been focused in the specialist coffee shops space, it’s notable that much of this innovation is geared toward making coffee more conducive to consumption during a larger number of occasions and, by extension, within a wider range of categories and formats. Consumers in developed markets are drinking more premium coffee throughout the day, and they’re beginning to see a premium coffee program as adding essential value not just to coffee shops but to restaurants of all types. This has been particularly apparent in the fast casual category in the US, where many operators are experimenting with concepts that are part coffee shop, part fast casual outlet, and in some cases part bar or full-service restaurant. One such concept, Venice, California’s Superba Food and Bread, offers a fast casual space with counter service that shifts alongside the clock. In the morning it is a bakery-café serving hot breakfast sandwiches, fresh breads, and tartine alongside cold brew coffee on tap, and in the afternoons the coffee counter transitions into a bar space while the menu shifts to snacks and larger shareable plates. Starbucks also offers a particularly powerful argument for cold-brew coffee transitioning fully into the mainstream, with its national cold-brew roll-out in the US in the summer of 2015.
Mixology has become an important trend in proprietary beverages, due to its focus on handcrafting and fresh preparation methods. Cocktails are made to order in front of the customer, and they are meant to be sipped, savoured, and enjoyed as an experience rather than just a drink. These benefits align well with what consumers in wealthier markets are now looking for from their non-alcoholic beverage options: They want to feel like the value of their beverages goes beyond the utilitarian, that they include interesting flavours and fresh seasonal ingredients, that they have been hand-made to order, and that they improve the overall experience of the meal.
This trend has grown in parallel to another movement in “adult” sodas, or sparkling beverages that include more sophisticated flavours and generally less-sweet profiles. While these beverages can still be somewhat indulgent, often sweetened with real sugar or fruit juice, the key to their positioning is that sweetness is not the primary note. As a result, they are often also flavoured with bitter, sour or spicy ingredients, such as vinegar, ginger, herbs, or citrus.
One example of a beverage growing in popularity that exemplifies both of these trends is the use of drinking vinegars to made non-alcoholic shrubs and other sour, fruit- and vinegar-based soft drinks. Drinking vinegars can be mixed with carbonated water, fruit juices, and fresh ingredients to create handcrafted drinks that are simultaneously indulgent and refreshing, and are perceived to offer high value due to their similarities to cocktails.
This trend is an extension of the cold-pressed juice movement, which has since evolved toward a more mainstream appeal that can be applied in any number of fast food and full-service environments. Just as with adult sodas, the appeal of these drinks hinges on their presentation—they must be prepared fresh, with well-chosen ingredients, and their flavours must go beyond the sweet and expected. Many outlets have been incorporating vegetables and herbs into their juices, offering refreshing, often functional drinks that are perceived to be both healthful and high value.
In particular, this trend has manifested through offerings of aguas frescas and non-traditional lemonades, often flavoured with cucumber, lavender, or any number of other seasonal fruits. These proprietary beverages are cold, refreshing and satisfying, but they offer something different than the standard option.
Fast casual chain Tender Greens is a great example of how such beverages can add value, with a menu of drinks that includes mint lemonade and aguas frescas made with seasonal melons. While these beverages add value for the customer and help to elevate average checks, they also reinforce the brand’s positioning as a farm-to-table style outlet with the focus firmly on seasonal ingredients. Premium casual dining chain The Cheesecake Factory has also experimented with sophisticated juice offerings, incorporating elements of the mixology trend to further elevate a traditional lemonade offering. The concept serves a variety of uniquely flavoured, fresh-squeezed lemonades, which are advertised as being made behind the bar and served in a sugar-rimmed glass.