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Non-alcoholic Beverage Trends at Restaurants - US - April 2010

This report explores non-alcoholic beverage trends in restaurants. It identifies key developments that are changing consumer habits and usage, as well as taking into consideration health and wellness trends and the current economic climate. Mintel finds opportunities exist for industry players to woo customers with beverage choices providing health and variety, underscored with value and supported by promotion.

In addition, this report will discuss:

  • The recession’s impact on consumer confidence and, in turn, restaurant sales
  • The obesity epidemic and its connection with beverage consumption
  • How health trends continue to shape consumer choice of beverages
  • What’s on the beverage menu by type, flavor and trend
  • How beverage menus differ by restaurant segment and which segment rises to the top in terms of customer satisfaction of beverage choice availability
  • The importance of soda brands on the menu and beverage pricing trends
  • How tea beverages are finding favor as a healthy beverage and provide a vehicle for innovation in flavor diversity
  • How quick-service restaurants have influenced the coffee platform within the restaurant industry as well as innovation by types of coffee and pricing trends
  • Why frozen beverages are an area for innovation and how players are responding with more economical options
  • A comprehensive look into elements that drive successful marketing initiatives of restaurant brand beverage platforms

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Mintel Menu Insights
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Consumers react to recession…
                        • …creating tough times for the restaurant category
                          • Health and wellness trends encourage healthier beverage choices
                            • What’s on the beverage menu?
                              • Restaurant segments take different approaches to beverage menu
                                • Soda: the power of the brand
                                  • Tea innovation: specialty teas
                                    • Coffee innovation: co-existence of value and premium
                                      • Frozen beverage innovation: blurring the lines
                                        • Top beverage brands in restaurants and the advertising landscape
                                          • Health and price—motivators to shift away from “unhealthy” restaurant beverages
                                            • Consumers gravitating towards natural beverage choices
                                              • Beverage diversity appeals to under-35s and Asians
                                                • What the kids are drinking
                                                • Insights and Opportunities

                                                  • Overview
                                                    • Insight into beverage restaurant trends
                                                      • Let’s start with the good news
                                                        • Here’s the bad news
                                                          • Let’s explore the opportunities
                                                            • Spinning health on the beverage menu
                                                                • Figure 1: Leading health-related claims for non-alcoholic restaurant beverages, Q4 2007-Q4 2009
                                                              • The takeaway for restaurants
                                                                • Demand for beverage diversity
                                                                  • The takeaway for restaurants
                                                                  • Inspire Insights

                                                                      • Dual trends: Customization and Tug of War
                                                                        • Customization—It’s about getting what you want, the way you want it
                                                                          • Tug of war—It’s about balancing health versus indulgence
                                                                            • What we’ve seen
                                                                              • Beverage bar
                                                                              • Market Factors

                                                                                • Consumer confidence shattered by recession
                                                                                    • Figure 2: Unemployment and underemployment rates, January 2007-January 2010
                                                                                    • Figure 3: Real personal disposable income, January 2007-December 2009
                                                                                    • Figure 4: Consumer sentiment index, by quarter, 2001-09
                                                                                  • Restaurant sales a casualty of recession
                                                                                    • Figure 5: Consumer Price Index for key consumer markets, August 2007-09
                                                                                    • Figure 6: Restaurant Performance Index, current situation, and expectations, January 2009-December 2009
                                                                                  • Americans’ waistlines expand
                                                                                    • Figure 7: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2006
                                                                                    • Figure 8: Incidence of presently watching/controlling diet, 2003 and 2008
                                                                                  • Growing consumer concern about the negative side effects of obesity
                                                                                    • Figure 9: Reasons for watching/controlling diet, 2003 and 2008
                                                                                  • Obesity among children—concern for future obese adults
                                                                                      • Figure 10: Percentage of population who are overweight or obese, 2-19 years of age, 1976-2006
                                                                                    • Obesity and beverage consumption—there’s a connection
                                                                                      • Sugar in beverages is the culprit—how much sugar do we need?
                                                                                          • Figure 11: Average sugar* intake on any given day by drinking certain non-alcoholic beverages, by gender, by age, 2006
                                                                                        • Health trends shape consumer restaurant beverage choices
                                                                                            • Figure 12: Changes in consumption of non-alcoholic beverages at restaurants, by type, January 2010
                                                                                            • Figure 13: Future expectations to change consumption of non-alcoholic beverages at restaurants, by type, January 2010
                                                                                        • Beverage Trends: Types of Non-Alcoholic Drinks

                                                                                          • Key points
                                                                                            • Beverage menu trends
                                                                                              • Soda accounts for nearly a third of all non-alcoholic beverages on the menu
                                                                                                • Orange and strawberry most popular flavors on the menu
                                                                                                  • Figure 15: Taco Bell television ad, Frutista Freeze, July 2009
                                                                                                  • Figure 16: Top 15 non-alcoholic beverage flavors at restaurants, Q4 2007-Q4 2009
                                                                                                • Trend forward
                                                                                                • Beverage Trends: Restaurant Segments

                                                                                                  • Key points
                                                                                                    • QSRs have the largest beverage menu; fast casual most limited
                                                                                                      • QSR Beverage Capsule
                                                                                                        • Family Restaurant Beverage Capsule
                                                                                                          • Casual Restaurant Beverage Capsule
                                                                                                            • Fine Dining Beverage Capsule
                                                                                                              • Fast Casual Beverage Capsule
                                                                                                                • Figure 17: Top 15 non-alcoholic beverage types, by restaurant segment, Q4 2009
                                                                                                              • Casual restaurants’ beverage options are the most satisfying
                                                                                                                • Figure 18: Level of satisfaction with restaurant beverage options, by restaurant segment, January 2010
                                                                                                            • Innovations and Innovators: Soda

                                                                                                              • Key points
                                                                                                                • The power of brands
                                                                                                                  • Coke dominates fountain beverages
                                                                                                                      • Figure 19: Top 15 brands of soda beverages on the menu, Q4 2007-Q4 2009
                                                                                                                    • Higher soda prices drive profitability even higher
                                                                                                                        • Figure 20: Top 15 non-alcoholic beverage types at restaurants, by average price, Q4 2007-Q4 2009
                                                                                                                    • Innovations and Innovators: Tea

                                                                                                                      • Key points
                                                                                                                        • Trends and innovations of tea beverages
                                                                                                                          • QSRs and Family restaurants impose greatest price increases
                                                                                                                            • Figure 21: Average price of tea, by restaurant segment, Q4 2007-Q4 2009
                                                                                                                          • Tea as a BFY beverage
                                                                                                                              • Figure 22: Tea beverages at restaurants, by nutritional claim, Q4 2007-Q4 2009
                                                                                                                            • Specialty teas
                                                                                                                              • Fruit flavor inspirations
                                                                                                                                  • Figure 23: Top 15 tea flavors, by restaurant segment, Q4 2009
                                                                                                                              • Innovations and Innovators: Coffee

                                                                                                                                • Key points
                                                                                                                                  • Trends and innovations of coffee beverages
                                                                                                                                    • QSRs most innovative with coffee menus
                                                                                                                                        • Figure 24: Top non-alcoholic coffee beverage types, by restaurant segment, Q4 2009
                                                                                                                                      • Number of coffee drinks down, new specialty coffees on the rise
                                                                                                                                          • Figure 25: Top non-alcoholic coffee beverage types at restaurants, Q4 2007-Q4 2009
                                                                                                                                        • Coffee prices on the rise—what about Starbucks?
                                                                                                                                            • Figure 26: Starbucks television ad, Don’t believe everything you hear, June 2009
                                                                                                                                            • Figure 27: Average price of non-alcoholic coffee beverage types at restaurants, Q4 2007-Q4 2009
                                                                                                                                        • Innovations and Innovators: Frozen Beverages

                                                                                                                                          • Key points
                                                                                                                                            • Trends and innovations of frozen beverages
                                                                                                                                              • Smoothies getting more play on non-smoothie shop beverage menus
                                                                                                                                                • Shakes remain a frozen beverage stalwart
                                                                                                                                                  • Restaurants turn to slush innovations as an economical beverage option
                                                                                                                                                    • Figure 28: Non-alcoholic frozen beverage types at restaurants, Q4 2007-Q4 2009
                                                                                                                                                  • Smoothies top price point in frozen beverages
                                                                                                                                                    • Figure 29: Average price of non-alcoholic frozen beverage types at restaurants, Q4 2007-Q4 2009
                                                                                                                                                • Brands and the Advertising Landscape

                                                                                                                                                  • Overview of the brand landscape
                                                                                                                                                    • Brand analysis: McDonald’s
                                                                                                                                                      • Sales performance
                                                                                                                                                        • Focus on premium at a value
                                                                                                                                                            • Figure 30: McDonald’s television ad, McCafé Coffee Break, May 2009
                                                                                                                                                          • Continuing to diversify beverage menu
                                                                                                                                                            • Figure 31: McDonald’s television ad, McCafé Frappés, November 2009
                                                                                                                                                          • Targeting the affluent
                                                                                                                                                            • Figure 32: Brand analysis of McDonald’s beverage platform, 2010
                                                                                                                                                          • Brand analysis: Dunkin’ Donuts
                                                                                                                                                            • Sales performance
                                                                                                                                                              • Value promotions and innovation lead to increased loyalty
                                                                                                                                                                • Marketing healthy beverages on the menu
                                                                                                                                                                  • Usage of social media
                                                                                                                                                                    • Targeting the on-the-go younger consumer
                                                                                                                                                                      • Figure 33: Dunkin’ Donuts television ad, Dunkin’ Donuts Coffee, March 2010
                                                                                                                                                                      • Figure 34: Brand analysis of Dunkin’ Donuts’ beverage platform, 2010
                                                                                                                                                                    • Brand analysis: Sonic
                                                                                                                                                                      • Sales performance
                                                                                                                                                                        • Marketing and promotion of the beverage menu
                                                                                                                                                                          • Targeting the snacker
                                                                                                                                                                            • Figure 35: Sonic’s television ad, Carhop on Skates, October 2009
                                                                                                                                                                            • Figure 36: Brand analysis of Sonic’s beverage platform, 2010
                                                                                                                                                                          • Adspend
                                                                                                                                                                              • Figure 37: Select restaurant advertisers*, by segment, 2007 and 2008
                                                                                                                                                                          • Non-Alcoholic Beverage Consumption: An Overview

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Choice of beverage differs at restaurants than when consuming at home
                                                                                                                                                                                  • Figure 38: Non-alcoholic beverage consumption, by beverage type at home and restaurants, January 2010
                                                                                                                                                                                • Types of non-alcoholic beverages drunk at restaurants
                                                                                                                                                                                  • Figure 39: Types of non-alcoholic beverages drunk at restaurants, by gender, January 2010
                                                                                                                                                                                • Younger adults more likely to deviate from traditional non-alcoholic beverages
                                                                                                                                                                                  • Figure 40: Types of non-alcoholic beverages drunk at restaurants, by age, January 2010
                                                                                                                                                                                • Higher-income households more likely to order beverages
                                                                                                                                                                                  • Figure 41: Types of non-alcoholic beverages drunk at restaurants, by HH income, January 2010
                                                                                                                                                                              • Shifts in Consumption Patterns

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • More bottled water at restaurants; less dessert beverages
                                                                                                                                                                                      • Figure 42: Changes in consumption of non-alcoholic beverages at restaurants, by type, January 2010
                                                                                                                                                                                    • Reasons for drinking fewer non-alcoholic beverages
                                                                                                                                                                                      • Figure 43: Reasons for drinking fewer non-alcoholic beverages at restaurants, by gender, January 2010
                                                                                                                                                                                    • Tap water replacing beverages to save money
                                                                                                                                                                                      • Figure 44: How budgeting more has changed consumption of non-alcoholic beverages at restaurants, by gender, January 2010
                                                                                                                                                                                    • Expectations for future: shift to healthier non-alcoholic beverages
                                                                                                                                                                                      • Figure 45: Future expectations to change consumption of non-alcoholic beverages at restaurants, by type, January 2010
                                                                                                                                                                                  • Attitudes and Behaviors of Non-Alcoholic Beverage Drinkers

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Health perceptions
                                                                                                                                                                                        • Figure 46: Health perceptions of non-alcoholic beverages, by gender, January 2010
                                                                                                                                                                                      • Younger age groups more health-aware in beverage choices
                                                                                                                                                                                        • Figure 47: Health perceptions of non-alcoholic beverages, by age, January 2010
                                                                                                                                                                                      • Ordering behavior
                                                                                                                                                                                        • Figure 48: Non-alcoholic beverage ordering behavior, by gender, January 2010
                                                                                                                                                                                      • Younger beverage drinkers more adventurous when ordering
                                                                                                                                                                                        • Figure 49: Non-alcoholic beverage ordering behavior, by age, January 2010
                                                                                                                                                                                      • Decision influencers and important factors
                                                                                                                                                                                        • Figure 50: Decision influencers and important factors regarding drink and restaurant choice, by gender, January 2010
                                                                                                                                                                                      • Younger restaurant users drinking wider variety of non-alcoholic beverages
                                                                                                                                                                                        • Figure 51: Decision influencers and important factors regarding drink and restaurant choice, by age, January 2010
                                                                                                                                                                                    • Non-Alcoholic Beverage Choices for Kids

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Juice is the most ordered beverage for kids
                                                                                                                                                                                            • Figure 52: Beverages parents order for their child, by gender, January 2010
                                                                                                                                                                                          • Child’s request drives beverage choice
                                                                                                                                                                                            • Figure 53: Decision influencers on parents’ choice of beverage for their child, by gender, January 2010
                                                                                                                                                                                        • Beverages Consumers Want to See More Of

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Consumers are looking for healthier options on the beverage menu
                                                                                                                                                                                                • Figure 54: What consumers want to see more of on the beverage menu, by gender, January 2010
                                                                                                                                                                                              • Young beverage drinkers looking for greater variety of soda flavors
                                                                                                                                                                                                  • Figure 55: What consumers want to see more of on the beverage menu, by age, January 2010
                                                                                                                                                                                              • Impact of Race/Hispanic Origin

                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Asians prefer less traditional beverages at restaurants
                                                                                                                                                                                                    • Figure 56: Types of non-alcoholic beverages drunk at restaurants, by race/Hispanic origin, January 2010
                                                                                                                                                                                                  • Asians show most interest in BFY non-alcoholic drinks
                                                                                                                                                                                                    • Figure 57: Health perceptions of non-alcoholic beverages, by race/Hispanic origin, January 2010
                                                                                                                                                                                                  • Asians most likely to order beverage options beyond soda
                                                                                                                                                                                                    • Figure 58: Non-alcoholic beverage ordering behavior, by race/Hispanic origin, January 2010
                                                                                                                                                                                                  • Blacks want bottled water choices; Asians interested in smoothies
                                                                                                                                                                                                    • Figure 59: What consumers want to see more of on the beverage menu, by race/Hispanic origin, January 2010
                                                                                                                                                                                                • Cluster Analysis

                                                                                                                                                                                                    • Coffee with no refill
                                                                                                                                                                                                      • Cluster demographics
                                                                                                                                                                                                        • Cluster characteristics
                                                                                                                                                                                                          • Opportunities
                                                                                                                                                                                                            • Multi-beveragists
                                                                                                                                                                                                              • Cluster demographics
                                                                                                                                                                                                                • Cluster characteristics
                                                                                                                                                                                                                  • Opportunities
                                                                                                                                                                                                                    • Same old soda
                                                                                                                                                                                                                      • Cluster demographics
                                                                                                                                                                                                                        • Cluster characteristics
                                                                                                                                                                                                                          • Opportunities
                                                                                                                                                                                                                            • Cluster characteristics
                                                                                                                                                                                                                              • Figure 60: Restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 61: Restaurant usage frequency, by restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 62: Non-alcoholic beverage consumption, by beverage type at home and restaurants, by restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 63: Health perceptions of non-alcoholic beverages, by restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 64: Non-alcoholic beverage ordering behavior, by restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 65: Decision influencers and important factors regarding drink and restaurant choice, by restaurant clusters, January 2010
                                                                                                                                                                                                                              • Figure 66: Satisfaction level of non-alcoholic beverage choices, by restaurant segment, by restaurant clusters, January 2010
                                                                                                                                                                                                                            • Cluster demographics
                                                                                                                                                                                                                              • Figure 67: Restaurant clusters, by gender, January 2010
                                                                                                                                                                                                                              • Figure 68: Restaurant clusters, by age, January 2010
                                                                                                                                                                                                                              • Figure 69: Restaurant cluster, by household income, January 2010
                                                                                                                                                                                                                              • Figure 70: Restaurant clusters, by race, January 2010
                                                                                                                                                                                                                              • Figure 71: Restaurant clusters, by Hispanic origin, January 2010
                                                                                                                                                                                                                            • Cluster methodology
                                                                                                                                                                                                                            • Appendix: Trade Associations

                                                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                                                              • American Beverage Association, The
                                                                                                                                                                                                                              • American Heart Association, Inc.
                                                                                                                                                                                                                              • Boston Market Corporation
                                                                                                                                                                                                                              • Bureau of Economic Analysis
                                                                                                                                                                                                                              • Burger King Corporation
                                                                                                                                                                                                                              • Coca-Cola Company (The) (USA)
                                                                                                                                                                                                                              • Del Taco, Inc.
                                                                                                                                                                                                                              • Dunkin' Brands
                                                                                                                                                                                                                              • Facebook, Inc.
                                                                                                                                                                                                                              • Food Distributors International
                                                                                                                                                                                                                              • Greenfield Online
                                                                                                                                                                                                                              • Institute of Food Technologists (IFT)
                                                                                                                                                                                                                              • International Bottled Water Association
                                                                                                                                                                                                                              • International Foodservice Distributors Association (IFDA)
                                                                                                                                                                                                                              • International Foodservice Manufacturers Association (IFMA)
                                                                                                                                                                                                                              • Jamba Juice Company
                                                                                                                                                                                                                              • KFC Corporation
                                                                                                                                                                                                                              • McDonald's U.S.A.
                                                                                                                                                                                                                              • National Association of Realtors (NAR)
                                                                                                                                                                                                                              • National Cancer Institute (NCI)
                                                                                                                                                                                                                              • National Council of Chain Restaurants (NCCR)
                                                                                                                                                                                                                              • National Nutritional Foods Association
                                                                                                                                                                                                                              • National Restaurant Association (NRA)
                                                                                                                                                                                                                              • National Retail Federation (NRF)
                                                                                                                                                                                                                              • National Soft Drink Association
                                                                                                                                                                                                                              • Nestlé USA
                                                                                                                                                                                                                              • Panera Bread Company
                                                                                                                                                                                                                              • PepsiCo Inc
                                                                                                                                                                                                                              • Pizza Hut Inc
                                                                                                                                                                                                                              • Research In Motion (USA)
                                                                                                                                                                                                                              • Starbucks Corporation
                                                                                                                                                                                                                              • Taco Bell Corp.
                                                                                                                                                                                                                              • The Wendy's Company
                                                                                                                                                                                                                              • Tim Hortons (USA)
                                                                                                                                                                                                                              • Twitter, Inc.
                                                                                                                                                                                                                              • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                                              • U.S. Department of Agriculture
                                                                                                                                                                                                                              • World Health Organization

                                                                                                                                                                                                                              Non-alcoholic Beverage Trends at Restaurants - US - April 2010

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