Both adult drinks and nonalcoholic beverages are increasing on restaurant menus, reversing a long-term decline, reported Technomic at Informa Connect’s Future of Beverage Conference that kicked off Wednesday in Austin, Texas.
Rich Shank, senior principal and VP Innovation at Technomic, opened the conference with an overview of State of Beverage: Innovation Playground, Growth Opportunity. He sees overall beverage growth increasing by over 1% into 2029, and more of that growth is coming on restaurant menus. Adult beverages are up 2.8% on menus and nonalcoholic beverages, 5.1%, year over year.
Shank attributes this surge to several factors, he told the audience. Operators are leveraging beverages as snacks and customization is driving growth. What’s more, purchasing beverages as a pick-me-up has grown, motivating 22% of consumers towards a sale.
But consumers, especially those in younger age groups, are looking for beverage diversity. Gen Z and Millennials gravitate toward bubble tea, cold and frozen blended coffee, hot specialty coffees, kombucha, energy drinks and milkshakes.
It’s the “challenger” brands like 7 Brew, Dutch Bros, Scooter’s Coffee and Black Rock that are driving interest in alternative beverage formats, Shank told the audience. They all saw year-over-year growth in traffic, while legacy brands such as Caribou Coffee, Tim Horton’s and Starbucks experienced declines. The challengers all offer more ways to customize and enhance beverages.
How can operators stay ahead of the curve? Technomic offered predictions on “what’s next.”
Consumers are looking for beverages that offer even more customization, allowing personalization of mix-ins, enhancers and toppings, along with an expansion of taste horizons. But Shank warned against too many options, as customers can become bogged down by the proliferation of choices.
Health is a factor, too, with functional ingredients and hydration priorities, but those same drinkers are also seeking indulgent beverages. Operators need to cater to that bifurcation and offer a balance of healthy and indulgent choices.
The Future of Beverage conference runs through Friday, hosted by Informa Connect, parent company of Restaurant Business and Technomic.
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