I’m impressed and intrigued with Taco Bell’s Jan. 16th announcement about its new beverage lineup. Extensive product launches like this aren’t done without a clear strategy, and with a chain as large as Taco Bell, you can bet it’s something the industry can learn from.
First, the drinks. The superchain has wielded its brand power by partnering with superbrand PepsiCo to develop several proprietary beverages—which demonstrates the new-age win-win-win business proposition that people attend seminars to learn about. Describing the drinks, Taco Bell’s press release announces, The brand’s PepsiCo® partnership – a collaboration that has led to Taco Bell being one of Mountain Dew’s largest national customers – continues with six new beverages being added at select locations starting immediately and expanding nationally through 2014. The three new carbonated soft drinks are: Manzanita Sol®, Diet Mtn Dew® Baja Blast™ and Mtn Dew Sangrita Blast. The three non-carbonated drinks include two bold flavors from Brisk: the tropically-inspired Brisk® Mango Fiesta, and a new refreshing mix combining Brisk Iced Tea and Lemonade, as well as zero-calorie and nutrient-enhanced SoBe® Lifewater™ Yumberry Pomegranate.
We don’t have to guess what Taco Bell’s strategy is for expanding the menu by using new proprietary beverages. The company spelled it out. A key element in the brand’s ongoing 10-year growth plan to double the business, these new flavors and Taco Bell’s continued innovation in specialty beverages extend the snacking day part for the brand. To that end, the brand also launched Happier Hour® in 2013. Here are some key beverage points to take away:
- Building the snacking daypart is one of the newer growth strategies among quick-serve restaurants. Taco Bell has realized, as all should, that beverages, whether a unique soft drink or a mixed and foamy concoction—completely counts as a snack in the consumer’s mind, as long as it’s craveable. Better if it can’t be purchased anywhere else.
- Why have convenience stores been allowed the title “beverage destination” for so long? It’s time for more quick-serve restaurants to step up their beverage program, which may require rethinking the beverage pricing strategy. Rather than aim for high beverage margins, consider value pricing and volume building. Guests may decide to add French fries, a wrap or a sandwich to the drink order.
- When evaluating the beverage program, consider the target audience. Some groups are more predisposed to ordering beverages. According to Mintel’s upcoming Dining Out: A 2014 Look Ahead—U.S., January 2014 report, while 29% of consumers overall ordered a specialty non-alcoholic-based drink when dining out in the past month, 36% of Hispanics did so. As for soft-drink ordering from a restaurant in the past month, 54% of men, compared to 46% of women ordered at least one soft drink. And finally, when asked about ordering specialty drinks as a snack or part of a snack in the past month, 63% of women, compared to 59% of men did so. By generation groups, 70% of those in Generation X (ages 38 to 49) ordered a specialty drink as a snack.
I expect more restaurants to amp up their beverages in the coming year, just because consumers respond. I’m sure McDonald’s with its McCafe attests to that.
Tell me what you think.
Jody
