Delivering the experience that consumers crave
Clover Vertica. Image: Starbucks Coffee
Foodservice operators are challenged with offering consumers either speedy service or an ‘experience,’ but they must also remain innovative and continue to meet consumers ever-changing beverage desires. By Anne-Marie Hardie
Consumers have been awakened to the potential of beverages and are seeking spaces that can deliver a memorable experience. In a time of global inflation, customisable drinks provide individuals with an opportunity for affordable indulgences. For the cafés and quick service restaurants, it is a delicate balance of meeting consumers’ need for speed while ensuring they receive the customisable experience they desire.
In this highly competitive market, one of challenges for chain restaurants and cafés will be maintaining that consistent experience across the various platforms. The pot with ready-made coffee is becoming a thing of the past with increased awareness of the flavour of freshly brewed coffee. Bean-to-Cup machines, automatic coffee stations, and even robot cafés are expanding into various spaces, from convenience stores to cafés.
The Clover Vertica, an on-demand, single-cup brewer, has been installed in nearly 10 percent of Starbucks Coffee’s company-operated locations throughout the United States, with the goal of having it installed in almost 60 percent of Starbucks-operated US stores in fiscal year 2024. “This will continue to elevate our coffee offering while also making partners more productive by reducing waste and creating efficiencies in-store, allowing them to spend more time doing what they do best: connecting with our customers,” said Laxman Narasimhan, CEO, Starbucks Corp.
According to Research and Markets, the global market for fully automated coffee machines is projected to reach USD $6.2 billion with a projected growth annual growth rate of 4.4 percent from 2022 to 2030. The quick service restaurant (QSR) segment is projected to increase their rate of adoption by 4.3 percent annually, while the full-service restaurant segment is estimated to have an annual growth rate of 4.8 percent.
“There are so many ways to enjoy coffee; personalisation, customisation, and variety are more important than ever,” said Elizabeth Lang, senior director of product marketing and consumer insights at Peet’s Coffee. It is about providing consumers with the ability to customise the entire experience, from the ordering to where the beverage is consumed. One feature Peet’s has introduced into its mobile application is the ability for consumers to select from a plant-based menu, making it easier to find what they are looking for. The demand for plant-based options has remained consistent, evolving from a trend to a permanent fixture on menus to respond to the needs of consumers that are seeking vegan alternatives.
The continued demand for interesting and unique beverages continues to provide an opportunity for restaurants to connect with their consumers. As a direct result the players in the specialty beverage space are expanding beyond the cafés to full-service restaurants and several QSR locations. A&W serves Organic Fairtrade coffee and an entire page of its website tells the story behind the beans that A&W sources, and the beverages created using these beans. Its brew bar, which is available at select locations, provides consumers with several beverage options including espresso-based beverages and cold brew.
Several other chain restaurants are also expanding their coffee menu, including Wendy’s, Burger King, and iHop. Taco Bell is exploring how coffee can become a part of its consumers’ experience. In December 2023, Taco Bell piloted a line of seven frozen coffees and shakes in select California locations. The beverages, which included Mexican chocolate, caramel churro, and spiced vanilla, were inspired by authentic Mexican flavours. The chain has also partnered with Beekeeper Coffee to offer a limited edition Horchata cold brew at select Taco Bell locations.
McDonald’s continues to expand into the coffee space, including a recent McCafé makeover that focused on packaging and product offerings. On 26 March 2024, McDonald’s Canada offered five varieties of cold brew at its Canadian locations.
“Good things take time. Just as the cold-brew process enhances the smooth, delicious flavour of cold brew, we invested time in perfecting our recipe and are confident our guests will love it,” said chef, Jeff Anderson, culinary innovation lead at McDonald’s Canada. “Whether you’re a long-time cold brew lover or trying it for the first time, we’re excited to give our guests a new way to enjoy McCafé coffee.”
Catering to younger consumers
In the US, McDonald’s is testing its new concept restaurant, CosMc’s. The first location opened in Bolingbrook, Illinois, in December 2023; the second location opened in Dallas, Texas, this March, which was quickly followed by two additional locations in North Texas (Watauga and Arlington) in April. A Gen Z-focused format, these beverage-led spaces, which are drive-thru only, are centred on providing consumers with a menu to explore bold and innovative beverage experiences paired with café inspired treats. Consumers can customise their beverage experiences with flavour syrups, wellness shots, and even popping boba.
Customisation remains at the heart of the Starbucks experience. “We share with customers ways to make their beverages uniquely theirs so they find a beverage they cannot get anywhere else,” said Brady Brewer, CEO, Starbucks International. “Whether it’s adding a shot of espresso, a flavour, oat milk or increasingly a cold foam. And we use analytics to discover what’s trending, and then we amplify those ideas with customers.”
The multinational coffee chain is innovating its platform to include lower-calorie, plant-based, wholesome products to respond to consumers’ shifting needs. “With the cold beverages, there are infinite customisations possible on the cold beverage platform,” said Brewer. “And that means it’s increasingly a beverage you can’t get anywhere else.”
On 16 April, Starbucks launched a range of spice-infused beverages, including three spicy lemonade refreshers and a spicy cream cold foam, providing consumers the option of customising a variety of beverages with a bit of spice. “Over the next few months, we will be introducing three new beverage platforms, each of which is squarely aimed at our Gen Z and millennial customers across the range of coffee and cold beverages and compelling for the afternoon,” said Narasimhan.
Historically, coffee shop afternoons were tranquil, allowing staff to rest up after the morning rush. However, this is no longer the case, as there continues to be a shift of consumers seeking out cafés for a moment of afternoon indulgence. “Patterns have changed; Tuesdays through Thursdays are much bigger days for our downtown locations, and our neighbourhood locations are no longer empty during the afternoons,” said Lang. “The coffee shop is now often the person’s second coffee in the day, with consumers continuing to brew their first cup at home, and so that second cup is often a bit more indulgent.”
The influence of healthier lifestyles
Wellness continues to be a priority for consumers actively seeking beverages that can respond to these needs. This includes seeking functional ingredients: turmeric, matcha, Vitamin C shots, and natural ingredients, like fruit inclusions. “Today, our tea business is growing at nearly twice the rate of the global tea market, and we are one of the largest purchases of the world’s ceremonial grade matcha. In Japan for instance, we’ve seen terrific success in tea with our matcha-based products, including through our nascent Starbucks tea stores in that market,” said Narasimhan, adding, “we also see strong momentum for tea in Korea, China, and increasingly in the US.”
There is also an increased awareness of caffeine consumption, with more consumers looking for low caffeine and decaffeinated options. “We are seeing a rise in decaf and half caffeinated, particularly amongst younger consumers who seem increasingly wary about their relationship with caffeine,” said Lang. Decaffeinated is losing its stigma as more consumers become aware of the process involved with removing caffeine.
“There’s an expectation that you come in and you’re going to be able to try something new that drives that credibility and excitement with the brand and the café experience,” said Lang. One of the strategies that Peet’s Coffee utilises is pairing a familiar flavour with something unfamiliar, for example, vanilla lavender, to provide consumers with a familiar path to experience these new flavour experiences. When determining new flavours, Peet’s Coffee focuses on the experiences that will complement the coffee, bringing out the nuances within the roast.
The expansion of players in the specialty beverage market has resulted in a dynamic environment with each company finding innovative ways to differentiate their consumer experience. Although cold is currently driving demand, especially, during those afternoon occasions, there is room to grow in every category. Consumers are thirsty for their next beverage adventure, the challenges for the industry will be responding to their curiosity while ensuring that the offerings in store deliver the positive brand experience so that consumers return for more.
- Anne-Marie Hardie is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: [email protected].
