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Thanks in large part to Starbucks, McDonald's and Dunkin' Donuts, beverages have been on trend for many years now. It doesn't hurt that beverages add nontraditional daypart occasions and high-margin incremental sales.
Redefined desserts are starting to do the same. Sonic, for example, just reintroduced its cheesecake bites, fitting the "snacking" trend without going to excess.
With these menu items, however, there is a tricky balance in finding "on trend" and "trend forward" innovations, according to Rolie Zagnoli, managing director the Zagnoli Trading Company.
"You don't want to be too far out. Companies confuse real innovation with novelty. People don't buy what you do, they buy why you do it," he said. To find the right balance, it's important to find key differentiators with products, and to "be students of the industry."
Millennials are driving many of the hot and cold beverage trends, with iced tea and specialty coffees leading the serving totals. They're followed by juices/lemonades/shakes and smoothies. To develop a "trend forward" line, Zagnoli suggests experimenting with craft carbonation, nonalcoholic drinks, energy drinks with higher juice content, flavored dessert drinks, freshly-brewed teas with fruit and botanicals, and juice beverages with global influences.
Zagnoli was joined by Louis Basile, founder and president of Wildflower Bread Company; Ken Kimmel, former SVP at Baskin-Robbins and current president of On The Spot Systems; and Richard Yoo, former senior director of new product innovation at McDonald's and current VP of innovation at Mattson & Company, for a panel on "New Menu Stars: Beverages and Desserts" at the Fast Casual Executive Summit this week in New Orleans. Each of the executives provided background stories and tips on how to execute these on-demand menu options.
Kimmel: Know your voice and how to talk to your customers.
Kimmel's experience at Dunkin' Brands offered him a glimpse into the company's strategy: Sell coffee plus one (the plus one is one of the brand's signature bakery items). Dunkin' also tied in a "democratic" marketing campaign with a message surrounding accessibility.
"At our restaurants, you could find a Harvard professor, the landscaper from down the street and a mom in a minivan. This is what we wanted," he said.
When products came up for potential rollout, the company would "Dunkin-ize" them by making them fast and accessible.
Kimmel added that it's also important not to be afraid to fail. Dunkin's original espresso-based drinks failed, he said, but the company revisited the platform 10 years later and now they're a "tremendous" part of the company's portfolio. He also warned against being bullied into doing something just because a competitor was doing it very well.
"We are coffee plus one, not hot doughnuts. Don't let a current flashy trend push you in the wrong direction," Kimmel said.
Richard Yoo: Find out what's going on in your guests' lives.
Yoo said there are two pillars of innovation that are especially critical: What is in your pipeline; and how do you know you have some winners in that pipeline? To get information on the latter pillar, companies have to dig deep into "demand moments," when people want to eat and drink.
Demand moments can be found by using data to find out what's going on in their guests' lives, including when they're using the brand and what they're ordering. For example, real personal income is stagnant now, so there's a "share war," Yoo said, including with c-stores and grocery stores.
"Your guests are stressed about their job security, about their debt load. This has real implications for the market," he said. "You can now listen to your guests without spending thousands of dollars. Take technology and turn it into something use-inspired."
Also, to derive pipeline opportunities, Yoo said companies should look at their own brand insights, the competition, parallel categories (c-store, etc.) and other industries.
"The trends used to come from fine dining and then on down. That's not the case anymore — it's everywhere. Do you want to see some trends? Go to Whole Foods," he said.
Louis Basile: Turn brand fans into followers.
Basile talked about the importance of turning customers into followers because that has more staying power and loyalty attached to it. One way to do so is to offer menu items that are "creative and memorable." For example, his Wildflower Bread Company's peppermint coffee features peppermint marshmallows made on site.
Wildflower also does not have a marketing department, but rather, depends on community outreach and sampling.
"During your busiest daypart, be out there engaging and sampling. This is memorable," Basile said.
Read more about menu marketing and promotions.
Cover photo courtesy of Wikipedia.
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