Monday, March 3, 2008

Splashing into the family market

Fast food’s success with beverages clearly hasn’t gone unnoticed by family specialists one notch up the pricing spectrum. Today brought news of IHOP and Steak n Shake both giving their drink menus a tweak, possibly foreshadowing an overhaul by the whole sector. And all you can think is, What took ‘em so long?

With few exceptions—IHOP and Steak n Shake among them—the segment has been squeezed flatter than a short stack by casual chains edging down market and quick-service players, particularly fast-casual upstarts, creeping upscale. Beverages were always a part of the casual sector’s assault, since places like Friendly’s or Denny’s could hardly compete mojito a mojito. Then came the more recent onslaught of the quick-service restaurants, touting their coffees and floats the way they once hyped burgers. What’s a family restaurant chain to do?

Village Inn responded with a new format that incorporates a distinct coffee bar inside. Clearly the venerable chain is giving more than a nod to Starbucks, the concept that kicked everyone’s butt until the QSRs started kicking back.

But it’s not alone in flycasting new beverage choices into the public’s pool of options. Today IHOP opened the curtain on its new Dr. Seuss-inspired promotional items, including one that sounds like a Bill Cosby hangover remedy. The Beezlenut Splash consists of cherry and blueberry-flavored Jello cubes plopped into lemon-lime soda. It’s just the thing to sip while wolfing down the limited-time special of Green Eggs and Ham, which aren’t nearly as Cat and the Hat-appropriate as they sound. The eggs are your conventional color, though scrambled with spinach to justify the name. “Green” only modifies the eggs; the ham is roughly the hue of a Spalding Pinky.

Steak n Shake’s new drinks are far less surreal. In a breakfast marketing push aimed directly at QSRs, the always-open concept today added a line of morning smoothies. Curiously, although the equipment to whip up the smoothies is obviously always there, the drinks will only be offered at breakfast, suggesting the concept doesn’t want to undercut its lunch or dinner selections, or possibly slow service.

Those brands may actually be a little behind one of the sector’s sumos, Denny’s, which has been steadily expanding its roster of drink choices. Last April, it added a new line called Juicy Fruit Fusion Favorites—basically, blends of juices and soft drinks reminiscent of mocktails.

It remains to be seen if beverages will deliver the sort of sales boost that has helped the QSR segment during a trying time for the industry as a whole. But clearly the family sector is giving that route a try.

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Anonymous Orrick Nepomuceno said...

Look for beverages making a real splash among all the segments. According to the Beverage Information Group's "Cheers On-Premise Handbook 2007", there also seems to be an uptick in adult beverages as well. Apparently, high-end alcohol sales will be what many companies hope will bolster themselves out of the recession.
Honestly, ten years ago, I never thought I would be caught asking my dining buddies. "Mojitos, anyone?"
So maybe these drinks are really here to stay and it is spilling over into the other segments as well.

March 3, 2008 at 9:29 PM  
Anonymous steakman said...

Functional and energy Beverages are here to stay, Coke and Pepsi get it and spent millions in super bowl dollars to promote it. If you are not an alcohol concept then these beverages add increased check average. Just look at how much a rockstar or monster cost. Odwalla and POM are dominating the superfruits.

Sincerely Steakman

March 4, 2008 at 12:24 PM  

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