It may seem as if every time you head out to eat, the restaurant is pushing a new specialty drink — shakes, smoothies, frappés, sparklers, slushies, quirky coffees and so on. Why the big focus on beverages? For one thing, drinks are generally much more profitable than food. For another, a range of weird and exciting liquid concoctions can lure in more customers, especially during the hours that consumers traditionally stay away from restaurants, like from 1 p.m. to 3 p.m.
A new NPD Group report states that the 1-to-3 window is in fact the peak period for beverage-only food service, when a customer visits a restaurant and orders a drink (often to go, but not necessarily) and no food. Overall, beverage-only restaurant visits are on the rise. The NPD study notes that for the 12-month period ending in June, restaurant visits including both food and beverage orders were down 2%, yet total restaurant visits remained the same, thanks to an increase in customers heading into restaurants just to grab a drink:
“Consumers are responding to new beverage introductions and the aggressive promotion of beverages, and as a result, beverage-only has become a significant growth opportunity for the food-service industry,” says Kyle Olund, the director of food-service product development at NPD.
It’s not hard to find examples of chain restaurants’ new specialty concoctions, many of which are indeed promoted aggressively. One of the oddest, rolled out at some Taco Bells, is a mix of Mountain Dew and orange juice called Mtn Dew A.M., suggested as a fine drink to start off the day. The Red Robin chain recently introduced a seasonal beer milkshake consisting of vanilla ice cream and caramel in a frothy glass of Samuel Adams Octoberfest. “Boozy shakes are kind of a thing right now,” Mintel food-service analyst Kathy Hayden told Reuters.
So, apparently, are after-meal restaurant visits by patrons seeking a liquid dessert of sorts. Think of beverages like Dairy Queen’s Orange Julius smoothies, Taco Bell’s Fruitista Freezes and the spectrum of frappés, mochas, lattes and premium coffees at McDonald's, Dunkin’ Donuts, Burger King, Starbucks and beyond. A graph in the NPD Group report features two noticeable spikes in daily beverage-only restaurant visits: one from around 1 p.m. to 3 p.m., the other roughly 6 p.m. to 8 p.m.
It’s drinks like these that help restaurants keep money coming in during hours that otherwise would be dead. What’s more, whereas food often is sold at slim profit margins — especially items that are on dollar or value menus, which almost amount to loss leaders — beverages are usually far more profitable. As Brian Niccol, Taco Bell’s chief marketing officer, told the Associated Press, “The more often you can sell a drink, the better you feel about providing discounts on other items.”