Booze-free bonanza: Carbonated soft drinks losing ground to innovative alcohol-free beverage options

By Sean Moon
For many restaurant patrons, a lunch or dinner at their favourite establishment often includes a tipple or two of their adult beverage of choice – beer, wine or spirits. More and more Canadian consumers, however, are pushing alcoholic beverages to the back of the shelf in favour of an increasingly wide array of booze-free options.

A surprising fact is that many of these non-alcoholic beverage choices are taking a bit of the pop out of the carbonated soft drink market, supplanting the ubiquitous sodas and colas with offerings that are frequently seen as healthier, less expensive and more flavourful. From specialty iced teas and fruit-based smoothies to bottled or enhanced waters, non-alcoholic beverages have begun assuming a much more prominent position on Canadian restaurant menus.

“Consumers want healthy and fresh in everything they order, including beverages,” says Mathew Mandeltort , manager of research and consulting of industry consulting firm Technomic. “This is why many consumers are gravitating toward non-carbonated options such as fresh-pressed juices, smoothies, specialty coffees and teas. There are also more options than ever before, which has renewed interest in non-alcohol offerings.”

Fizz fading fast

The reasons for the rising popularity of non-carbonated beverages are numerous. Some folks are choosing to forgo the fizz in favour of perceived better-for-you options such as fruit drinks, ades and Latin-inspired agua frescas, even though several of these so-called “healthy” beverages may actually have higher calorie counts than sweetened carbonated soft drinks. Others see non-alcoholic beverages as having a wider demographic appeal by providing family-friendly choices as well as offering much greater variety of alternatives for people concerned about issues such as drinking and driving.

“Non-alcoholic drinks appeal to all ages,” says Mandeltort. “Having a large and varied selection will attract large groups from all demographics because everyone is sure to find something they’ll enjoy drinking on the menu.”

Healthy alternative

When it comes to explaining their popularity, one of the main reasons consumers give for choosing a booze-free beverage is the perception that these drinks are a healthy alternative to both alcohol and carbonated sodas. Predominant in this belief are consumers of bottled or vitamin-enhanced waters, according to product manufacturers such as Nestlé.“Consumers are seeking out healthier beverage options, given that more than 30 per cent of them are unfortunately overweight, obese or in danger of developing diabetes,” says John Challinor, director of corporate affairs for Nestlé Waters Canada. “Consumers are also experimenting with different food choices – more so than ever before. The bottled water segment offers tremendous variety and a natural complement to the many innovative and interesting food choices now available in the marketplace.”

Health is also a prime motivator for many of the patrons of Halifax eatery The Wooden Monkey, which specializes in organic and good-for-you food and beverages. From house-made iced teas crafted from organic tea and Nova Scotia maple syrup to a unique “power juice” consisting of organic juices, kelp alginate extract and hemp oil, the Wooden Monkey is seeing a notable preference for these types of healthier options.

“We have many non-alcoholic drinks that are customer favourites,” says Matt Gass, general manager of the Wooden Monkey. “The price ($5.99) of non-alcoholic cocktails such as the Power Juice may seem steep, but understandable considering the quality of their ingredients. The kelp and hemp oil help your body absorb all the nutrients in the juice as well as maximize the nutritional value from your food.”

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Variety of benefits

Still, health isn’t the only factor leading customers to the non-alcoholic beverage tap. Many customers see non-carbonated soft drinks and bottled water as an affordable option. It may not necessarily result in higher profits by driving up the check average (such as with liquor), but it may keep them coming back more frequently due to the availability of so many refreshing options.

“Many consumers want to drink more water, but they also want a great taste experience, so options are important to cater to consumer needs,” says Shirley Mukerjea, director of marketing, Gatorade, Hydration and Emerging brands at Pepsico. “For example, coconut water is an emerging trend within the hydration category, generating a surge of consumer interest for its natural hydrating qualities and refreshing taste. Although a relatively new innovation in this country, the beverage has been enjoyed for centuries where coconuts are grown.”

Owner Pradeep Sharma of Spice Up Indian Cuisine in Vancouver sees non-alcoholic beverages such as their popular masala chai tea and mango or banana lassi as excellent alternatives for designated drivers during an evening out.

“Due to increased awareness and strict drinking and driving laws, these drinks are becoming very popular,” says Sharma. “Foodservice operators can also increase their profits from non-alcoholic drinks by making more in-house products.”

Inspiring trends

For the non-carbonated beverage segment, a surge in popularity means an increase in trends such as ethnically inspired drinks, flavor innovation and sustainable packaging.

“Over the next couple of years, we’re likely to see more ethnic influences as well as experimentation with ways to differentiate drinks (such as featuring flavored ice or nontraditional glasses),” says Technomic’s Mandeltort. “We’ll see more fusion drinks as well, similar to so-called ’twisted teas,’ and more vegetable-and-fruit blends to provide both sweet and savoury notes that play off each other.”

Nestlé’s John Challinor believes consumers will continue to look for more flavor variety as well as a focus on environmentally friendly packaging.

“Innovative ideas or developments include the growth of innovative sparkling and flavour-based sub-brands and brand extensions in ever more convenient and environmentally sustainable packaging,” he says.

Improves revenues

However such trends may eventually play out, there is still much that foodservice operators can do to promote consumption of non-alcoholic beverages and ultimately to improve an establishment’s bottom line.

“Restaurant operators can increase sales of non-alcoholic drinks by properly displaying their product choices, promoting them as daily specials and educating the consumer about some of the health benefits many of these drinks offer,” says Sharma.

Matt Gass of the Wooden Money agrees: “It’s all about the servers promoting these products at the table. Engage and inform your customers about what you offer and never underestimate the power of suggestion.”

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