Bottoms Up: Beverage Innovations Are Key to Achieving Growth


The past few years have been challenging for the foodservice sector in Canada. In 2015, commercial foodservice traffic was once again flat. In fact, foodservice incidences — defined as the percentage of Canadians who visit foodservice daily — have been consistently flat since 2012. While there was some dollar growth in national year-over-year sales at foodservice, the increase held steady at two per cent, in line with menu inflation.

Consumer beverage consumption at commercial foodservice has also been challenged of late. Total beverage servings have remained flat compared to last year and only half of the top 10 beverage categories are currently seeing any growth in servings at all.

Further compounding the issue is the reality that the sparkling beverage category, which includes beverages such as carbonated soft drinks, has come under significant pressure over the last few years. In 2015, for example, total servings declined two per cent year over year.

There were a few winners in 2015. For example, bottled water servings were up 8.6 per cent, juice servings grew 2.6 per cent, iced/frozen/slush coffee servings increased 11.8 per cent and milk servings were up 2.1 per cent. Some of the hardest-hit categories in 2015 were hot tea and alcoholic beverages, which saw declines of 10.8 per cent and 5.4 per cent respectively. The latter is a considerable concern for FSR operators who rely heavily on alcoholic beverage servings to help drive average eater check and improve overall margins. Adding to these declines is the fact that tap-water servings were up 2.5 per cent in 2015.

While major trends in foodservice and beverage consumption tend to be national, there are some interesting regional patterns to consider from province to province. For example, the landscape in Ontario has seen an upturn in the latest year, with industry dollars increasing at a rate of four per cent, ahead of all other regional year-over-year trends. In fact, sparkling category declines are seen across all regions, with the exception of Ontario where sodas, soft drinks and other CSDs are up two per cent on the year.

However, there are several growing/emerging beverage categories worth keeping an eye on in 2016. For example, shakes, malts and floats have seen strong growth year-over-year and are currently up 29 per cent compared to last year. Furthermore, frozen/slushy/iced coffee has also performed well, up 16 per cent. Lastly, carbonated bottled water has seen some strong growth over the last year, and is currently up eight per cent.

Opportunity still exists for savvy operators who are willing to implement new and innovative beverage offerings. Increasing variety and focusing on new, unique beverages is especially important in FSR and QSR, where alcohol has long been relied upon to drive up average eater check. As alcohol consumption at foodservice continues to decline, beverage innovation can play a key role in helping to achieve growth in a traffic-challenged market.

Fisher can be reached at (416) 489-6996, at [email protected] or at

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