Restaurant Consumers Choose Tap Water Over Beverages
CHICAGO -- Restaurant-goers are choosing tap over taste according to new market research from The NPD Group that reveals tap water as one of the fastest-growing beverages ordered in U.S. restaurants. NPD's CREST service, which tracks consumer use of restaurants, found that tap water servings make up eight percent of the 50 billion beverages servings ordered.
NPD's new report "Beverages at Foodservice: Satisfying Our Thirst for Beverages" notes that the drop in revenue-generating beverages has outpaced the drop in restaurant traffic. Total beverage servings (excluding tap water) have dropped six percent over the last five years, while general restaurant traffic has only fallen one percent.
Individual tap water servings have jumped by 2.8 billion servings since 2006, according to the report, which includes a custom survey of 5,500 adults. Report data found that the decline is driven by carbonated soft drinks and brewed coffee, which constitute nearly half of all beverage servings. Meanwhile, iced tea and newer drinks such as smoothies, frozen drinks and specialty coffee drinks are growth categories.
"Although the economy and high unemployment are factors in tap water's upswing and beverage servings declines, some beverages, like carbonated soft drinks were declining prior to the recession," said Bonnie Riggs, report author and NPD restaurant industry analyst. "A key learning from this report is that much of the declines in beverage servings are tied to the price/value relationship the consumer perceives." Customers' reasons for ordering tap water included free refills and the cost of other beverages.
"Some declining beverages will fare better as the economy recovers, but beverage providers will need to address consumers' concerns and poor value perceptions to stem further losses," added Riggs. "Not all beverages are on the decline. New flavors, addressing taste interests, preparing fresh/freshly made, and creating new versions of existing beverages are factors in the beverages that are growing."