CHICAGO – Hundreds of businesses exhibited their wares at the 2014 National Restaurant Association (NRA) Show this week. Although occupying different segments of the industry, many agreed on one thing: The foodservice market is changing, and both retailers and suppliers must change to keep pace.
The coffee and tea market, in particular, is evolving. "Coffee is the new battleground for convenience stores vs. QSRs [quick-service restaurants]," Mike Keown, CEO of Farmer Bros. Co., told CSNews Online on the NRA Show expo floor. "Many c-stores are finding that they can sell a better quality coffee at a higher price and still offer great value."
Millennials are the demographic group driving the growth of coffee, iced coffee and teas, Keown said. They see coffee and tea as a healthy alternative to carbonated soft drinks (CSDs), and they care about Fair Trade, the Rainforest Alliance and other certified coffees.
"Millennials will cause profound change in hot and cold dispensed programs at c-stores," he noted.
Farmer Bros. is not the only coffee company taking a careful look at Millennials. During the NRA Show, representatives from S&D Coffee & Tea were on hand discussing its recent whitepaper, "Appealing to Young Coffee Drinkers Along Their Maturity Path." This report provides insight into how young coffee drinkers first start consuming coffee and how their preferences change over time. Young Millennials favor sweeter, specialty coffee drinks early on, but eventually graduate to traditional, hot, brewed coffee.
Along with coffee, there is innovation happening around tea. Multiple vendors displayed new and expanded hot and iced tea lines in single-serve and dispensed formats. One exhibitor speculated that green teas will see a boom over black teas in the near future.
On the CSD front, suppliers are doing their best to entice customers through the power of customization. The Coca-Cola Co. previewed a new, smaller version of its Freestyle fountain dispenser. It offers fewer combinations of soda brands and flavorings at 70-plus, but takes up less space inside a store.
Additionally, Coca-Cola announced that it will pilot a new feature on its Freestyle mobile app later this year that lets consumers create their own custom mix of sodas and flavorings, and then transmit that mix directly to a Freestyle machine to pour it immediately.
PepsiCo Inc., meanwhile, highlighted its own customization-focused fountain dispenser, the Spire, which is capable of making more than 1,000 beverage combinations in its largest format. More compact than the original Freestyle, the Spire is designed to be similar to a tablet device and lets consumers choose their flavors using a touchscreen.
Touchscreens are expected to play a bigger role in the foodservice industry's future as more vendors integrate technology into their products, and more retailers seek to make the menu selection process easier for customers.
The Broaster Co., for instance, spotlighted its SmartTouch controller technology, which allows the company's pressure fryer equipment to be more consistent and automated. Director of Marketing Chad Vendette noted that the technology can be retrofitted to existing units to cut down on costs.
Numerous blender manufacturers also displayed units with small touchscreen displays rather than traditional buttons, allowing for more setting customization in a smaller space.
NEC Display Solutions featured an array of touchscreens and other digital signage ranging from computer monitor size to full-wall multiscreens. Company representatives explained that touchscreen ordering is growing in the convenience channel as chains with the resources to do so add them to streamline the process. Digital menus are also being viewed as more practical as retailers prepare for the changes that will come when the Food and Drug Administration issues its final regulations regarding menu labeling and nutritional information.
Looking to the future, numerous NRA Show attendees agreed that smoothies are likely to see a boost in popularity with customers embracing smoothies' healthier perception and ease of consumption on the go. Several equipment suppliers featured units with automatic mixing settings aimed at c-stores and other retailers that prioritize both speed and consistency.
The 2014 NRA Show concludes Tuesday at Chicago's McCormick Place convention center.