Organic’s Next Frontier
Organic sodas, wines, and cocktails are gaining traction in the restaurant industry.
Take a look at any restaurant-trends list and chances are you’ll find “organic” sitting at—or near—the top. And for good reason: the organic food market is projected to reach sales of more than $45 billion in 2015 alone, according to an industry report published by TechSci Research. But it’s not just organic foods that are taking over the industry; organic beverages are picking up steam, too, as yet another outcropping of growth in the “better-for-you” segment.
A May 2015 study from Mintel shows that more than 70 percent of consumers believe organic products are healthier for them, and nearly three in five Millennials reported purchasing an organic food or beverage product in the last three months. What’s more, 20 percent of Millennials say organic products make up at least 75 percent of their total food and beverage spending.
Perhaps that’s why nearly 12 percent of restaurants now menu organic beverages—a figure that’s doubled over the past four years, according to Dave Jenkins, managing director at market research firm Datassential. He adds that much of that growth has come in the categories of juice, liquor, and tea. Leading quick-serve chain Wendy’s, for example, teamed up with organic tea company Honest Tea earlier this year to offer customers an Honest Tropical Green Tea option nationwide.
At Origami Market, all beverages—from juices and wines to sake and beer—are organic, with the exception of bottled water and Coke Zero. Owner Kash Feng says this was a conscious decision in an effort to align with the San Francisco establishment’s organic and sustainable mission.
A small but growing number of brands are also bringing organic beverages into their units via the first organic soda machine on the market, a freestanding unit from beverage equipment manufacturer Argosy Foodservice that offers eight flavors of soda from organic soda brand Tractor Soda.
Tractor Soda’s 20-plus sodas—including flavors like cucumber and lemongrass—use all-natural, organic, chemical- and preservative-free ingredients, such as turmeric, beets, and red currant.
Organic sandwich concept Whole Subs in Atlanta and Town Hall in Cleveland, Ohio, are just two brands that have already begun using the soda machine, and founder Travis Potter says Tractor Soda is in the midst of completing a deal with a 2,000-unit brand to offer their products in its restaurants.
Recently, the company also introduced organic slushies, with flavors like root beer, blood orange, and strawberry rhubarb. While they can be served as non-alcoholic options, Potter expects many gastropubs and restaurants to add in organic liquors to create alcoholic slushies, like a frozen Moscow Mule using Tractor Soda’s ginger slushy.
Despite the fact that customers are actively seeking out organic beverages, there are some challenges with offering these beverage options. First and foremost: organic products tend to cost more—for customers, restaurateurs, and beverage producers. Feng from Origami Market says his restaurant’s organic beverages run anywhere from 50 cents to $1.50 more than a non-organic option.
“Consumers are willing to pay a little more for something that is high quality and better for you, but not that much more,” says restaurant industry analyst for The NPD Group, Bonnie Riggs.
Organic products are also expensive for restaurants to source and for beverage brands to make. That’s why some producers in the beverage and cocktail mixer space are introducing products that aren’t FDA-certified organic, but that use organic ingredients, says Tad Carducci, mixologist and beverage consultant at Tippling Bros. “That seems to be almost as desirable or acceptable by consumers,” he says. “And that’s another way that the costs can be kept down to some degree.”
Sourcing organic beverages is also difficult in itself, as ingredients are less readily available and more challenging to find than non-organic ingredients, Carducci says.
Whether organic in part or on the whole, many industry experts agree that organic beverages will play a bigger role on restaurants’ menus in the future.
“It’s just a matter of time before the market shifts toward this sort of offering, because consumers are looking for something out of the norm,” says Raphael Dormal, CEO of Argosy Foodservice, adding that he can envision a major player like Coke or Pepsi buying a small organic brand to bring these products to consumers everywhere. “It’s just a matter of time before a major chain like Panera or Chipotle rolls them out.”
And, in fact, Chiptole began testing an organically sweetened root beer at some locations this summer, proving that what has long been predicted as a trend of the future is officially hitting the mainstream and joining the ranks as another item that’s not only valued, but expected.