The Itty Bitty Beverage

The year was 2014. The beverage was soft drinks. The catalysts were sugar reduction, portion control (consumer) and higher profit margins (brand). The innovators? Coca-Cola and Pepsico, who drove significant unit volume growth by creating single-serve “minis”. This thoughtful play by beverage behemoths “enabled consumers to better measure and regulate their soft drink and caloric intake” all while paying a higher unit price.[1] The move was so successful, for example, that 40% of Coca-Cola’s soft drink brands now come in smaller serving sizes.[2]

Over the past few years, we’ve seen other beverages undergo a similar “shrink”. First, there were wellness-driven “shots” – tiny, two or three-sip elixirs meant to provide concentrated nutrition – with “higher amounts of vitamins, minerals and antioxidants.”[3] Here again, Pepsico stays the course with smaller drinks via an alliance with Ocean Spray and the launch of the Atoka line, “herbalist craft beverages” in the form of tonics and shots.[4]

But where else is this tiny beverage trend playing out? Here are some intriguing examples:

Wine. Specifically, the “rejuvenation of the 375-milliliter bottle”, roughly the height of a wine glass with growth driven by tastings…especially the virtual kind…as Zoom users at home don’t want to open 3–4 full-sized bottles in order to participate.[5]

image of a 375ml wine bottle

Cocktails. Tiny spirits providing versatility and experimentation, allowing bartenders to create separate mini cocktail menus and enabling patrons to either sample more (e.g., flights) or imbibe less (a little taste for the designated driver).[6]

Notpla Beverage Blob. A half dollar-sized, edible (or compostable) sachet that breaks open inside the mouth, releasing its liquid contents. The experimental packaging has been tested by Glenlivet via a “glassless cocktail” and with water along marathon routes.[7]

Packaging samples from notpla.com
Packaging samples from notpla.com

Origami Bottle. Not a drink, per se, but a drinking vessel – one that collapses small enough to fit inside a pocket between uses.[8]

To us, this suggests an opportunity to examine not just what the beverage is, but how that beverage could be served in new ways to drive growth. While we’ve focused today on ever smaller drink sizes, we believe the key is “right-sizing”, decreasing or even increasing pack size in response to actual consumption patterns, demographic signposts and other trends.

[1] “Smaller is Better as Global Packaging Growth is Shaped by Variation in Pack Sizes”, Euromonitor, 2019
[2] Coca-Colacompany.com
[3] “I Drank Wellness Shots for a Week and It Was a Wild Ride”, Bon Appetit, 7/24/18
[4] “Ocean Spray focusing on agility, innovation during COVID-19”, Food Business News, 5/07/20
[5] “The Shutdowns Reveal Big Possibilities for Small-Format Bottles”, Wine Enthusiast, 6/11/20
[6] “Tiny cocktails – now? Here’s why they’re trending”, CNBC, 4/16/20
[7] “Notpla’s edible blob is a compostable water bottle”, Fast Company, 2/18/20
[8] “This reusable ‘Origami Bottle’ folds to fit in your pocket”, Fast company, 6/26/20

Return of the Automat

Understandably, a restaurant industry reeling from a pandemic tsunami, would be fixated on things like streamlining menus, profitability with less tables in service, socially distant seating configurations, a hygienic environment that protects both staff and patrons, and maintaining some semblance of ambience. These are very real, timely and important challenges to overcome in the short-term. But what about mid to longer-term timeframes?

What IF, we stepped back and completely redefined the problem-to-solve not based on adapting the current restaurant model, but by creating an entirely new model? As one chef put it, “doing the same old same old will not work now.”[1] If investing in a dining room redesign and increasing revenue-per seat averages are difficult based on funds, indefinite social distancing norms and patron desire to avoid crowds…what if we name “seating” the problem and eliminate it altogether? What if ALL employees were back of house? What if instead of striking the right balance between on and off-premise dining we went ‘all in’ on the latter? What if instead of abandoning self-serve, we found a way to make it work in the ‘next normal’?

Our inspiration comes from a convergence of thought, a mash-up of the following:

  • Reputable analysts, who claim “restaurants with high off-premise sales prior to the crisis are faring better” and are urging operators to “consider investing in automation to increase productivity and provide contactless solutions.”[2]
  • Two of our recent Thought For Food blog articles – Good to Go (April) and Automation Nation (June)
  • The 8 in 10 U.S. diners who claim “restaurant cleanliness and food safety will matter even more”, 7 in 10 who vow to continue avoiding crowded places and 4 in 10 who plan to “maintain their current use of takeout and social distancing”[3]
  • The 5 in 10 U.S. diners willing to enter into a restaurant to pick up takeout and 6 in 10 who lament “having to plan ahead whenever I want to eat out now”[4]
  • The post-pandemic consumer who is expected to emerge with “a heightened demand for convenience” and require product served ‘at arms length’[5]
  • A really cool show on Netflix, called “History 101”

What IF we resurrected and modernized the Automat?

Quisisana, born in Germany in 1895, was the world’s first automat – a quick-serve concept where food and drinks were served vending-machine style, backloaded in real-time by operators in a kitchen behind the customer’s coin-loaded interface.[6] The convenient format expanded across the world, and to our shores in NYC in 1912, with the last U.S. version – Eatsa – closing prematurely in 2019.[7] It exists today in modified forms in a smattering of countries but the latest incarnation from Toronto – Box’d – is creating buzz. The fully-automated Box’d is well-positioned for the future, complete with digital ordering, a kitchen staff visible through a glass window, and secure and sanitized cubbies that customers use QR codes to access. What’s even better? Founder Mohamad Fakih claims “the cubby system increases orders and sales, relies on only 1 front of house concierge and employs more cooks in the kitchen”[8]

Despite all of these pandemic-aligned features, we believe there is even more room to push the Automat forward and recommend considering new models that:

  • Eliminate dining spaces, focusing on flexibility and capability in the kitchen and minimizing contact risk
  • Make a full commitment to the contactless experience via automatic doors
  • Feature infrared, walk-through temperature screening, like the Narita airport in Tokyo
  • Elevate the experience via continually rotating menus (vs. the static menus within QSR), creating reasons to come back often

When rethinking restaurant business models, we wholeheartedly agree that “technology alone won’t build restaurants in the future, but new and thoughtful technology can make them stronger”[9] and find the Automat concept, inspired by modern day needs, full of potential.

[1] “America’s eateries: The long road ahead (Part one)”, meatingplace.com, 5/22/20
[2] “How restaurants can thrive in the next normal”, McKinsey & Company, 5/20
[3] “When Covid-19 ends, here’s how restaurants will win”, QSR, 4/20
[4] “Covid-19: Pain Points”, Datassentials, 5/29/20
[5] “What will the restaurant industry look like after coronavirus?”, Nation’s Restaurant News, 4/03/20
[6] Wikipedia
[7] “Bring Back the Automat”, Treehugger, 6/15/20
[8] “This Automated Restaurant Launched Mid-Pandemic. Is This The Future of Restaurants?”, Forbes, 6/24/20
[9] “National Restaurant Association: 75% of restaurant operators don’t expect to turn a profit in the near future”, Nation’s Restaurant News, 6/15/20

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

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