Most consumers’ lives look very different now than they did in April 2020, but many businesses continue to feel the pandemic’s impact on sales. Coca-Cola, for one, has yet to see its bar and restaurant business return to pre-outbreak levels.
Coca-Cola Chairman and CEO James Quincey explained to analysts on a Monday (April 25) call discussing the company’s first-quarter 2022 earnings results how the company’s global foodservice business continues to be impacted by the pandemic.
“Whilst we have recovered to our 2019 levels, the away-from-home channels have not yet fully recovered,” he said. “We’ve lost outlets in the course of the pandemic. That’s true of the away-from-home, and that’s also true of the fragmented grocery trade.”
However, in the face of these challenges, some channels have been performing disproportionately well. For instance, digital ordering and drive-thru pickup have been leading the way, driving the foodservice business’s recovery.
“There is a distinction by sub-channel with away-from-home,” said Quincey. “QSR [quick-service restaurant] has done well, particularly those with digital and drive-through.”
According to data from PYMNTS’ 2022 Restaurant Friction Index, created in collaboration with Paytronix, 77% of restaurants offer the ability to order online. The study, which drew from a survey of more than 500 managers of QSRs and full-service restaurants (FSRs) across the United States, also found that about half of all restaurants offer drive-thru pickup, and that share jumps to two-thirds when it comes to QSRs specifically.
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These features can go a long way toward driving foodservice spending. The index, which also drew from an October survey of more than 2,100 U.S. adults, found that 40% of consumers said that online ordering options would encourage them to purchase from restaurants, and 35% said the same of the ability to pick up orders at the drive-thru.
Moreover, research from PYMNTS’ April study “The Digital Divide: The Key Factors That Drive Restaurant Choice,” also created in collaboration with Paytronix, found that 23% of consumers said pickup features are the most important technology in encouraging them to order from a given restaurant. Plus, another 21% said the same of ordering features.
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Another technology boosting Coca-Cola’s foodservice business in the quarter was the Costa Coffee brand’s Costa Express machines, self-service coffee-vending machines.
“The Express machines, the vending digital barista machine, had a very strong quarter with transactions growing strongly,” Quincey said. “And now that reopenings have occurred, we’re starting to see the focus on placement of new machines across Europe and the Middle East, and also in China. … The Express machine is still doing very well.”
The initiative comes at a time when cafes (and all other kinds of restaurants) are facing a challenging labor market, with wage expectations increasing. Self-service technologies enable the brand to bring in sales without the typical staffing costs.
On the company’s previous earnings call, John Murphy, Coca-Cola’s executive vice president and chief financial officer, noted that Costa “install[ed] thousands of new [Express] machines” in 2021.
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