Cheers! Young willing to pay more for healthy drinks

As the restaurant sector shifts back into high gear after COVID-19 disruption, it may benefit greatly by catering to younger health-conscious consumers, as new research shows that more than a quarter of customers would be happy to pay premium prices for healthier products.

The study, conducted by University of South AustraliaFlinders University and University of Otago researchers, showed that 27 per cent of consumers would pay nearly double the price for ‘healthy’ drinks that contain low/no sugar, natural/no additives, or vitamins and minerals.

In a study of more than 1000 consumers from Australia and NZ, researchers also found that younger consumers (aged 18-24 years) were more likely than older diners to be interested in healthy drinks. Those who ate out more often are more willing to pay a larger premium for having their requirements met.

It’s a welcome finding for a sector that has been hit hard by the pandemic, but it’s also a step in the right direction in terms of public health, says lead researcher UniSA’s Associate Professor Rob Hallak.

“As COVID-19 restrictions ease, many people are re-embracing the café lifestyle. But hand in hand with increased patronage, comes a long-standing criticism that the sector provides food and drinks that are too high in fat, salt, and sugar,” he says.

“While nutritional content in foods has gradually improved over the years, drinks that are high in sugar and calories are still prevalent in the restaurant and café sector.

“Our research shows that there’s a relatively untapped market of younger, health-conscious consumers, particularly in relation to drinks.

“By tackling the beverage ‘health dollar’, the sector would not only benefit from the profits, but also demonstrate proactive support for Australia’s new National Obesity Strategy announced earlier this year.”

In Australia, obesity contributes to a range of chronic health conditions including cardiovascular disease and Type 2 diabetes. Two in three Australian adults (67 per cent) and one in four children (25 per cent) are currently considered overweight or obese. In New Zealand, obesity affects one in three adults (35 per cent) and one in eight children (13 per cent).

In this study more than 1000 consumers from Australia and NZ were surveyed, revealing that those who ate out at least once per week were inclined to pay more for healthy drinks, and those who ate out more often were willing to pay a larger premium.

Associate Professor Ilke Onur from Flinders University says evidence of strong consumer demand should drive innovation and product development.

“Our study highlights the need for a collaborative effort among government, beverage manufacturers, and the hospitality sector in increasing the variety and supply of healthy product options,” says Associate Professor Onur from the College of Business, Government and Law.

“By developing new products that are healthy, taste good, and reasonably priced, the take-away and dine-in restaurants could reinvigorate the sector.

“Hospitality firms and beverage manufacturers are dealing with well-informed consumers who read product labels and assess ingredients and additives. So, the healthiness of the product must be scientifically supported and validated by reputable bodies.”

Co-researcher Dr Craig Lee from the University of Otago agrees. “Drink sales represent up to 40 per cent of food service revenues. By improving the healthiness of dining out (or eating in) across the entire menu, including drinks, restaurants could really capitalise on this opportunity,” Dr Lee says.

“It will be interesting to see who moves first in this space; the market is right there for the taking.”

  • This research focuses on consumers purchasing ‘healthy’ drinks when dining out or buying from hospitality businesses – restaurants, pubs, cafes (but not from supermarkets).
  • In Australia, dining out (or ordering in) accounts for 27 per cent of weekly household food and drink expenditure, amounting to more than $45 billion per year or nearly $100 per household per week. In the UK, 20 per cent of people eat out at least weekly and, in the US, more household food expenditure goes to eating away from home than at home.
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