The Great Beverage Reset: How Operators Are Rethinking Pouring Rights to Protect Profitability

Few areas of a restaurant’s P&L might be as under-appreciated, or as powerful, as the beverage program. The right deal can quietly add hundreds of basis points of margin. The wrong one can drain profit in plain sight.

With inflation, shifting consumer preferences, and brand realignment reshaping the market, having the right beverage strategy has moved from an operational afterthought to a strategic imperative.

A Market in Motion

Ten years ago, the beverage hierarchy looked unshakable: Coca-Cola and Pepsi dominated the fountain, Dr Pepper trailed at a distant third, and syrup prices crept upward predictably. 

Today the board has been flipped. Dr Pepper has overtaken Pepsi as the number-two soft drink, and Sprite has climbed into the top three, according to data from Beverage Digest. 

The fastest-growing beverages now aren’t colas at all, but rather energy drinks, functional waters, low- or no-sugar refreshers, and other “better-for-you” offerings that command higher margins but require different distribution and marketing models.

And over the last five  years, national-account syrup prices have risen roughly 25 percent, even as overall soda consumption has fallen by nearly four percent over the same period!

For operators, that means that the old 10-year, fountain-only, volume-based “set it and forget it” beverage contract no longer makes sense.

Rising Pressure on Profitability

Several macro forces are converging to reshape beverage economics:

• Cost inflation in sugar, packaging, and transportation, as well as disruption caused by tariffs, continues to squeeze both manufacturers and operators.
• Public-health regulation—from city soda taxes to new sugar-labeling requirements—adds complexity and compliance costs.
• Traffic recovery remains uneven, with many markets still below 2019 levels and consumers fatigued over higher prices.
• Consumer expectations are evolving, favoring variety, customization, and authenticity over brand loyalty.

These pressures make it harder to rely on traditional rebate-heavy contracts built around guaranteed volume. The economics have shifted from pure throughput to a margin-mix game, where flexibility and optionality matter as much as headline rebates.

From Static to Smart Contracts

The beverage contracts that once optimized for simplicity now need to balance risk and responsiveness. Operators across quick-service, casual, and institutional settings would be wise to explore a more sophisticated playbook built on three principles:

Flexibility Over Fixed Volume

Rigid minimums and “all-or-nothing” rebate thresholds made sense when traffic was predictable. Today they often penalize operators for volatility outside their control. Progressive agreements might instead use tiered volume bands, including lower floors with proportional incentives and automatic review points if sales drop below defined benchmarks as well as incentives for suppliers if they can meaningfully fight the declining soda trend and boost incidence.

That keeps suppliers invested while preventing operators from over-committing in uncertain demand environments.

SKU and Category Agility

The days of locking in a static fountain lineup for a decade are over. Modern operators should consider including scheduled SKU reviews, allowing operators to trial emerging products, including energy, hydration, and prebiotic sodas, without violating exclusivity.

This approach lets operators follow consumer trends while protecting the integrity of their core partnership.

Shared Data and Marketing Investment

Beverage suppliers and operators share a common goal: higher beverage incidence and attachment rates. Operators should investigate negotiating joint marketing funds, loyalty integrations, and data sharing to track performance. When incentives are aligned around growth rather than sheer volume, both parties win.

Practical Strategies for Today’s Negotiations

When it’s time to renew or renegotiate, several tactical moves can strengthen your position without undermining partnership:

1. Build Downside Protection

Replace hard guarantees with graduated breakpoints that flex with traffic. Pair those with renegotiation triggers tied to measurable changes—such as inflation indices, regional traffic data, or unit openings and closures.

2. Add Cost-Escalation Caps

With commodities still volatile, contracts should define how input costs translate into pricing adjustments. For example: suppliers may be allowed to increase prices, but only at a rate which is tied to objective market indices. This keeps pricing transparent and prevents runaway mid-term hikes.

3. Preserve Category Freedom

Avoid language that prevents you from exploring non-carbonated or functional beverage partnerships. Operators should consider limiting exclusivity to traditional fountain soft drinks while retaining flexibility for bottled energy, hydration, or seasonal craft options.

4. Leverage the Premiumization Trend

Premium doesn’t just mean “expensive”—it means experiential. Customizable soda bars, “dirty soda” stations, and flavor-add-ins create theater and social content value. These small investments raise average checks and improve guest perception, often with negligible incremental cost. Restaurant operators should build in the ability to trial with LTO’s and A/B testing.

5. Insist on Transparency

Even limited audit or benchmarking rights can help ensure your pricing and rebate structure remain competitive. Data drives confidence, and confidence supports longer-term partnerships.

6. Stage Commitments for New Sites

Pilot new or uncertain brands and equipment under shorter-term agreements with lighter commitments. Expand to full-scale deals once sales data supports the investment.

7. Tie Incentives to Activation, Not Just Output

Volume-based bonuses reward throughput, but marketing participation drives awareness. Negotiate for co-funded promotions, digital rewards tie-ins, or limited-time flavor activations that lift both beverage and food sales.

8. Negotiate Ownership of Equipment

Whenever possible, operators should consider negotiating agreements that allow them to own or retain beverage equipment at the end of the contract term. Owning the equipment outright reduces long-term dependency on suppliers, enables flexibility in future partnerships, and helps preserve operational control to trial new products and switch suppliers more easily.

The Bigger Picture: Why It Matters

Amid rising wages and food inflation, beverages remain one of the few controllable levers of restaurant profitability. Each point of margin improvement compounds over years and locations.

But beyond profit, a thoughtful beverage program signals brand relevance. Guests increasingly notice what’s on tap and in the cooler, and whether it aligns with their health goals, social values, or simply their curiosity for new flavors. The beverage lineup has become a reflection of how well a restaurant understands its guests.

Suppliers see the same writing on the wall. Coca-Cola’s push into fairlife and BODYARMOR, PepsiCo’s investments in Poppi and Celsius, and Keurig Dr Pepper’s rapidly expanding energy portfolio all underscore a strategic pivot toward a post-cola future. The next generation of pouring-rights agreements will be built not only on syrup volumes but on shared data, adaptability, and innovation incentives.

Don’t Just Renew—Redesign

Too often, beverage contracts roll over unchanged because “they’ve always worked.” But a deal written for the consumption habits of 2015 may not serve the realities of 2025.

Ask hard questions before you sign:

• Does this agreement still reflect our traffic patterns and category mix?
• Are incentives aligned with where growth is actually happening?
• Do we have the flexibility to evolve with consumer taste?

The goal isn’t to squeeze suppliers, but rather to create a structure that rewards both sides for resilience and responsiveness. Operators who rethink rather than renew their beverage agreements can create quiet engines of profit and brand differentiation.