Coca-Cola's secret labs aim to automate dirty soda and refreshers

Restaurants have increasingly used handcrafted drinks like refreshers and iced coffee to drive traffic and sales, even as overall diner spending has tightened. In the second quarter of this year, beverage servings at restaurants grew faster than food-only or food-with-beverage servings, according to Circana data. David Portalatin, senior vice president and food service industry advisor at Circana, told CNBC that these drinks often offer consumers a break, energy or protein, or a treat at a lower price point.

Longtime Coca-Cola customers from McDonald's to Wendy's have expanded their beverage menus to respond to this shift and boost margins, the report said. Megan Tallman, Coke's vice president of dispensed equipment and innovation for North America, said it is the company's job to provide unique experiences and beverages because consumers now expect them. She noted that Generation Z is willing to pay $10 for a craveable drink that they can show on Instagram or TikTok, which helps customers drive margin and beverage attachment.

This July marked the 17th anniversary of Coca-Cola's Freestyle dispenser. Tallman said Freestyle is more relevant today than it was a decade ago, thanks to its dozens of flavors. Since its launch, Freestyle has dispensed more than 67 billion 8-ounce servings, and the equipment's real-time data collection has allowed Coke to track trends.

Inside the company's Equipment Innovation Center in Atlanta, a large screen shows real-time data on what Freestyle drinks are trending, by time and location. For example, AHA sparkling water is trending up at office buildings and hospitals, according to the report. Insights from the dispensers also help Coca-Cola launch new drinks in grocery stores, such as the limited-time Coca-Cola Orange Cream.

Coke has further ideas, including the Freestyle Mini, a smaller machine initially launched in Europe for bars and restaurants with limited space. It holds up to 16 drink options, more than double a traditional soda gun. Coke unveiled the Mini at the National Restaurant Association Show in Chicago this spring but has not yet sold it to U.S. customers.

To automate dirty soda, Coca-Cola has created a prototype that adds a dairy module to the classic Freestyle dispenser. The dirty soda trend was popularized by Utah-based chain Swig, and has spread from KFC restaurants to grocery store shelves. Matthew Greer told CNBC: "Gen Z is the first generation raised to believe that nothing you consume is neutral, so everything is either helping you or costing you." The report also noted that research firm Technomic tracks more than 100 specialty beverage chains with more than 41,000 U.S. locations.