As McDonald’s and other fast-food chains wrestle with rising costs, shifting consumer tastes, and sagging foot traffic, they’re turning their attention to an often-overlooked profit engine: revenue growth through beverages. Barron’s recently detailed the strategy.
High-margin, high-appeal drinks are emerging as a strategic focal point for brands like McDonald’s, Wendy’s, Burger King, and Taco Bell. These beverages—ranging from cold brews and fruit refreshers to crafted sodas and energy drinks—offer both operational simplicity and strong profit potential. With their lean preparation processes and vivid visuals, these drinks tap into Gen Z’s appetite for share-worthy, indulgent refreshment. 1.
Why Beverages?
Not only are drinks easier and faster to make than a full meal, but they also have higher margins—an appealing proposition for chains under pressure from inflation and operational complexity. McDonald’s, for example, is piloting new cold coffees, fruity refreshers, crafted sodas, and energy drinks across ~500 U.S. restaurants starting in September.. The intent? Create “new reasons to visit, new ways to enjoy, and new moments to savor,” as McDonald’s U.S. marketing chief Alyssa Buetikofer puts it. 1.
Bold Moves Across the Board
- Taco Bell is expanding its Live Más Café concept, which debuted in California offering over 30 custom drinks—from caffeinated aguas frescas to churro‑inspired frappes. A test location already saw a 40% sales lift, prompting plans for 30 more by year’s end. 1.
- Wendy’s has introduced cold brew with cold foam and fruit‑flavored energy drinks, aiming to energize breakfast and snacking dayparts. 1.
- Burger King rolled out iced coffee topped with flavored cold foam and refreshing lemonades this summer.1.
As the Barron’s article puts it:
“There is plenty of room for growth. Many customers skip drinks when placing meal orders, so it’s an easy boost if they are enticed to add one. Bold flavors and attractive visuals could fuel spontaneous purchases.” 1.
The Risks Beneath the Refreshment
While the beverage pivot feels promising, analysts urge caution. Novel drinks can attract attention—but that buzz may fade, especially during tight economic times, when customers might skip the indulgence. Operational complexity and overextension also pose risks. Too many options can slow drive‑thrus and frustrate staff—no chain wants to lose customers chasing a drink. As Peter Saleh of BTIG warns, “The risk is that you mess up operations and slow down throughput.” And Neuberger Berman’s Kevin McCarthy notes a sobering truth: “If consumers are getting pinched, it is a challenging piece of the overall equation for fast food.” 1.
What It All Means
Fast-food chains are exploring a smart pivot—making drinks central to profit growth. The beverage innovation strategy:
- Addresses margin pressure, offering simpler, higher-profit items
- Appeals to Gen Z, who value bold, visual, customizable beverages
- Opens new dayparts, from morning pick-me-ups to afternoon cool-downs
But success hinges on balance. Simplified execution, smart product selection, and avoiding brand dilution are key. If done well, this trend of growth through beverages might just refresh the way—and why—customers visit their stores.
1. Barron’s
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