Why Taco Bell Is Betting On Drinks After McDonald’s Shut Down CosMc’s

Business Strategy & Expansion - Taco Bell is remodeling locations to include "Live Mas Cafe" to capitalize on the popularity of specialty coffees and customizable drinks [1] - The company aims for beverages to become a $5 billion business by 2030, targeting younger consumers and Gen Z [2] - Taco Bell is scaling innovation from Live Mas Cafe to all restaurants, exemplified by the rollout of Aguas Frescas nationwide [7][8] - The company hopes to reach $3 million in average sales per store by 2030, with beverages playing a significant role [27] Market Performance & Trends - Taco Bell's first Live Mas Cafe in Chula Vista, California, exceeded initial sales forecasts by four times [4] - Taco Bell reports selling over 900 beverages per day, with a third of orders including a specialty drink [5] - In 2025, Taco Bell sold 600 million beverages, up 16% from 2024 [5] - Taco Bell has raised prices about 75% since 2019, yet maintains a strong value perception among consumers making less than $50,000 [17][18] - Despite innovation and value, Taco Bell lost over 4% of Mexican quick-service market share between 2019 and 2024 [19] Industry Context & Competition - The number of drinks offered by the top 500 chains has increased by over 9% in one year, highlighting the beverage trend in the restaurant industry [10] - Other chains like Sonic, Jollibee, Whataburger, and Wendy's are also expanding drink offerings [11] - Dutch Bros is seen as a leader in beverage trends, influencing other companies' practices [11] - Caffeine consumption is growing in the US, driving the demand for beverages in limited-service restaurants [13]