Taco Bell Brews Up $5 Billion Beverage Goal with Live Más café Expansion
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Taco Bell is aggressively expanding its beverage offerings with the rollout of its Live Más café concept, aiming to generate $5 billion in annual drink sales by 2030. The Mexican-inspired chain is betting big on specialty drinks to attract a younger demographic and drive profitability,a strategy gaining traction across the fast-food industry.
A New Café Experience Within Existing Restaurants
Unveiled in December, the first Live Más Café opened in Chula Vista, California, followed by a second location near the University of California, Irvine. Unlike McDonald’s now-discontinued CosMc’s spinoff, which operated as standalone stores, Taco Bell’s café is integrated within existing Taco Bell restaurants.Customers place orders at kiosks and observe “bellristas” crafting their beverages behind a dedicated counter, creating a visually engaging experience.
The beverage menu boasts a diverse range of options, from blended coffees to lemonade-based drinks. Taco Bell has already seen significant success, selling over 600 million beverages this year – a 16% increase year-over-year. More than 60% of all orders now include a drink, demonstrating a shift in consumer behavior.
Beverages: A Broader Strategy for Growth
The Live Más Café is also serving as a test market for Taco Bell,providing valuable data on consumer preferences and potential menu expansions. “It also acts a little bit as a test market where they can get some more real-time data. Which combos do people do the most?” noted a trendologist at Datassential. “Which customizations matter the most?”
The success of the agua frescas, initially launched within the Live Más Café, led to a nationwide rollout. Furthermore, the coffee offerings are part of a larger plan to revitalize Taco Bell’s breakfast menu. The chain is also leveraging its cantina format,featuring custom menus and alcoholic beverages,to attract customers seeking a more leisurely dining experience.
A Competitive Landscape and Industry-Wide Trend
Taco Bell isn’t alone in its pursuit of beverage dominance. Shake Shack is experimenting with bubble tea-inspired lemonade, Panera Bread is testing frescas and energy refreshers, and chick-fil-A is planning a beverage-focused restaurant called Daybright. Even McDonald’s, after winding down CosMc’s, continued to test new coffee drinks and sodas.
The number of beverages sold by the top 500 chains has increased by over 9% in the last year, according to Technomic. this surge is driven by Generation Z and millennials, who prioritize experimentation and novelty in their dining experiences. “Among younger consumers, in particular, we see that fast-food dining is just as much about experimentation and novelty as it is about indulgence,” said a foodservice analyst for Mintel.
Taco Bell’s focus on innovation and appealing to younger consumers is proving accomplished,with the company consistently outperforming its sister brands,KFC and Pizza Hut,within the Yum Brands portfolio. A senior official stated that Taco Bell represents a “significant amount of Yum’s operating profit.” Yum Brands is scheduled to report its third-quarter earnings on November 4.
Watch the video to learn more about why Taco Bell is betting on drinks.
