The Fast-Food Industry Wants to Be the Fast-Drinks Industry, Too
Iced drinks topped with cold foam and added energy shots and fruit flavors have hooked high-school students, social-media influencers and now, some of the world’s biggest fast-food chains. McDonald’s this month launched CosMc’s, a new takeout-oriented restaurant concept heavy on customizable drinks like Churro Frappés and Pomegranate Hibiscus Slush. Taco Bell in December started testing blended iced coffee with flavors like Mexican Chocolate, along with shakes topped with cold foam and churro crumbles.
Jack in the Box boasted that it is one of the first fast-food chains to serve drinks with tapioca pearls, or boba, with a national launch in November. Chains known for burgers and burritos have set their sights on consumers’ willingness to spend on what goes into their cups, which can be more lucrative than fast food. Pink Drink, Iced Shaken Espresso and other novelty beverages have helped to deliver record sales for Starbucks in recent years, with syrups, foams and other drink additions generating $1 billion in annual U.S.
sales alone. Dutch Bros, 7 Brew and other new chains are also riding the beverage wave with cold brew and vibrantly colored energy drinks, along with higher profit margins than many fast-food chains. “It’s a huge market for sure," McDonald’s Chief Executive Chris Kempczinski said.
McDonald’s currently does business in beverage and snacks, but it could do more given the size of the opportunity, he said. Gen Z, typically defined as those born between 1997 and 2012, are more interested in new drinks than other generations, according to companies and surveys. An estimated 62% of Gen Z consumers reported trying a new beverage in the past month, outpacing their tendency to sample new packaged-goods products,
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