BREAKING NEWS: Fast-food giants Taco Bell and Chick-fil-A are launching new beverage-centric concepts to take on Starbucks, intensifying the battle for America’s beverage market. Live Más Café and Daybright aim to capture the growing trend of colorful, customizable drinks that appeal to younger consumers, particularly Gen Z.
The urgency of this competition comes as Starbucks faces declining sales, reporting its sixth consecutive quarter of same-store sales drops. Meanwhile, Dutch Bros, a direct competitor, has seen a 4.7% increase in same-store sales during the first quarter of 2025, highlighting a shifting consumer landscape.
Chick-fil-A plans to open its first Daybright location in Atlanta later this year, while Taco Bell targets $5 billion in beverage sales by 2030, planning to open 30 new locations across Southern California and Texas by fall 2025. Taco Bell has already established five Live Más Café locations in California, emphasizing that drinks are now seen as part of a lifestyle, not just refreshment.
“Live Más Café was created from the insight that fans, especially Gen Z, see beverages as more than just refreshment; they’re part of a lifestyle and daily ritual,” a spokesperson for Taco Bell stated. This shift signals a more significant trend in the dining industry, where chains like Panda Express, KFC, and Burger King are also expanding their drink menus to appeal to value-conscious consumers.
The beverage battle is set to escalate, as Starbucks’ longstanding dominance in the $100 billion beverage market is challenged by these new concepts. Starbucks has struggled with its value proposition amid rising coffee costs, prompting CEO Brian Niccol to initiate the “Back to Starbucks” initiative to revitalize the brand.
Analysts express mixed feelings about the potential success of these new beverage-focused concepts. “These smaller concepts focused on drinks are creating a space for consumers who are very value-conscious,” said Michael Della Penna, chief strategy officer at InMarket. He adds that these cafes offer a relaxed environment for socializing or working without breaking the bank.
Despite this challenge, Starbucks continues to innovate, recently launching new products like protein cold foams and maintaining strong engagement with its customer base, particularly among Gen Z and millennials. A Starbucks spokesperson reported that their customer value perception scores are nearing two-year highs, driven by these younger demographics.
However, there are risks involved. Analysts warn that Starbucks could be distracted by the buzz around new offerings and may struggle with complex drinks, a category where they have historically faced challenges. Asit Sharma from the Motley Fool emphasizes that while Starbucks has the capability to match its competitors’ offerings, it must tread carefully to avoid pitfalls.
As the beverage wars heat up, the question remains: Can Taco Bell and Chick-fil-A replicate Starbucks’ successful formula, or will they simply create noise without making a significant impact?
Stay tuned for developments as this new chapter in the beverage market unfolds. Have a tip? Contact this reporter at Katherine Tangalakis-Lippert via email at [email protected].
