Fast-food giants bet big on beverages

If your last McDonald’s run felt more like a Starbucks order, that wasn’t an accident.

Beverages are becoming one of the most profitable parts of the restaurant business, as consumers increasingly look for small, affordable treats instead of full meals.

The fast-food industry is taking notice. In recent weeks, several major chains have rolled out new drink-heavy strategies:

• McDonald’s yesterday officially launched six new specialty drinks, including boba-style refreshers and crafted sodas like Sprite Berry Blast.
• Dunkin’ recently introduced new refreshers, frozen coffees, and a “dirty soda,” leaning into customization.
• Wendy’s dropped a lineup of new watermelon drinks, including a sparkling energy beverage and a Sprite-based option.

Taco Bell, KFC, Dutch Bros., and 7 Brew are also expanding into energy drinks, shakes, boba-style offerings, and protein-packed drinks.

Driving the trend: Fast-food chains have seen their margins squeezed by rising food costs, especially the price of beef, making drinks—which offer higher profit margins—a more attractive growth play. These higher margins also allow restaurants to offer more discounts to bring in customers, who often buy food as well.

Zoom out: The non-alcoholic beverage market is already a ~$100 billion/year category in the US, and growing faster than the rest of the dining industry, according to Axios.