IRVINE, Calif. — Taco Bell is going all-in on drinks, starting with its Live Más Café concept.
THE Yum Brands The chain unveiled the beverage-focused store format last December, with the first location in Chula Vista, California. Ten months later, the second site appeared, near the University of California Irvine campus. By the end of the year, Taco Bell plans to have 30 Live Más Cafés in its portfolio, across Southern California, Dallas and Houston.
Unlike the now-defunct McDonald’s spinoff CosMc, which had its own standalone locations, Live Más Café lives inside existing Taco Bell restaurants. Customers order at the kiosks and can watch the “bellristas” prepare their drinks behind the designated counter, which occupies a prime space in the store. The drinks menu includes a range of drink options, from blended coffees to lemonade drinks.
The beverage-focused concept is expected to help the Mexican-inspired chain reach its goal of generating $5 billion in beverage revenue by 2030. Taco Bell first disclosed that goal in March at an investor day, where the chain shared more about its plans to continue growing while fueling Yum’s operating profit growth.
So far this year, Taco Bell has sold more than 600 million drinks, up 16% from last year, according to the company. More than 60% of the chain’s orders this year included a drink, Taco Bell said.
“I think drinks are popular right now because I think people are really craving unique and interesting flavors in their drinks, and our consumers tell us that all the time,” said Liz Matthews, global director of food innovation at Taco Bell.
At the center of the stage
Live Más Café de Taco Bell.
Courtesy: Taco Bell
Upon entering the Irvine location, drinks station Live Más Café is the clear star.
Most of the order terminals are positioned in front of the long station counter. Customers have a clear view of the “bellristas” who prepare their specialty drinks, unlike other restaurant employees who assemble Crunchwrap Supremes and Chalupas out of sight.
Digital menu boards throughout the restaurant highlight beverage offerings. The drinks menu includes four distinct categories: Churro Coolers, Specialty Coffees, Refreshments and “Bellrista Favorites.”
Churro coolers are creamy, cold milkshakes topped with churro pieces. Specialty coffees are hot, iced, or blended as a “chiller.” The brightly colored refrescas use lemonade, green tea or Rockstar energy drinks as the base for their fruity flavors, like strawberry, passionfruit or mango-peach. And “Bellrista Favorites” include seasonal options, such as the Fall Churro Empanada Caramel Chiller, which incorporates mixed pieces of Taco Bell’s apple empanada.
When developing the menu, Matthews and her team tried to stick to the chain’s Mexican-inspired roots, but she said Taco Bell would always have a “playful spirit.”
And while Live Más Café offers plenty of options with a variety of flavors, Taco Bell has kept the customization options minimal.
“What we found when we talked to consumers is that they really want us to make their drinks for them,” Matthews said.
To date, the best-selling drinks at the Irvine location are the Mexican Chocolate Churro Chiller, Dirty Mountain Dew Baja Blast Dream Soda and the Mango Peach Agua Refresca. Six of the top 10 best-selling drinks at the venue are coolers. This is a reversal from the initial testing site in Chula Vista, which saw similar demand for each beverage category, according to Matthews.
Since opening in September, the Irvine location has sold more than 900 drinks per day, according to Taco Bell. More than a third of orders include an item from the Live Más Café menu.
Meanwhile, the Chula Vista location — which exceeded its initial sales forecast by four times — has been selling more than 750 drinks a day nearly a year since it opened, the company said. A quarter of all transactions include a Live Más Café drink, according to Taco Bell.
“Given what we’re seeing from business results right now, the ROI looks really compelling and in line with what our franchisees expect for something big, but we still have a lot to learn,” said Taylor Montgomery, Taco Bell’s global brand director.
“Little treat”
This year, the hottest fast food trend hasn’t been the chicken sandwich or plant-based burgers. Instead, drinks of all consistencies, colors and nutritional values have taken center stage.
For example, Shake the cabin sells lemonade with mini boba bursting with raspberry, inspired by the success of bubble tea. Panera Bread is testing frescoes and energy refreshments in select bakery cafes. Chick-fil-A plans to open Daybright — a beverage-focused restaurant offering specialty coffees, smoothies and cold-pressed juices — in Hiram, Georgia, later this year. And although McDonald’s this summer ended its spinoff called CosMc’s, which focused on drinks and snacks, it has also been testing new coffee drinks, soft drinks and flavored sodas in more than 500 U.S. restaurants.
The number of drinks sold by the 500 largest chains increased more than 9% last year, according to Technomic. The rise of beverage innovation follows the rapid expansion of a number of specialty beverage chains, from newcomer 7 Brew Coffee to dirty soda inventor Swig.
“[Quick-service chains] I saw there was a big opportunity with a whole generation and how interested they are in this culture of ‘little treats,’ said Claire Conaghan, a trends specialist at Datassential, who tracks menu trends.
Gen Z and millennials are driving this trend, according to Varchasvi Singh, foodservice analyst at Mintel. Younger generations like to personalize their food and drink orders.
“Among younger consumers, in particular, we see that fast food is as much about experimentation and novelty as it is about indulgence,” Singh said. “They’re much more willing to try premium menu items and customize their orders, while older generations, who have long associated fast food with being extremely affordable, are a little more critical of how expensive it has become for them.”
For Taco Bell, pivoting to beverages and creating Live Más Café is part of its broader plan to attract younger consumers, whose purchasing power is expected to rise rapidly in just a few years.
“Over the last five years, we’ve really, really been transitioning and thinking about the brand and how to position it for Gen Z, and so Café was really born out of that,” Montgomery said. “I think about 60% of Gen Z consumers come to restaurants or [quick-service restaurant] for an afternoon treat.
Rather than create a standalone Live Más Café, Taco Bell chose to implement the sub-brand in existing restaurants, in part out of “humility,” according to Montgomery.
“Today, we’re not yet known for being a beverage destination,” he told CNBC.
Live Más Café can also help Taco Bell more broadly.
“It also acts as a bit of a test market where they can get more real-time data. What combinations are people doing the most?” Conaghan said. “Which customizations are most important? Do we need all alternative milk types or maybe just these or two? Do we need all 15 flavors of any energy refresher?”
This has already started to happen. Taco Bell’s agua frescoes, which started as a Live Más Café menu line, have since launched nationwide.
“They are one of our best-selling items, and we didn’t wait to expand the Café,” Montgomery said. “We pushed them into every restaurant and had success there.”
Additionally, the coffee options on the cafe menu are part of Taco Bell’s plan to further expand breakfast. The chain began serving the morning meal more than a decade ago, but last year told franchisees they could opt out of serving breakfast; For some fast food operators, opening early is not profitable, not to mention the added headache of having to find staff willing to work in the morning.
Taco Bell has already had some success with another sub-brand. Its Cantina format, typical of the cities, offers a personalized menu, alcoholic drinks and seating intended to encourage customers to linger. Since opening the first location in Chicago ten years ago, Taco Bell Cantina has grown to dozens of locations.
Generally speaking, even as inflation-weary consumers cut back on spending, Taco Bell’s focus on new menu items has boosted its sales; earlier this year, the company announced plans to double down on innovation in 2025. Taco Bell’s prices have climbed 75.5% since 2019, according to Technomic’s Ignite Menu. However, customers come back.
In recent years, Taco Bell has been the crown jewel of Yum’s portfolio, generally outperforming the expectations of Wall Street and its sister chains, KFC and Pizza Hut. Executives pointed to the channel as one of the company’s key growth drivers. In the second quarter, while many competitors in the fast food industry reported declining sales, Taco Bell reported 4% growth in same-store sales.
“From a portfolio perspective, we make up a pretty significant portion of Yum’s operating profit, but we also learn a lot from the other brands,” Montgomery said.
Yum is expected to report third-quarter results before the bell on November 4.
Watch the video to learn more about why Taco Bell is betting on drinks.