Prime Highlights:
- Major chains like McDonald’s, Starbucks, Dunkin’, and Dutch Bros are betting big on beverages to drive sales, with Gen Z leading demand for cold, bold, and customized drinks.
- Beverages are proving more profitable than food, making them a key growth area for restaurants in a competitive market.
Key Facts:
- Beverage items on menus at the top 500 chains rose over 9% in the past year, according to Technomic’s 2025 Beverage Report.
- Dutch Bros’ protein milk launch boosted same-store sales by more than 6% in the latest quarter, while its stock is up 22% year-to-date.
Key Background:
Restaurant and coffee chains are increasingly banking on beverages to boost sales, as younger consumers, particularly Gen Z, show a strong appetite for bold, customized, and cold drinks. McDonald’s and Dunkin brands, Starbucks, and Dutch Bros are competing brands that are focusing on innovation in the beverage industry to create differentiation in an ultra-competitive market.
Technomic’s 2025 Beverage Report shows that the top 500 chains added over 9% more drinks to their menus in the past year. The growth has been primarily energized by cold drinks like specialty coffee, refreshers, and energy drinks, whereas conventional hot coffee and tea drinks have dropped. The report also noted a consumer shift toward “beverage-only occasions,” with 22% of customers visiting chains specifically for a drink, up from 20% the year prior.
Chains are responding with a wave of new launches. Dunkin’ recently announced an expansion of its hit Refreshers line, introducing flavors like Mango and Mixed Berry, as well as a new Cereal N’ Milk Latte designed to tap into nostalgia. This September, McDonald’s will trial a beverage-oriented menu in 500 restaurants across the United States, including Cream Vanilla Cold Brew and Toasted Vanilla Frappe as well as fruit-forward refreshers.
As part of its turnaround plan, Starbucks under CEO Brian Niccol will roll out a protein-packed cold foam option that delivers 15 grams of protein with no added sugar. The chain reports rising satisfaction levels among Gen Z and millennials, who make up more than half its customer base.
Dutch Bros boosted same-store sales by over 6% last quarter after launching protein milk. The company’s stock has surged 22% year-to-date, underscoring investor confidence in the strategy.
While rising prices remain a challenge, 61% of consumers report reducing beverage purchases after noticing price hikes, chains remain optimistic. As McDonald’s CEO Chris Kempczinski put it, beverages represent a “big opportunity” as they are both growing and more profitable than food.
