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Something has shifted in the beverage business over the past 24 months, and much of the industry coverage has missed an interesting storyline. Yes, McDonald's is rolling out a national crafted beverage lineup. Yes, Taco Bell is targeting five billion dollars in beverage sales by 2030. Yes, KFC's Kwench is scaling to roughly three thousand global stores this year, and Chick-fil-A is building drinks-first formats. These headlines are real, but the news is not that legacy QSRs have rediscovered drinks.

Legacy QSRs have rediscovered drinks roughly every five years for the last two decades, without creating much of permanence. The big story to me is that this time, the structural investment decisions being made, are different. McDonald's spent eighteen months running a standalone test concept (CosMc's) before folding the learnings into its existing system. Taco Bell built dedicated counters with dedicated staff inside its Cantina locations.

KFC is installing beverage bars under the Kwench brand. Chick-fil-A rebuilt a Georgia location as a drinks-first concept. None of this looks like the LTO calendar-building of the past. All of it looks like the decisions of brands that have accepted what pure-play operators have known for decades: a sizeable beverage business cannot be built by finding counter space for a piece of equipment or two. The brands that commit accordingly over the next five years will own a meaningful share of a beverage category that continues to roll forward.

The Pure-Play Operators Built the Beverage Category and They Still Own It

Starbucks and Dunkin proved 20+ years ago that consumers would pay premium prices for specialty beverages. They built the category and ran it largely uncontested for nearly a generation. Over time they found new ways to drive growth with younger customers; cold, customized, colorful, snack-oriented products. Many people remember the first time they tried a Starbucks Frappuccino (1995), Caramel Macchiato (1996), or a Dunkin Coolatta (1997).

During this time newer concepts also formed, executing against an even narrower thesis; Dutch Bros (1992), Swig (2010), and 7 Brew (2017). These brands focused further within the same occasion, targeted at younger, more frequent customers. The drive-thru beverage occasion, the dirty soda, the blended fruit drink, the fruity refresher; these were not new occasions, just underserved ones. Fast forward to 2026: 7 Brew achieved No. 1 on Yelp's Fastest Growing Brands list with 244 percent year-over-year growth in consumer interest, Smoothie King at No. 2; Dutch Bros, Black Rock, and Scooter's all in the top 50. These newer concepts were not built to be Starbucks; they were built for a customer and an occasion that Starbucks was not originally designed for. I have led a scale beverage business, and what these pure-play operators understand at an operational level is what some legacy QSRs are now learning. The pure plays operators are not a trend; they are a category. They built it, they understand it, and they will work to defend it.

Twenty Years of QSR Beverage Launches Have Not Created Much Permanence

Legacy QSR brands have tried beverages many times over the last two decades; LTO iced coffees, seasonal teas, dirty soda LTOs, flavored lemonades, and the list goes on. These promotions tend to drive some performance and yet often fade quickly. There have been some structural success stories on fountain beverages (McDonald's $1 drinks, Sonic Happy Hour), but these have not translated to the kind of premium profitable beverage portfolios that the newer concepts are achieving.

More commonly, the promotional LTO approach treats the category as a marketing calendar item, not a business model decision. It uses the existing kitchen, the existing crew, the existing throughput. When the LTO ends, the operating system reverts, and beverage AUVs often go back to where they were. I have sat in these rooms as both a pure-play operator and a mainstream QSR marketing leader and have been part of more 'this is the year we get serious about beverages' discussions than I can count.

The tension in those discussions is always over the operating investments actually required: dedicated equipment, training, labor, and incremental daypart marketing. Those needed investments create barriers, and brands often reach for the marketing only, as a result. The pure-plays on the other hand are not winning because they invented better drinks; they are winning because they built their business models around drinks. Until recently, most legacy QSR brands had not.

The Structural Decision Beverage Winners Are Making

Every legacy QSR getting serious about beverages right now has separated it from the legacy operating model before trying to scale it. McDonald's built five standalone CosMc's restaurants over 18 months as a "learning lab" to test new technologies and processes without impacting the existing McDonald's experience. The standalone concept closed in mid-2025, but the learnings now sit inside McCafé, rolling nationwide this year after a 500-store test that exceeded expectations and drove incremental snack, dinner, and evening occasions.

Taco Bell built Live Más Café as a shop-within-a-shop with dedicated drink equipment, dedicated staff ("Bellristas"), separate kiosk ordering, and a designated counter taking prime real estate. The average Live Más Café sells about 25 percent more beverages than an average Taco Bell. The chain went from one store in December 2024 to roughly 30 by end of 2025, with a $5 billion beverage revenue target by 2030. KFC built Kwench with dedicated counters, branding, and in flagship locations dedicated bars; Yum! Brands has signaled global scaling to roughly 3,000 stores this year. Chick-fil-A rebuilt a Georgia restaurant as a drinks-first concept called Daybright, with the same likely intent; operationalize a substantial beverage business in a smaller market environment before scaling broadly.

The common thread is the operator insight: beverage at scale requires equipment, process, training, and labor models that existing kitchens cannot absorb easily. If you have run real beverage volume, you already understand that this is the correct way to build a sizeable permanent beverage business.

The equipment, the prep, the labor, and the daypart logic are different enough from a traditional QSR food operation that trying to share them produces mediocre versions of both. Net, the brands building dedicated infrastructure are buying themselves the right to learn. The brands that aren't, are still leaning on marketing promotions with light-duty beverage innovation.

The Operating Test That Will Separate the Winners from the Watchers

Scaling a learning lab into hundreds or thousands of restaurants is a different exercise altogether. From my operating experience, it requires capital commitment to equipment that doesn't share a footprint with food prep, investment in beverage-specific training, dedicated labor, technology, and a daypart marketing strategy that uses beverages to open occasions the food side of the menu doesn't really serve; specifically, afternoon snack, morning, and late night.

Beyond these incremental occasions, premium beverages can be excellent profit-builders on existing meal or combo purchases. The brands that succeed at scale are the ones who understand this is a business model investment. The brands that don't are the ones who treat the testing as a marketing exercise, absent the supporting infrastructure.

There is a legitimate middle ground: some legacy QSRs will find they cannot make this investment without compromising the food business that funds it. That is not a wrong answer, it's a strategic choice. For these brands, offering relevant beverage options should perform at a minimum as good average check and profit builders.

However, I have seen brands enter the beverage category without ever coming to terms with the real requirements of building a significant beverage business; my advice is to ask the more difficult strategic and investment questions as early as possible in your thought process.

The next three to five years will sort QSR operators into two groups: the ones who sought to build a permanent incremental beverage business and invested accordingly, and the ones who treated it as a marketing event. The brands that win in beverages will be the ones whose leadership makes the investments the pure-plays already have. Dedicated equipment. Dedicated labor models. Dedicated training. Dedicated daypart strategy. A real category team with real capital authority.

But the pure-play operators do not intend to slow down. The race is already on, and the architectural decisions being made right now will determine which restaurant brands are still in this category in 2030.

Editor's note: This is the latest column in a recurring series by James O'Reilly, multi-time industry CEO (Ascent Hospitality, Smokey Bones, Long John Silver's, and former Sonic and Yum! Brands executive). O'Reilly explores industry hot topics and offers a roadmap for how operators can win over consumers in an ever-changing restaurant dynamic. The first story, on what drove traffic last year, is here. The second, on why pricing alone won't fix the problem, is here. The third, on why pressure reveals the strength of a restaurant brand, is here. The fourth, on four leadership disciplines for a soft restaurant market, is here. The fifth, on the narrowing set of decisions driving restaurant performance, is here. And the sixth, on the restaurant brands winning on value know exactly what value means, is here.

The post How Restaurant Brands Can Navigate the Beverage Race appeared first on FSR magazine.