UPDATE: The beverage wars are heating up as Taco Bell and Chick-fil-A launch new drink-centric concepts to challenge Starbucks for dominance in the booming U.S. beverage market. This aggressive move comes just as Starbucks begins to implement its turnaround strategy, making the competition more critical than ever.
Fast-food rivals are rolling out innovative beverage-focused restaurants — Live Más Café by Taco Bell and Daybright by Chick-fil-A — aimed at capitalizing on America’s obsession with customizable drinks. Customers can expect colorful sodas, juices with whipped toppings, and specialty coffees, all designed to be shareable on social media.
Chick-fil-A’s first Daybright location is set to open in Atlanta later this year, while Taco Bell aims to generate $5 billion in beverage sales by 2030. Taco Bell is planning to open 30 new locations across Southern California and Texas by fall 2025. Currently, five Live Más Café locations have already launched in California.
A Taco Bell spokesperson stated, “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.” This shift reflects a growing trend among fast-food chains such as Panda Express, KFC, and Burger King, all introducing new drink menus catering to younger, value-conscious consumers.
Starbucks, which has long ruled the $100 billion beverage market, is facing increasing competition not just from Taco Bell and Chick-fil-A, but also from rivals like Dutch Bros. Recently, Starbucks reported its sixth consecutive quarter of declining same-store sales, while Dutch Bros enjoyed a 4.7% increase in the same metric for the first quarter of 2025 and a 28% revenue surge year-over-year.
The rise of these new beverage-centric restaurants poses a significant challenge to Starbucks. Analysts suggest that these smaller concepts are attracting cost-conscious consumers who want a relaxed atmosphere without the hefty price tag. “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.
Starbucks is not backing down, however. The company is innovating with new products such as protein cold foams and forging partnerships with celebrities to maintain its presence in the market. A Starbucks representative noted that their customer value perception scores are at near two-year highs, particularly among Gen Z and millennials, who comprise over half of its customer base.
Despite its struggles, Starbucks remains a formidable player. “I never count out Starbucks,” Della Penna added, emphasizing the company’s ability to adapt and innovate. The question now is whether Taco Bell and Chick-fil-A can replicate Starbucks’ success or generate enough buzz to disrupt the coffee giant’s stronghold.
As the beverage battles unfold, both consumers and industry watchers will be keenly observing how these developments impact Starbucks and the broader beverage landscape. Have a tip or insight? Contact this reporter via email at Katherine Tangalakis-Lippert at [email protected].
Stay tuned for more updates as this story develops.