Taco Bell woos younger crowd with Live Más Café flashy beverages
IRVINE, Calif. – Taco Bell is also focusing on beverages, starting with the Live Más Café concept.
Yum Brands The chain introduced its beverage-focused store format last December, with its first location in Chula Vista, California. Ten months later, the second location arrived near the University of California, Irvine campus. Taco Bell anticipates having 30 Live Más Cafés in its portfolio by the end of the year, in Southern California, Dallas and Houston.
Unlike McDonald’s now-defunct CosMc spinoff, which had its own standalone locations, Live Más Café lives inside existing Taco Bell restaurants. Customers order from kiosks and can watch “bellristas” prepare their drinks from behind the designated counter, which takes up prime real estate in the store. The beverage menu includes a variety of beverage options, from blended coffees to lemonade-based drinks.
The beverage-focused concept is expected to help the Mexican-inspired chain achieve its goal of building a $5 billion beverage business by 2030. Taco Bell first announced this goal at an investor day in March; Here, the chain shared more information about Yum’s plans to continue growing while accelerating operating profit growth.
Taco Bell has sold more than 600 million drinks so far this year, according to the company; This figure increased by 16% compared to the same period of the previous year. Taco Bell said more than 60% of the chain’s orders this year include beverages.
“I think beverages are hugely important right now because I think people want really unique, interesting flavors in their beverages, and we hear that from our consumers all the time,” said Liz Matthews, Taco Bell’s global chief food innovation officer.
center stage
Taco Bell’s Live Más Café.
Courtesy: Taco Bell
The Live Más Café beverage station is the clear star when you step into the Irvine location.
Most self-order kiosks are positioned in front of the station’s long counter. Customers get a free look at the “bellristas” who mix their signature drinks, unlike other staff at the restaurant who assemble Crunchwrap Supremes and Chalupas hidden from view.
Digital menu boards throughout the restaurant highlight beverage offerings. The drink menu covers four different categories: churro coolers, specialty coffees, refrescas, and “bellrista favorites.”
Churro coolers are creamy, cold milkshakes topped with churro pieces. Specialty coffees come hot, iced, or “cooler” blended. Brightly colored refrecas use lemonade, green tea or Rockstar energy drinks as the base for fruity flavors like strawberry passion fruit or mango peach. And “bellrista favorites” include seasonal options like the fall caramel apple empanada churro cooler, featuring blended pieces of Taco Bell’s apple empanada.
When crafting the menu, Matthews and his team tried to stay true to the chain’s Mexican-inspired roots, but said Taco Bell will always have a “playful spirit.”
While Live Más Café offers plenty of options with a variety of flavors, Taco Bell has kept customization options to a minimum.
“When we talked to consumers, we found that they actually wanted us to pick their beverages for them,” Matthews said.
To date, the Irvine location’s best-selling drinks are the Mexican Chocolate Churro Chiller, Dirty Mountain Dew Baja Blast Dream Soda, and Mango Peach Agua Refresca. Six of the 10 best-selling beverages in the region are coolers. This is a turnaround from the first test location in Chula Vista, which saw similar demand for each beverage category, according to Matthews.
According to Taco Bell, more than 900 drinks per day have been sold at the Irvine location since opening day in September. More than a third of orders include an item from the Live Más Café menu.
Meanwhile, the Chula Vista location has sold more than 750 drinks per day in almost a year since opening, exceeding its initial sales forecast by four times, the company said. According to Taco Bell, a quarter of all transactions include a Live Más Café drink.
“Given what we’re seeing from the business results right now, the payback looks really attractive and is in line with what our franchisees would expect for something big, but we still have a lot to learn,” said Taylor Montgomery, Taco Bell’s global chief brand officer.
‘A little treat’
This year’s hottest trend in fast food is not at all chicken sandwich or plant-based burgers. Instead, beverages of all textures, colors and nutritional values came to the fore.
For example, Shake Shack Inspired by the success of bubble tea, it sells lemonade with mini raspberry popping boba. Panera Bread is testing frescoes and energy boosters at select bakery-cafés. Chick-fil-A plans to open Daybright, a beverage-focused restaurant serving specialty coffees, smoothies and cold-pressed juices, in Hiram, Georgia, later this year. Although McDonald’s this summer ended its spinoff focused on beverages and snacks called CosMc’s, it also tested new coffee drinks, refreshments and flavored sodas at more than 500 U.S. restaurants.
The number of beverages sold by the top 500 chains increased by 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 startup 7 Brew Coffee to dirty soda innovator Swig.
“[Quick-service chains] Claire Conaghan, a “trendologist” at Datassential, which tracks menu trends, said: “I’ve seen a huge opportunity for a whole generation and how they’re engaging in this ‘small treat’ culture. They have the option to go beyond the core meal they focus on and really lean into that snacking moment.”
According to Mintel’s food services analyst Varchasvi Singh, Generation Z and Millennials are driving this trend. Younger generations enjoy customizing their food and drink orders.
“Especially among younger consumers, we see that fast-food dining is as much about experience and innovation as it is about indulgence,” Singh said. “They are much more open to trying premium menu items and customizing their orders, while older generations, who have long associated fast food with extreme affordability, are a little more critical of how expensive it has become for them.”
For Taco Bell, moving into beverages and creating Live Más Café is part of its broader plan to appeal to younger consumers, whose spending power is expected to skyrocket in just a few years.
“We’ve really gone through a transformation over the last five years and thought about the brand and how to position it for Gen Z, and so Café was really born from that,” Montgomery said. “I think 60% of Gen Z consumers have been to a restaurant or restaurant. [quick-service restaurant] For an afternoon treat.”
Instead of creating a standalone Live Más Café, Taco Bell chose to put the subbrand within existing restaurants, partly out of “humility,” according to Montgomery.
“Today, we are not yet known as a beverage destination,” he told CNBC.
Live Más Café could also help Taco Bell more broadly.
“It also acts as 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 every kind of alternative milk, or just one or two? Do we need all 15 flavors of the energy refresher?”
This has already started to happen. What started as Taco Bell’s Live Más Café menu series, agua frescas has since rolled out nationwide.
“They are one of our best-selling products and we couldn’t wait to expand the Café,” Montgomery said. “We implemented them in all restaurants and saw success there.”
Additionally, the coffee options on the cafe’s menu are part of Taco Bell’s plan to focus more on breakfast. The chain began serving morning meals more than a decade ago but last year told franchisees they could opt out of breakfast service; For some fast-food operators, opening early is not profitable, adding to the difficulty of finding staff willing to work the morning shift.
Taco Bell has already had some success with another sub-brand. The Cantina format, usually found in cities, includes a special menu, alcoholic beverages and seating to encourage customers to linger. Taco Bell Cantina has expanded to dozens of restaurants since opening its first location in Chicago a decade ago.
Overall, Taco Bell’s focus on new menu items increased its sales even as inflation-weary consumers pulled back on spending; earlier this year, the company announced It plans to double innovation in 2025. Taco Bell’s prices are up 75.5% since 2019, according to Technomic’s Ignite Menu. Still, customers keep coming.
In recent years, Taco Bell has been the jewel of Yum’s portfolio, outperforming both Wall Street expectations and sister chains KFC and Pizza Hut. Executives called the chain one of the company’s main growth engines. While many fast-food competitors reported declining sales in the second quarter, Taco Bell reported same-store sales increased 4%.
“From a portfolio perspective, we represent a pretty significant portion of Yum’s operating profit, but we also learn a lot from other brands,” Montgomery said.
Yum is expected to report third-quarter earnings before the bell on November 4.
Watch the video to see why Taco Bell is betting on drinks.
