Fast-Food Chains Race for Afternoon Caffeine — Who’s Pulling Ahead

McDonald’s and Taco Bell rolled out new caffeinated drinks within days of each other, setting off a battle for late-afternoon customers that could reshuffle where people stop for a boost.

McDonald’s this month began selling a Red Bull–branded Dragonberry drink at thousands of locations, and Taco Bell countered with a trio of energy refreshers. The moves come as both operators push to make beverages a larger slice of their revenue: McDonald’s reports that the average ticket has climbed by about one-half since it intensified its drink offerings, while Taco Bell says it’s aiming for roughly $5 billion in drink sales — a haul comparable to the total system sales at some national chains. With McDonald’s operating roughly 13,700 restaurants and Taco Bell about 7,700, scale gives the former reach but the latter has built a fervent following around specialty items such as Baja Blast.

Smaller, beverage-focused brands are eating into that opportunity. Chains like 7 Brew and Dutch Bros expanded quickly last year; 7 Brew opened nearly 300 sites and lifted sales per location by about one-third. “The niche caffeine shops are moving fast and grabbing customers who used to be captive to big chains,” said Sarah Kim, a restaurant analyst in New York. She added that big operators will need more than celebrity collaborations to hold share.

For consumers, the competition means more options and experimental flavors showing up at drive-thrus. For the chains, drinks offer higher margins and a chance to increase frequency among younger customers. Taco Bell’s nostalgia-driven flavors tap a dedicated base, while McDonald’s distribution network helps push national rollouts quickly. Both are also testing limited-time launches and loyalty perks to keep people coming back.

Expect the market to get busier. Industry observers say the next phase will reward quick product cycles and local tailoring — a strategy smaller brands already use well. If either chain wants to dominate the afternoon caffeine habit, it will have to out-innovate not just each other, but the upstarts that are steadily expanding their footprints.