Taco Bell is attracting a younger crowd with its flashy Live Más Café drinks

IRVINE, Calif. – Taco Bell is going all-in on beverages, starting with its Live Más Café concept.

the Yum brands The chain unveiled the beverage-focused store’s look last December, with its first location in Chula Vista, California. Ten months later came a second location near the UC Irvine campus. By the end of the year, Taco Bell expects to have 30 Live Más cafes in its portfolio, throughout Southern California, Dallas and Houston.

Unlike McDonald’s now-defunct subsidiary CosMc, which had its own standalone locations, Live Más Café lives inside existing Taco Bell restaurants. Customers order from kiosks and can watch “winemakers” collect their drinks from behind the designated counter, which takes up prime real estate in the store. The drinks menu includes a range of drink options, from blended coffee to lemonade-based drinks.

The beverage-focused concept should help the Mexican-inspired chain reach its goal of creating a $5 billion beverage business by 2030. Taco Bell first revealed that goal in March at its Investor Day, where the chain shared more about its plans to continue growing as it fuels Yum’s operating profit growth.

So far this year, Taco Bell has sold more than 600 million drinks, up 16% from the same period last year, according to the company. Taco Bell said more than 60% of the chain’s orders this year included a drink.

“I think drinks are big right now because I think people are really craving unique and interesting flavors in their drinks, and we hear that all the time from our customers,” said Liz Matthews, global head of food innovation at Taco Bell.

Upon entering the Irvine location, the Live Más Café drink station is the obvious star.

Most self-ordering kiosks are located in front of the long station counter. Customers have a free view of “bellristas” making their specialty drinks, unlike other restaurant employees who assemble Crunchwrap Supremes and Chalupas hidden from view.

Digital menu boards throughout the restaurant highlight drink offerings. The beverage menu includes four distinct categories: churro coolers, specialty coffees, refreshments, and “Billerista Favorites.”

Churro coolers are a cold, creamy milkshake topped with churro pieces. Specialty coffee comes either hot, iced, or blended as “chilled.” The brightly colored refreshments use either lemonade, green tea, or Rockstar energy drinks as a base for fruity flavors, like strawberry passion fruit or mango peach. “Bellerista Favorites” include seasonal options, such as the Autumn Caramel Apple Empanada Churro, which includes blended pieces of Taco Bell Empanada.

When creating the menu, Matthews and her team tried to stick to the chain’s Mexican-inspired roots, but she said Taco Bell will always have a “spirit of fun.”

And while Live Más Cafe offers plenty of options, with a variety of flavors, Taco Bell has kept the customization options to a minimum.

“What we found when we talked to consumers is that they actually want us to curate their drink for them,” Matthews said.

So far, the best-selling drinks at the Irvine location are the Mexican Chocolate Churro Chiller, the Dirty Mountain Dew Baja Blast Dream Soda, and the Mango Peach Agua Refresca. Six of the site’s top 10 best-selling drinks are coolers. This is a reversal from the initial test site in Chula Vista, which saw similar demand for each beverage category, according to Matthews.

Since opening day, the Irvine location has been selling more than 900 drinks a day, according to Taco Bell. More than a third of orders include an item from the Live Más Café menu.

Meanwhile, the Chula Vista location, which has more than quadrupled its initial sales projections, is selling more than 750 drinks a day, nearly a year after it opened, the company said. A quarter of all transactions include Live Más Café drinks, according to Taco Bell.

“Given what we’re seeing now with business results, the payback looks really attractive and in line with what our franchisees expect for something big, but we have a lot to learn,” said Taylor Montgomery, global president of brand at Taco Bell.

This year, the hottest trend in fast food wasn’t the chicken sandwich or veggie burger. Instead, the spotlight was on drinks in all their shapes, colors and nutrients.

For example, Shake Shack It sells lemonade with mini raspberry boba, inspired by the success of bubble tea. Panera Bread is testing murals and energy refreshments in select bakery cafes. Chick-fil-A plans to open Daybright, a beverage-focused restaurant serving specialty coffee, smoothies and cold-pressed juices in Hiram, Georgia, later this year. Although McDonald’s this summer ended its CosMc’s subsidiary that focused on drinks and snacks, it also tested new coffee drinks, soft drinks and flavored sodas in more than 500 U.S. restaurants.

The number of drinks sold by the 500 largest chains rose more than 9% last year, according to Technomic. The explosion of beverage innovation comes on the heels of the rapid expansion of a number of specialty beverage chains, from startup 7 Brew Coffee to dirty soda inventor Swig.

“[Quick-service chains] “They saw there was a huge opportunity with a whole generation and how interested they were in the ‘tiny treats’ culture,” said Claire Conaghan, a trend scientist at Datassential, which tracks menu trends. “There are options to move beyond their focus of core meals and really drive into that snacking moment.”

Generation Z and Millennials are driving the trend, according to Varchasvi Singh, a food services analyst at Mintel. Younger generations enjoy customizing their food and beverage orders.

“Among younger consumers, in particular, we see that eating fast food is as much about experimentation and innovation as it is about enjoyment,” Singh said. “They are more open to trying signature menu items and customizing their orders, while older generations, who have long associated fast food with affordability, are becoming more critical of how expensive it is for them.”

For Taco Bell, the shift into beverages and the creation of Live Más Café is part of its broader plan to attract younger consumers, who are expected to see a rapid increase in their purchasing power within a few years.

“Over the last five years, we’ve really pivoted and thought about the brand and how to position it for Gen Z, and then Café was really born from that,” Montgomery said. “I think 60% of Gen Z consumers come to a restaurant or… [quick-service restaurant] For an afternoon treat.”

Instead of creating a standalone Live Más Café, Taco Bell chose to position the sub-brand within existing restaurants in part out of “humility,” according to Montgomery.

“Today, we’re not known for being a beverage destination, yet,” he told CNBC.

Live Más Café can also help Taco Bell on a larger scale.

“It also serves 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 all of the alternative milks or maybe just these two or two types? Do we need all 15 flavors of any type to replenish energy?”

This is already starting to happen. Taco Bell’s watercolor murals, which started as a Live Más Café menu line, have since launched nationwide.

“It’s one of our best-selling items, and we couldn’t wait to expand the café,” Montgomery said. “We’ve rolled it out to all the restaurants, and we’ve seen success there.”

Additionally, the coffee options on the café’s menu are part of Taco Bell’s plan to make a bigger push into breakfast. The chain began offering morning meal more than a decade ago, but last year it told franchisees that they could eliminate offering breakfast; For some fast food operators, opening early is not profitable, plus there is the added headache of finding employees willing to work the morning shift.

Taco Bell has already had some success with another sub-brand. Its Cantina format, typically found in cities, features a customized menu, alcoholic beverages and seating intended to encourage customers to linger. Since opening its first location in Chicago a decade ago, Taco Bell Cantina has expanded to dozens of restaurants.

Broadly, even as inflation-weary consumers pull back on their spending, Taco Bell’s focus on new menu items has lifted its sales. Earlier this year, the company announced plans to double its innovation in 2025. Taco Bell prices are up 75.5% since 2019, according to Technomic’s Ignite List. However, customers keep coming back.

In recent years, Taco Bell has become the jewel of Yum’s portfolio, typically outperforming both Wall Street expectations and its sister chains, KFC and Pizza Hut. Executives have called the chain one of the company’s primary growth engines. In the second quarter, while many fast food competitors reported shrinking sales, Taco Bell reported same-store sales growth of 4%.

“From a portfolio standpoint, we represent a very significant amount of Yum’s operating profit, but we’re learning a lot from other brands as well,” Montgomery said.

Yum is expected to report its third-quarter earnings before the bell on November 4.

Watch the video to learn more about why Taco Bell is betting on drinks.