The world's largest burger chain is about to enter the energy drink and specialty soda sectors. McDonald's plans to launch Red Bull Pitaya-flavored energy drink in U.S. stores later this year as part of an overhaul of its cold drink menu, according to people familiar with the matter and company documents. The new drinks, scheduled to hit stores next month, include Dirty Dr. Pepper soda and mango pineapple smoothie, documents show. The company's range of energy drinks is expected to go on sale in August.
The fast food company has been planning to expand its beverage business for years, including trial sales of tart cherry energy pops, blackberry mint green tea and other drinks at its short-lived concept store CosMc’s.
Documents show that McDonald's plans to price the new drinks lower than competitors such as Starbucks, Dutch Bros, and Sonic.
McDonald's expects the new drinks to generate high profit margins for franchisees who make up the majority of its stores. Franchisees have invested thousands of dollars in new equipment for each store to mix drinks, hoping to boost sales without reducing service efficiency, people familiar with the matter said. McDonald's said it has incorporated the opinions of store operators when formulating the best drink preparation plan.
Sales of energy drinks and specialty sodas are growing rapidly as Americans no longer rely solely on coffee and tea to get their caffeine fix.
In order to cater to the demand for so-called "dirty soda" and fruity special drinks, emerging beverage chains such as Swig have expanded rapidly in recent years. Dutch Bros has become the third largest coffee chain brand in the United States with its energy drinks.
Large catering companies are racing to catch up. Taco Bell added Mountain Dew Baja Blast Dirty Soda and Tropicana Original Dirty Lemon to its permanent menu in March this year, as part of the brand's efforts to build a $5 billion beverage business by 2030.
Starbucks is also launching a caffeinated icy drink special this month, and can add energy concentrate to existing fruity drinks.
McDonald's said it hopes to capture a larger share of the global beverage market, which is worth more than $100 billion. In 2023, McDonald’s launched a secondary brand, CosMc’s, to test consumers’ response to novel drinks. After closing CosMc's last year, the company began testing new drinks in about 500 stores in September.
Charlie Newberg, McDonald's global head of beverages, said the test results showed that the company needs a rich beverage lineup to break through in the crowded beverage market. The company also identified categories that consumers did not accept, such as matcha or turmeric-flavored lattes sold by CosMc’s.
“What consumers want is a little treat, a little companionship throughout the day,” Newberg said last year. “That fits right in with our strengths.”