• Taco Bell and Chick-fil-A are rolling out beverage-centric spin-offs that compete with Starbucks.
• The competition arrives at a tense time, as Starbucks’ turnaround campaign begins to take root.
• Still, analysts told Business Insider the challenge is a good thing for the coffee giant.

Starbucks started it; now the fight for America’s daily drink habit is entering a new phase.

Fast-food giants Taco Bell and Chick-fil-A are rolling out beverage-centric spin-off restaurants — Live Más Café and Daybright — in hopes of capturing customers’ growing appetite for colorful, customizable drinks that double as social media fuel.

Their menus feature soda and juice concoctions with whipped toppings and fruit mix-ins, as well as specialty coffees and blended drinks, with a limited selection of food items.

Chick-fil-A will open its first Daybright location in Atlanta later this year, and Taco Bell has a goal of driving $5 billion in beverage sales by 2030 with its expanding Live Más Café concepts, with plans to open 30 new locations across Southern California and Texas by fall 2025.

So far, Taco Bell has opened five Live Más Café locations across California.

“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,” a Taco Bell spokesperson told Business Insider, adding that the spin-off’s menu, made by “trained Bellristas,” extends “beyond specialty coffee.”

Chick-fil-A did not respond to a request for comment from Business Insider.

The expansions suggest that an already growing trend in the dining industry is gaining momentum. Chains across the fast-food and fast-casual sectors, including Panda Express, KFC, and Burger King, are introducing new drink menus that capitalize on Gen Z’s love of cold and customizable beverages.

The beverage battles begin

Starbucks’ longtime dominance in the $100 billion beverage market is being challenged from all sides, with direct competitors like Dutch Bros stealing sales through speed, value, and novelty. In July, Starbucks reported its sixth consecutive quarter of declining same-store sales, while Dutch Bros saw its same-store sales increase by 4.7% in the first quarter of 2025, and its revenue surged 28% year-over-year in the second quarter.

Concepts like Live Más Café and Daybright may further siphon away customers with their ultra-Instagrammable drink concoctions, appealing to younger and more cost-conscious fans.

“These smaller concepts focused on drinks are creating a space for consumers who are very value-conscious,” Michael Della Penna, chief strategy officer at the digital advertising research firm InMarket, told Business Insider. “You can have a relaxed, lounge-style environment to connect with friends, to do some work, but you don’t have to spend an arm and a leg to be there.”

In recent years, Starbucks has occasionally struggled with its value proposition as the cost of coffee has risen. Since CEO Brian Niccol took the helm last September, he’s been working to revitalize the company’s reputation with his “Back to Starbucks” initiative.

Business Insider previously reported that, though the “Back to Starbucks” effort has gained some traction, Wall Street is not yet convinced about the turnaround campaign. It’s too soon to tell whether the fledgling beverage-restaurant concepts will fare any better.

While there’s increased interest in new drink-focused cafés among the top fast food providers, no one has yet perfected the formula, and it’s a risky move to challenge the coffee giant directly. McDonald’s has already learned the hard way, as its drink-only concept, CosMc’s, which drew early comparisons to Starbucks, fizzled out earlier this year after about 18 months of testing across its pilot locations.

Asit Sharma, an analyst for the Motley Fool, told Business Insider that, although the CosMc’s locations have shuttered, the industry “should never underestimate” McDonald’s ability to pivot from a failed experiment.

“They probably took many learnings away from the CosMc cafés that they can then populate through in-house,” Sharma said, adding that this brewing beverage battle is “a good challenge for Starbucks.”

“Every brand that’s dominant needs challenges like this to stay relevant,” Sharma said.

It’s still Starbucks’ fight to lose

Just because Starbucks has been struggling doesn’t mean it’s anywhere near being out of the fight. Starbucks continues to innovate with new products, such as its protein cold foams, and drives generational conversations through celebrity partnerships, like a recent listening party for Taylor Swift’s “The Life of a Showgirl” album release.

A Starbucks spokesperson told Business Insider its customer value perception scores are near two-year highs, driven by gains among Gen Z and millennials, who make up over half its customer base.

“I never count out Starbucks, just because, you know, they’re not sitting back and watching this trend just take over,” Della Penna said.

Starbucks also has the established infrastructure to roll out new flavor combinations or drink offerings if a particular concept catches fire at one of its new competitors, both Sharma and Della Penna said.

The risk, Sharma added, is that Starbucks may get sidetracked by the buzz around new offerings and allow itself to be lured into a category where it doesn’t need to compete.

“Starbucks has a great amount of capacity to match beverages, pound for pound,” Sharma said, “But they struggle with complex drinks — and they always have — so that is something that has to be carefully considered.”

He added: “Once they decide to match something, ingredient for ingredient and complexity for complexity, that’s where Starbucks potentially could stumble, and could kind of fall apart.”

The question remains whether these new contenders can replicate Starbucks’ secret sauce that has kept it dominant for decades — or make enough noise to knock the coffee giant off its game.

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