McDonald’s is one of many chains pushing beverages now. | Photo courtesy of McDonald’s.
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Consumers can’t seem to get enough fancy beverages these days. McDonald’s is making a big push into the market. So is Taco Bell and Chick-fil-A. Starbucks and Dunkin’ are upping their games. That’s all five of the five largest chains.
7 Brew is growing at an inconceivable rate. Indeed, beverage chains are expanding like crazy.
The questions about this market routinely come to Dutch Bros, which is publicly traded. The company has responded by noting, simply, that the business is always competitive, and that it continues to grow its market share.
McDonald’s entry into the market is certain to create a ripple effect, but in general when the company adds a product in a different industry sector, like smoothies or energy drinks, it lifts the brands in that sector, thanks to its marketing power.
And for now, at least based on chain-level average-unit volumes, there is plenty of demand to keep supplying the number of coffee and beverage chain locations being opened.
Yet that can change in a hurry. The number of restaurant companies in expansion mode and the number of big, large-scale chains breaking into the market could, at some point, lift the supply of restaurant beverages past the demand for them. When that happens remains to be seen.
This week’s financial news
McDonald’s unveiled a comprehensive new strategy called McDonald’s Next and will involved upgraded technology, upgraded menu, upgraded service and more influencer marketing, which I would not call an upgrade.
It’s also testing drive-thru AI again, which I’m sure pairs nicely with its goal of improving hospitality. That led me to ask this question: What is all this technology doing for the restaurant business?
Shake Shack was in the news a lot this week. The chain lowered its quarterly guidance. It’s also pushing more speed, but only to a point. Oh and someone stole a bunch of its ribs. No really.
Don’t look now but restaurants are hiring again.
Pizza Hut may have found a buyer. Or at least it’s negotiating with one potential buyer, according to reports. So we looked at it.
Hey, remember Clover Food Lab, the plant-based chain that announced its closure last week? Well, about that …
The Chinese tea chain Chagee is having some early success in the U.S., apparently.
Number of the week
Worth a reminder: Pizza Hut used to be the largest pizza chain in the U.S. It is not the largest pizza chain in the U.S. any longer.
Quote of the week
“This is kind-of how the quarter has gone.” -Shake Shack CEO Rob Lynch, to investors, after telling them about the theft of a truckload of ribs that were supposed to be used in the chain’s premium sandwich last month.
On the blog
I wrote about technology, McDonald’s AI and Pizza Hut. Check out all my blog posts on The Bottom Line.
On the podcasts
On A Deeper Dive I spoke with Toni Ronayne about leadership. On The Week in Restaurants we talked about McDonald’s, FIFA and THC.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.
