Dive Brief:
- Taco Bell launched four limited-time drinks based on horchata — a sweet beverage typically made with rice — at its spin-off Live Más Café locations on Thursday, according to a press release.
- Two of the drinks, the Strawberry Horchata Refresca, and the Vanilla Spiced Horchata Refresca, will comprise a larger national limited-time offering launching Dec. 10.
- The brand said the horchata remixes were part of a sip-test-repeat beverage innovation strategy at its 39 Live Más Cafés that helps Taco Bell identify potentially successful LTO drinks and permanent menu additions. The chain is pushing to expand its beverage sales to $5 billion yearly by 2030 and will leverage premium drinks in that effort.
Dive Insight:
Taco Bell plans to add more Live Más Café units to its storebase, expanding its capacity to test and refine new drinks and draw lessons from consumer reactions.
In addition to a beverage test menu, the beverage-based spinoff will grow its Southern California footprint, enter the Indianapolis market and open a flagship Café on the Las Vegas Strip according to the press release. The Indianapolis market entry will start with two company-operated stores and one franchised location.
The chain is also evaluating how to expand successful Live Más Café products to markets outside the U.S.
Already, the few dozen Live Más Café stores have sold 1.3 million beverages and tested at least 24 new drinks, Taco Bell said. The experimental units have “have delivered favorable transaction growth” in the last year, the chain said.
Across these tests, the morning and afternoon have been the strongest performing dayparts, indicating that test drinks from the concept could help the brand improve its performance outside of the lunch and dinner meal periods.
Yum Brands has historically used spinoff locations, like the Taco Bell Cantina, to generate buzz and test new menu items, helping it find products that work for its LTO-heavy menu innovation strategy.
Other major QSR chains are also looking for ways to expand their drink offerings and improve sales during quiet dayparts. Taco Bell’s sister brand KFC recently opened a new store, dubbed Open House, to show off and test elements of its brand turnaround, including premium beverages like boba refreshers and iced lattes.
But premium beverage plays are not a surefire sales win. McDonald’s used insights from its short-lived CosMc’s spinoff to develop a new slate of dirty sodas and premium drinks. Those beverages were complex enough to require adding a new position in the back of house, and gummed up the brand’s operations, contributing to its recent traffic shortfall.
