McDonald's Builds Out Beverage Strategy: Will It Aid Traffic Rebound?

McDonald’s Corporation MCD is sharpening its focus on the high-margin beverage category in a bid to reinvigorate traffic and elevate average check size across its global system. Drawing key insights from its CosMc’s pilot concept, the company is moving swiftly to test an expanded beverage lineup in existing U.S. restaurants later this year, aiming to unlock incremental sales, deepen consumer engagement and fortify its competitive moat in the quick-service space.

During first-quarter 2025, management highlighted beverages as one of three core category growth pillars, alongside beef and chicken. The company’s new organizational structure, which includes dedicated category leaders, is expected to accelerate product development and facilitate cross-functional coordination across the supply chain, marketing and restaurant execution.

Management noted that insights from CosMc’s — including the finding that 80% of customers preferred preset beverage recipes with minor customization — alleviate prior concerns around operational complexity.

McDonald’s sees significant whitespace in the beverage segment, particularly in areas such as cold beverages, energy drinks and customizable offerings. The company currently captures an estimated 10% of the U.S. coffee market, but management believes there is further upside. MCD is optimistic and anticipates integrating CosMc’s learnings into its core restaurants to drive growth.

Competition in the Beverage Market

As McDonald’s intensifies its efforts in the premium beverage category, competitive pressures are mounting from well-established players like Starbucks Corporation SBUX and Dutch Bros Inc. BROS.

Starbucks, through its “Triple Shot Reinvention” strategy, continues to dominate the U.S. specialty beverage market. Cold beverages now account for more than 75% of total drink sales at its U.S. company-operated stores, with personalization and mobile ordering serving as key enablers of throughput and engagement. Starbucks is also optimizing operational efficiency through store-specific order sequencing algorithms and labor enhancements, which have shortened average wait times while maintaining high customer satisfaction. The brand’s scale, digital ecosystem and first-mover advantage in customized cold drinks give it a strong defensive moat in the beverage space.

Dutch Bros, meanwhile, is positioning itself as a fast-moving disruptor with a focus on speed, customer connection and menu innovation. In first-quarter 2025, the company reported a 10% year-over-year increase in same-shop sales and a 29% jump in total revenues. The brand’s drive-thru model and loyalty-led digital strategy continue to fuel strong morning daypart performance. Dutch Bros also maintains a streamlined operational structure focused exclusively on beverages, giving it a distinct edge in execution and service.

The Zacks Rundown for MCD Stock

McDonald’s shares have lost 4% in the past three months against the industry’s 4.5% growth.

MCD Three-Month Price Performance

From a valuation standpoint, MCD trades at a forward price-to-sales ratio of 7.86, significantly higher than the industry’s 4.02.

The Zacks Consensus Estimate for McDonald’s 2025 and 2026 earnings per share implies a year-over-year uptick of 4.5% and 7.8%, respectively. The estimate for 2025 has been northbound in the past 60 days.

McDonald’s stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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