Fast-food joints jazz up drink menus for summer

Upscale offerings are on the docket for every major chain, indicating an industry-wide effort to improve margins.

By InvestorPlace May 3, 2011 10:31AM

McDonald's (MCD) has changed the fast-food industry in many ways since its first franchise location opened more than 50 years ago. One of its most recent contributions is the idea that a burger joint can be a specialty-drink powerhouse, too. A 2008 study showed that Mickey D's stores offering premium McCafe coffees generated 15% more revenue than a standard location.


So it's no surprise that every fast-food joint under the sun is trying to get in on the beverage biz. Specialty drinks are a high-margin business and are an easy way to experiment with creative new flavors to reach new customers.


The summer heat is a perfect occasion for testing these thirst quenchers, and a laundry list of quick-service restaurants are rolling out drinks that include a Double Stuff Oreo shake, frozen strawberry lemonade and new zero-calorie sodas. Here are some highlights:

  • Starting in June, 7-Eleven will reinvent its iconic Slurpee by rolling out cups with dual chambers, a high-tech valve and two straws that let you drink one or two Slurpee flavors at a time. Why choose between Bruisin' Berry or Sour Green when you can have both?
  • In May, McDonald's is rolling out frozen strawberry lemonade as its latest McCafe specialty drink. This comes after a previous summer launch of a new McDonald's smoothie menu.
  • Drive-in chain Sonic (SONC) has plans in May for a shake dubbed Double Stuff Oreo Blast. As you'll see, it looks like plain old Oreo shakes just don't cut it anymore.
  • Wendy's (WEN) sister restaurant Arby's is rolling out a Jamocha Oreo Shake in May. It's a twist on the current coffee drink with added chocolate cookies. Yum.
  • And while Arby's moves into coffee,  Dunkin' Donuts is moving the other direction -- into soft drinks. DD will roll out a Mountain Dew Coolatta, a frozen slush drink.
  • Starbucks (SBUX) knows its niche, however, and is bringing back its Mocha Coconut Frappuccino (starting today!) for a limited time.
  • In mid-June, Cold Stone Creamery will debut a Cake 'n' Shake premium drink made with cake-batter ice cream and yellow-cake pieces. Who says you can't have your cake and drink it too?

All of these drinks probably won't come cheap -- and that's the idea. As fast-food restaurants look to boost margins amid food price inflation, premium specialty beverages are the simplest way to "juice" the numbers.


Related Articles

1Comment
May 4, 2011 1:48PM
avatar
Cold Stone has had the Cake 'n' Shake for years.....
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
266
266 rated 2
485
485 rated 3
660
660 rated 4
586
586 rated 5
652
652 rated 6
640
640 rated 7
504
504 rated 8
289
289 rated 9
159
159 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.