The Rise of Beverage-First QSR Tenants

Chris Rodriguez

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Over the last five years or so, a new group of tenants has been reshaping retail pads and drive-thru corners: beverage-first QSRs. Brands like Dutch Bros, Swig, and 7 Brew have scaled small-format drive-thrus into daily-use traffic engines, leaning on high-frequency orders, fast throughput, and simple menus that travel well. The rise of this new category means increased competition for new pads and provides increased tenant options for smaller or split pads.

Why Beverages Work

Throughput over footprint. Most locations run compact buildings with dual lanes, prioritizing car count and speed of service.
Menu simplicity. Fewer prep steps and SKUs let teams push peak-hour volumes without kitchen bottlenecks.
Margin profile. Drinks carry lower COGS than food-heavy menus, so each incremental car matters more to the P&L.
Habit frequency. Morning coffee, afternoon pick-me-ups, and “treat runs” create multiple daily demand windows.

Legacy Tenants Taking Notice

The surge in beverage-first concepts hasn’t gone unnoticed. For years, legacy QSRs treated drinks as add-ons. Now, with Dutch Bros, Swig, and 7 Brew proving that beverages can anchor entire businesses, established players are making their own moves.

Chick-fil-A’s Daybright

The biggest signal came in September 2025, when Chick-fil-A announced it is launching Daybright, its first-ever beverage-driven concept.

Location: Opening this fall in Hiram, Georgia, about 30 miles outside Atlanta.
Who’s Behind It: Developed under Red Wagon Ventures LLC, Chick-fil-A’s innovation arm.
Focus: Specialty coffees, smoothies, and cold-pressed juices, paired with food items not part of the Chick-fil-A core menu.
Why It Matters: Chick-fil-A is one of the most disciplined operators in QSR. Their decision to test a standalone beverage concept validates the category’s economics and will be closely tracked by competitors and landlords alike.

Other Legacy Beverage Moves

Taco Bell Live Más Café. Launched in late 2024 inside select San Diego-area restaurants. Taco Bell anticipates having approximately 30 Live Más Café locations by the end of 2025. The upgraded cafés feature expanded drink programs and alcoholic beverages, elevating Taco Bell’s positioning as a more comprehensive beverage destination.
McDonald’s CosMc’s. Debuted in late 2023 around Chicago and Texas as a small-format, specialty-beverage concept. In June 2025, McDonald’s closed CosMc’s, folding many best-sellers into market tests at core restaurants and forming a dedicated beverage innovation team.
Sonic Drive-In. Long before the current wave, Sonic relied on slushes, limeades, and custom sodas as its differentiator, demonstrating that drinks can drive traffic at scale.
McCafé (Legacy Program). McDonald’s McCafé branding, while not a standalone concept, laid the early groundwork for coffee positioning inside a food-heavy brand.

Growth and Performance

The growth trajectories of beverage-first operators have been some of the fastest in the QSR sector.

Sources: Dutch Bros SEC filings and news releases; NRN, Technomic, ScrapeHero, and company press for 7 Brew and Swig.

What This Means for Retail Real Estate

Increased competition for drive-thru pads. Beverage-led tenants are increasing competition for high-visibility corners and dual-lane layouts. Owners with smaller buildings on smaller parcels will see an increase in leasing activity and upward pressure on rents.
Small-footprint backfills. These concepts can split pads or replace underperforming fast-casual QSRs with minimal kitchen needs.
Capital markets attention. Investors are widening their criteria to include beverage-first chains, thanks to strong unit economics, new-unit productivity, and emerging brand recognition. The brand loyalty being built by these brands amongst Gen Z can;t be ignored.
Menu innovation shifts. Success is driven by drink innovation cycles - energy blends, seasonal coffee, specialty sodas - rather than food launches.

When I look at the rise of beverage-first tenants, the story is bigger than a few fast-growing brands—it’s about a land grab by these tenants fighting to secure prime retail drive-thru locations. Their ability to generate high AUVs and succeed across diverse markets has caught the attention of investors and developers.

Just as express car washes have become commonplace as single-tenant net lease (STNL) assets that trade similarly to fast food properties, beverage-first concepts are gaining momentum and acceptance as viable STNL investments. For years, Starbucks was the only true beverage-driven STNL option that consistently traded nationwide - the best of breed, if you will. In fact, Starbucks, which was originally a coffee shop, was the catalyst for these new players when it expanded quickly into cold drinks, which now account for 75% of its sales.

Today, investors and developers have multiple choices - Dutch Bros, 7 Brew, Swig, and others popping up daily - filling that role in markets across nearly every state. Investors have taken notice as evidenced by the growing number of beverage-first QSR properties offered for sale in the STNL marketplace.

Bad Timing for Starbucks

Starbucks is in a tough spot right now. Posting letters in store windows announcing store closures without first notifying landlords is a bad look. Saying this is merely the first wave of closures without any indication of which stores may be on the chopping block does not inspire confidence in the marketplace. I personally know developers who have stated that they will no longer work with Starbucks. Just yesterday a developer told me they had just finished construction on a building and Starbucks refused to accept delivery, instead offering a few years rent to terminate. That doesn't come close to mitigating the over $1,500,000 the developer spent constructing the building. I heard Starbucks has taken this position on multiple sites. Not good at all.

As new concepts emerge and display strong growth and AUVs, developers will naturally gravitate towards these new tenants. Why wouldn’t they go in a different direction when Starbucks is signaling to the marketplace that they can’t be trusted as an investable tenant? I predict that Dutch Bros. will become the new Belle of the Ball in the beverage category. All reports are that they are great to work with, while I can personally attest to the fact that Starbucks can be a nightmare to work with from lease negotiations all the way through entitlements and delivery of possession.

Make no mistake about it, Starbucks isn’t going anywhere, but its days as the top dog in the beverage category appear to be numbered.

Closing Thoughts

Not all Starbucks landlords will get left holding the bag. It will certainly be painful for many landlords, especially those who thought it a good idea to pay $4,000,000 for an 800 square foot shipping container building on a 12,000 square foot parcel. Those guys are dead in the water. Who could have seen that coming? The answer is anyone who knows anything about real estate fundamentals.

Many of these new beverage-first concepts will not live up to the hype. Chick-fil-A, Taco Bell, and McDonald's have massive war chests of cash to test out new concepts with little-to-no risk. The new guys are 100% reliant on their concepts working perfectly out of the gate. Swig puzzles me to no end. They sell what is widely understood to be one of the single most unhealthy products in the world. How does that make sense? Can a soda concept really have operational longevity? I would caution any investor considering dropping millions of dollars on an asset leased to Swig. The lesson here is that core real estate fundamentals will always be the most important aspect of assessing an investment opportunity, especially when considering relying on a new concept as your sole source of income. There will be upward pressure on rents as competition for sites increases, making each and every one of these investments more and more risky. Never buy the tenant - the asset is the land. Be cautious and be diligent. The shiniest penny does not always sparkle forever.

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