NEW YORK -- Taco Bell is testing a new restaurant that isn't focused on tacos.
The newly opened concept in San Diego is called the Live Más Café, featuring a beverage-centric menu that includes milkshakes, coffees, fruity iced drinks and a take on a dirty soda trend with its trademark Mountain Dew Baja Blast.
The prototype resembles a CosMc's, the year-old, McDonald's-owned concept that leans heavily into specialty beverages and snacks targeted at younger customers. For Taco Bell, the cafe marks an entrance into a category not only dominated by stalwarts like Starbucks and Dunkin' but also by quickly expanding chains Dutch Bros, Swig and Scooter's Coffee.
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"Taco Bell, like a lot of quick-service restaurant brands, recognizes the large opportunity in beverages," according to R.J. Hottovy, head of analytical research at Placer.ai. "Beverage chains have been among the fastest-growing chains in the restaurant industry from a visitation standpoint the past two years." He told CNN that beverage-led concepts attract younger consumers, and it could be a way for Taco Bell to "expand and diversify its audience."
Taco Bell said in a statement that the new model is its "plan to disrupt the beverage industry" and features an "innovative" lineup that has become a larger part of the company's focus. In the past few years, it has added frozen coffee and shakes called Chillers; Agua Refrescas, a green tea-based drink with fruit pieces; and new cold brew coffee options in partnership with Beekeeper, all of which are on the café's menu.
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Taco Bell is the strongest performer of Yum Brand's portfolio and often outperforms sister brands KFC and Pizza Hut. The chain reported a 4% increase in same-store sales in Yum's most recent earnings quarter, buoyed by popular menu items like a new value meal and the Big Cheez-It.
Live Más Café was created with Diversified Restaurant Group, one of Taco Bell's largest franchisees with nearly 400 locations, which also helped create its popular Cantina concept a few years ago.
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