The news: McDonald’s is expanding its beverage lineup, adding refreshers and crafted sodas—such as Dirty Dr Pepper and a Mango Pineapple Refresher—to its US menu this month, with plans to introduce a Red Bull Dragonberry Energizer later this year, per The Wall Street Journal.

Why it matters: McDonald’s has been trying for years to capture a larger share of the fast-growing beverage market, which it says represents a $100 billion global opportunity. Those efforts included its beverage-focused spinoff CosMc’s, where it spent nearly two years testing consumers’ appetite for brightly colored, sweet drinks like lattes, slushes, and frappés.

The company is entering an increasingly crowded space, competing with fast-growing Dutch Bros, emerging chains like Swig, and established players including Starbucks, Taco Bell, and Sonic. However, McDonald’s plans to compete on price by undercutting those rivals to drive traffic.

That approach fits McDonald’s core value proposition. The company plans to use beverages to lure consumers into stores or drive-thrus, where it can then leverage its increasingly bifurcated menu that pairs low-cost items with premium offerings like the Big Arch burger to broaden its appeal and boost overall ticket size.

Implications for restaurant chains: McDonald’s push into crafted sodas and energy drinks intensifies competition in one of the fastest-growing, highest-margin categories. By playing up price, McDonald’s risks commoditizing the types of trendy drinks that chains like Dutch Bros and Swig have used to stand out.

The strategy echoes McDonald’s McCafé playbook. After introducing espresso drinks nationwide in 2009 (and refreshing them in 2017), McDonald’s positioned itself as a lower-priced alternative to Starbucks. In response, coffee chains leaned into premiumization—emphasizing unique beverages and higher-quality ingredients to justify higher prices. A similar dynamic is likely to emerge in beverages.

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