Macca’s and KFC battle it out with biggest product change in 30 years

Australia’s favourite fast food giants are battling it out once again but this time, it has nothing to do with food.

Instead, drinks are the new frontier in an increasingly competitive market. McDonald’s has just dropped its most significant McCafé beverage overhaul in 30 years, while KFC is hot on its heels, quietly expanding a brand-new drinks trial across a second state.

Macca’s launched its new beverage lineup nationwide on July 15 after a successful trial in Victoria and Queensland, leaving customers spoiled for choice.

The range includes some familiar and popular drinks including Refreshers, Crafted Sodas, Energisers and an array of Iced and Cold Coffees, and marks the franchise’s biggest beverage drop since McCafé opened in Australia in 1993.

KFC has countered with Kwench, a trial range featuring 10 custom drinks spanning Sparkling Lemonades, Boba Refreshers, Krunch Shakes and Frozen Spiders, also leaning on current trends.

A KFC Australia spokesperson confirmed the expansion: “Following successful trials in Wollongong and Cairns, we’re excited to have recently launched Kwench to 16 new pilot stores in SA and NSW. Watch this space.”

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Why the pivot to drinks

Griffith University consumer expert Gavin Northey told nine.com.au that during trials of new drinks in Victoria and Queensland, McDonald’s found “Australian consumers have shifted and are now much more willing to purchase drinks as standalone items”.

“So, given the change in consumer attitudes and wants, you can totally understand why McDonald’s and other fast-food providers are focusing on drink,” he said.

Consumer psychologist and Thinkerbell founder Adam Ferrier predicted success for the new range.

“McDonald’s has always had amazing drinks, which are gold-standard fast food drinks, and their new line is building off prior successes while chasing an ever-growing segment of the market,” he told nine.com.au.

Northey said offering a broad range of products by launching 10 new drinks meant a larger segment of the overall population could find a beverage that suited their needs

“But what’s more interesting is that McDonald’s own research tells us that even though we are in the midst of a cost-of-living crisis, people are still willing to buy a ‘little treat’ each day. So according to McDonald’s, ordering a drink is not just about quenching our thirst, but about ‘curating vibes’ during the day.”

As for KFC, Ferrier saw it as a major growth play.

“Over the last 10 years, KFC has been extremely consistent, strong marketers focusing on ‘pride in the fried’,” he tells nine.com.au.

“It makes perfect sense for the brand to do this. This is especially the case with McCafé being an Australian invention; for whatever reason, innovation and McDonald’s go hand in hand.

“[KFC] are likely trying to build new associations with other meal and snacking occasions beyond chicken, hence the drinks.”

Both menus lean heavily into trends captivating younger consumers.

Sparkling lemonades and fruit refreshers have already proven to be massive hits for Starbucks, while Australia’s obsession with bubble tea, fuelled by brands such as Chatime, Gong Cha and Sharetea, shows zero signs of slowing down.

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Northey explained: “It’s not just KFC, but every major player in the fast food market is hyper-focused on beverages right now.

“Part of the reason is that these little daily ‘treats’ that consumers buy become habits, and habits generate brand loyalty, and brand loyalty delivers long-term competitive advantage to the brand.

“So from a consumer standpoint, we think they’re all just competing for our $6 today, but in reality they’re competing for our long-term brand loyalty and a lifetime of purchases.”

Ferrier added: “Gen Z loves spending money on experiential food, like Yo-Chi, things that have a sense of occasion to them.”

“These kinds of drinks keep them entertained until they’re old enough to go to the pub.

“Drinks with a sense of theatre and occasion can also create entirely new visiting occasions for fast-food restaurants, where people come in for a shared experience without necessarily buying a meal.”

Northey added: “Recent modelling from Flinders University predicts Gen Z will be around 18 times more likely to abstain from alcohol over their lifetimes than Baby Boomers.

“But the interesting thing about Gen Z is they love cold drinks, like iced coffee, smoothies and frappes. In fact, these kinds of cold drinks feature in 56 per cent of Gen Z’s orders, whereas Baby Boomers only order cold drinks 21 per cent of the time.

“For brands, that is critical information, because the cold drinks are usually higher priced and offer higher margins than hot beverages. So strategically, brands see Gen Z as the engine room for growth.” 

The other battleground: breakfast

The beverage war comes as KFC takes aim at another Macca’s stronghold: breakfast.

Following a successful trial at Sydney Airport, KFC confirmed plans to roll out its new morning lineup, dubbed “Morning Meals,” to multiple locations nationwide, putting it head-to-head with McDonald’s iconic breakfast.

A KFC spokesperson told nine.com.au: “Following the finger lickin’ good response from our Sydney Airport Morning Meals trial, KFC is continuing to work with our franchise partners to bring Morning Meals to more restaurants across the country, giving more fans the chance to start their day the KFC way.

“Keep your eyes peeled for where Morning Meals might pop up next, because Aussies know there’s no wrong time to go full chicken with KFC.”

Specific launch dates and locations for KFC’s new morning lineup have not yet been released.