Pepsi makes bold move to take on Coca-Cola

For more than a century, Pepsi’s biggest rival was easy to identify.

Every new product launch, marketing campaign, and distribution battle ultimately came back to Coca-Cola (KO), creating what became known as the “Cola Wars.”

Today, however, Pepsi faces a growing threat from an unexpected corner of the beverage industry.

Some of the world’s largest restaurant chains are rapidly transforming drinks into one of their most important growth businesses, investing heavily in customizable beverages, specialty flavors, and premium drink experiences that compete for the same customers’ attention.

The shift is reshaping an industry long dominated by traditional soda companies.

Fast-food giants such as McDonald’s, Chick-fil-A, and Taco Bell have spent the past several years expanding their beverage offerings as consumers seek more personalization, variety, and experience-driven purchases. At the same time, restaurants are pursuing higher-margin menu categories to drive traffic and profitability in a challenging economic environment.

As competition intensifies, beverage companies are being forced to rethink how they engage consumers beyond the typical soda fountain.

That may help explain why Pepsi has unveiled a new platform to turn beverages into a more interactive and customizable experience.

Pepsi launches “House of Treats” beverage platform

PepsiCo’s (PEP) Pepsi Global has introduced Pepsi “House of Treats,” a crafted beverages platform designed to deliver customizable, experience-focused drinks across key Away From Home channels beginning in 2026. 

The platform combines multisensorial beverage experiences with large-scale customization capabilities, targeting growing consumer demand for flavor experimentation, personalized drinks, and what the company describes as “treatanomics,” the trend of customers seeking affordable indulgences.

The menu features unique flavor profiles, including Yuzu Lychee, White Peach Sangria, and options with a hint of spice, reports TrendHunter. With premium offerings such as “dirty soda,” House of Treats represents a step up from the Coca-Cola Freestyle machine, which offers only basic flavor mixing.

Pepsi House of Treats will be available exclusively through select PepsiCo entertainment and hospitality partners, including cinemas, stadiums, restaurants, and live events.

This initiative is part of Pepsi’s broader Meaningful Food and Drink Experience strategy. According to the company, the platform enables high-volume venues to serve visually striking, customizable beverages while maintaining operational efficiency and consistent product quality.

Industry data and recent product launches suggest consumers increasingly view beverages as an experience rather than a simple purchase, reflecting a broader shift in the food and beverage industry.

“The role of beverages is evolving from functional refreshment into a much more experiential and culturally-relevant occasion,” said PepsiCo CEO of International Beverages Eugene Willemsen in a statement.

“Consumers are increasingly seeking personalized, elevated experiences that feel memorable and worth sharing. Pepsi ‘House of Treats’ is designed to meet that shift. Bringing together flavor, customization and our broader portfolio in a single scalable platform for Away From Home environments, it gives our partners a simple way to unlock premium growth and operational efficiency while delivering standout experiences that drive stronger engagement and repeat demand.” 

The platform’s first activation launched in June at a Pepsi MAX SXSW event in London. Additional rollouts are scheduled later this year in Poland, Romania, and the Czech Republic, along with expansion in more U.K. venues and PepsiCo-operated beverage locations.  

Restaurants are turning beverages into a major business

Pepsi’s latest move comes as restaurants continue investing aggressively in beverages, a category many operators view as a significant long-term growth opportunity.

McDonald’s has spent several years expanding its beverage strategy as part of a broader investment in the category. The company grew its coffee and specialty drink offerings through McCafé, while CosMc’s served as a testing ground for beverage-focused concepts before the chain closed all locations in 2025.

In May, McDonald’s introduced six new beverages, underscoring the chain’s continued focus on drink innovation and menu expansion.

Here’s some of my previous coverage on beverage menu innovations:

• Chick-fil-A launches a new drinks-based restaurant brand
• Taco Bell makes menu move to take on McDonald’s and Starbucks
• Starbucks, Dunkin’, and Luckin push products outside of coffee

Chick-fil-A has broadened its beverage lineup with Frosted Sodas and Floats, seasonal flavor varieties, and customization options, including Sunjoy, Lemonade, and Sprite-based drinks. The company also launched Daybright Coffee & Refreshments, a beverage-focused concept in Georgia last year.

Meanwhile, Taco Bell continued experimenting with specialty drinks through its Taco Bell Live Más Café initiative and limited-time beverage offerings as part of its goal to build a $5 billion beverage business by 2030.

Why beverage innovation matters

The industry’s growing focus on beverages is largely driven by economic factors.

Restaurants typically operate on relatively thin net margins, often ranging between 3% and 6%, according to the latest industry data from Toast. 

Drinks, however, can generate significantly higher margins than food items due to their comparatively low ingredient costs and premium pricing.

Beverage gross margins can range from 60% to 80%, while food margins are generally lower at approximately 65% to 70%, according to KitchenNmbrs. In many cases, a drink that costs only a few cents to produce can be sold for several dollars.

That profitability makes beverages one of the most attractive growth opportunities for restaurant operators seeking to improve financial performance without significantly increasing operational complexity.

“Specialty beverages offer a way to refresh the value proposition — not just in terms of cost, but in experience, convenience, and customization,” said Rich Products Senior Customer Marketing Manager Alyssa Barrett on QSR Magazine.

As competition intensifies across the beverage sector, specialty drinks are increasingly viewed as a strategic growth engine. Beyond generating higher margins, they can help brands diversify revenue streams, attract new customers, expand into additional dayparts, increase customer visit frequency, and strengthen long-term loyalty.

Consumer demand appears to support that strategy. According to beverage technology company Botrista, 60% of global consumers prefer customizable drinks, highlighting why beverage brands and restaurant operators are increasingly investing in flexible drink programs.

For both manufacturers and restaurants, the battle to capture a large share of the growing specialty drink market is becoming increasingly important.

Whether House of Treats gains meaningful traction remains to be seen, but the launch highlights how beverage companies are adapting to a market increasingly shaped by customization, experience-driven consumption, and growing competition from restaurant operators.

Related: Starbucks brings back viral drink after 7 years, adds new item