McDonald’s Just Yanked the Cord on Its TikTok Drink Experiment... And Shareholders Are Relieved

Sometimes in life you’ve just gotta look yourself in the mirror, take a deep breath, and say: “Welp, that didn’t work” and throw in the towel. That’s exactly what McDonald’s is doing with CosMc’s… its Gen Z-targeted, beverage side hustle that landed with all the grace of a fart in church.

By the end of June, all five remaining CosMc’s locations (four in the Chicago area and one in Texas) will close. Less than two years after launch, the project is officially being mothballed and filed under “expensive learning experience” (right next to Crystal Pepsi, New Coke, and Google+ on the corporate failure shelf).

McDonald’s launched CosMc’s in December 2023 with a clear mission: break into the fast-growing specialty beverage market, estimated to be worth more than $100 billion annually. Competitors like Dutch Bros., Scooter’s Coffee, and Swig had built loyal followings with hyper-customized drinks and viral TikTok marketing, and McDonald’s wanted a piece of that high-margin pie (because let’s face it… $6 for flavored sugar water beats flipping cheeseburgers all day).

CosMc’s was intentionally designed to operate outside of the traditional McDonald’s framework. Stores had unique branding, streamlined drive-thru lanes, and a pared-down food menu so employees could focus almost entirely on drinks. The offerings included vibrant, Instagram-ready concoctions like “sour cherry energy slushes,” “blueberry ginger boost,” and “turmeric spiced lattes” topped with popping candy or rainbow sprinkles.

But there was one small problem: turns out, most people just wanted… regular drinks. Customers weren’t remixing turmeric slushies or asking for five pumps of glitter syrup. They stuck to safe, basic orders. So all those wild ingredients and customization options were a huge waste of money (kind of like that battery powered weed eater I bought).

And then they blamed the economy. McDonald’s has had two straight quarters of declining sales. I guess they didn't think about it beforehand, but people are pulling back on $6 sugar bombs when gas is $4 a gallon and rent eats up half their paycheck.

To be fair, CosMc’s wasn’t a total flop. It was a sandbox… a test kitchen where Mickey D’s could experiment with bold flavors, new tech, and futuristic branding without screwing up the Big Mac assembly line. They tested fancy drive-thru lanes that prioritized simpler orders. They played with weird flavors (prickly pear slushy with popping candy, anyone?). And they learned a ton.

Now, the experiment is ending… but not without some salvage. On a recent earnings call, CEO Chris Kempczinski confirmed that “CosMc’s-inspired” beverages will start showing up in regular McDonald’s locations later this year. So while the alien mascot is headed back to the mothership, don’t be surprised if turmeric lattes show up next to your fries.

McDonald’s stock is still trading just under its March peak of $321.29, and analysts (myself included) aren’t sweating it. The street has a price target around $334.74, but honestly, I wouldn’t be surprised to see it break that if international momentum holds.

Yes, U.S. same-store sales dipped 0.2% last quarter, but the real story is overseas. International markets were up 4.6%, and they’re carrying the weight right now. Combine that with $8 billion in digital sales and a loyalty program that’s blown past 150 million users, and you’ve got serious margin potential. That’s why I still like the name here… especially with the new $5 value meal rolling out this summer to patch up the U.S. softness. So yes, CosMc’s was a rounding error, but still a blip on the chart.

Stocks.News has positions in McDonald’s and Dutch Bros.