Operations
Margaritas, in particular, have been a key driver in Taco Cabana’s growth, proving that even in a fast casual setting, customers are eager for a refreshing adult beverage.
Photo: TC
June 25, 2025 by Cherryh Cansler — Editor, FastCasual.com
Fast casual restaurants are recognizing the significant revenue potential in offering alcoholic beverages, a trend exemplified by Taco Cabana, which has seen check averages rise by as much as 20% since expanding its alcohol strategy. Margaritas, in particular, have been a key driver in this growth, proving that even in a fast casual setting, customers are eager for a refreshing adult beverage.
“Alcohol has been part of Taco Cabana’s DNA since its early days, with margaritas and beer long serving as key differentiators,” Ulyses Camacho, president and COO of Taco Cabana, said in an email interview with Fast Casual.
That foundation allowed the brand to capitalize on regulatory changes during the pandemic in 2021, which permitted alcohol to-go sales in Texas. Taco Cabana swiftly adapted, broadening its margarita flavor lineup, introducing gallon-sized options and integrating its beverage menu into its mobile app, website and third-party delivery platforms.
That decision has made a substantial impact. Drive-thru checks alone increased by over 17% during that period, with alcohol playing a major role. The brand serves approximately 90,000 liters of tequila annually, a number that consistently grows each year, but Camacho said the brand always prioritizes safety and compliance. Alcoholic beverages ordered via drive-thru are packaged in sealed, tamperproof cups with secure lids and clear tamper indicators, for example. Employees verify ages, label packaging clearly and adhere to all local and state laws.
Why now?
The decision by fast casual establishments to offer alcohol is a growing trend as the alcoholic drink market is projected to reach over $261 billion this year, with 48% of that spent in bars and restaurants. Operators often see a 60-70% profit margin on alcoholic beverages, and may use cocktails as a point of differentiation in a competitive market, allowing fast casuals to compete with full-service restaurants and attract a broader customer base, especially millennials, who often prioritize alcohol when choosing a dining experience.
Fuzzy’s Taco is another fast casual embracing alcohol, testing a full-service location, dubbed Fuzzy’s Tacos and Margs, in Sugarland, Texas.
“Sugar Land is helping us find that sweet spot between fast casual and full-service, with a streamlined menu, bold new taco creations, and a margarita lineup that puts our bar front and center,” Patrick Kirk, president of Fuzzy’s, said in an email interview.
The Happiest Hour
Taco Cabana has also implemented a successful $2 Happy Hour, a value-driven initiative aimed at increasing traffic during slower periods. Camacho said the program is “margin-managed and supports full-price performance.” Its recent partnership with Casa Alta Tequila, a premium small-batch tequila, further aids in maintaining margin integrity while ensuring a high-quality guest experience.
“To us, value isn’t about prices — it’s about delivering a compelling experience that keeps guests coming back, again and again,” Camacho said. The Casa Alta Tequila, produced in Jalisco, Mexico, is additive-free, sustainably produced and features bright, fruity notes that complement Taco Cabana’s menu.
While fast casuals are not looking to replicate a full bar experience, they are creating opportunities for “small social moments.” Camacho said Taco Cabana aims to offer guests a reason to stay longer with “great drinks, good food and a relaxed atmosphere.”
Taco Cabana is looking forward to more beverage innovation; it recently launched the Cholula Rita, a limited-time margarita made with Casa Alta Tequila and Cholula Chili Lime Hot Sauce. The team is also planning the next margarita flavor for the Texas summer.
“Partnering with Cholula allows us to bring their authentic Mexican flavor to an entirely new experience — one that perfectly complements our delicious food,” Camacho said. “The generations-old family recipe that continues to feature arbol and piquin peppers adds a new dimension to the classic margarita. It’s the perfect fusion of heat and refreshment, and we can’t wait for our customers to experience this one-of-a-kind creation.”
