McDonald’s Has a Product Strategy. Taco Bell Built a Brand Asset.

McDonald’s has entered the specialty beverage arms race with its new Red Bull Dragonberry Energizer. The launch makes commercial sense, but it also raises a more important marketing question: Are you creating demand for your brand, or simply satisfying demand that already exists?

That distinction is at the heart of a criticism from former Taco Bell CEO Greg Creed, who points to Baja Blast as an example of what McDonald’s could be missing.

McDonald’s is responding to a major consumer trend. Energy drinks, refreshers, specialty sodas, cold foam and increasingly elaborate beverage combinations have become important growth opportunities across fast food and beverage brands.

The strategy is logical. Specialty drinks can encourage additional visits, create new consumption occasions and generate attractive margins. Partnering with an established brand like Red Bull also gives McDonald’s immediate credibility in the energy category.

But there’s a strategic weakness.

A trend is not the same thing as differentiation.

Red Bull Dragonberry Energizer combines an established energy drink with a distinctive flavor and McDonald’s execution. It may be a successful product, but the underlying concept is relatively easy for competitors to imitate.

That is where Baja Blast becomes an important case study. Baja Blast wasn't simply a new flavor of Mountain Dew. It became closely associated with Taco Bell. The distinctive name, color, flavor and exclusive positioning transformed the product from a menu item into a recognizable brand asset.

That’s the difference between product innovation and brand innovation.

Product innovation asks: "What can we create that consumers will want?" Brand innovation asks: "What can we create that consumers will associate with us?" The strongest brands go one step further: "What can we create that consumers can only meaningfully associate with us?"

That’s where brand equity starts to compound!

For McDonald’s, the opportunity isn't necessarily to stop creating trendy beverages, it’s to make those trends unmistakably McDonald’s.

The company has enormous existing brand equity to draw from. Its characters, nostalgia, iconic products, Happy Meal, fries, breakfast and cultural history all represent potential ingredients for proprietary experiences that competitors cannot easily replicate.

The lesson extends far beyond fast food. Brands constantly face pressure to participate in whatever consumers currently want. AI. Personalization. Short-form video. Creator marketing. Experiential campaigns. New product categories.

Participation can keep a brand relevant, but relevance alone doesn't make a brand distinctive.

If competitors can copy your product, campaign, format or flavor within six months, you may have created something consumers want without creating something they associate with you.

The goal of innovation should be bigger than simply giving people something new to buy.

Create something people remember. Create something they seek out. Create something they associate with you before they even see the logo.

That's when a product stops being a SKU and starts becoming brand equity.

And that's the real lesson behind Baja Blast.