McDonald's to expand flavored coffee sales to restaurants, but not nationwide (yet)
McDonald's will no longer limit its flavored coffee to just supermarkets. The fast food chain has started to offer brewed flavor coffee at restaurants in at least one US market, though it isn't clear if this will be extended nationally.
A customer using his mobile phone is seen next to a McDonald's logo at a McDonald's store in Tokyo July 22, 2014. On the hunt for incremental customer traffic, McDonald鈥檚 is looking at flavored McCaf茅 hot coffee
Yuya Shino/Reuters/File
On the hunt for incremental customer traffic, McDonald鈥檚 is looking at flavored McCaf茅 hot coffee. The burger chain has served flavored iced McCaf茅 coffees since 2007, a year after it introduced its Premium Roast coffee, and it offers French Vanilla and Hazelnut flavors in the bagged coffee it sells in supermarkets in collaboration with Kraft. But hot coffee options in its restaurants are limited to regular and decaf.
However, in at least one U.S. market the chain is offering brewed Caramel, Hazelnut and French Vanilla McCaf茅 coffees, a McDonald鈥檚 spokesperson confirmed to BurgerBusiness.com. The coffees are offered for $1.39 for any size cup. A TV commercial supports. The spokesperson said flavored coffee is a Local Option menu item being promoted in one market but the beverages are not now being introduced nationally.
The scope of the sales opportunity flavored coffees present makes them an appealing product for McDonald鈥檚 to consider.
Packaged Facts puts 2014 retail and foodservice coffee聽聽at $48 billion, with foodservice accounting for 77% of that. In 2010, former McDonald鈥檚 CEO Don Thompson said coffee accounted for聽聽of U.S. sales, although it likely is larger now due to expansion of the McCaf茅 brand. But even 6% of McDonald鈥檚 2014 domestic sales of $35.4 billion is more than $2.1 billion, showing the drink鈥檚 importance.
When it introduced flavors of its VIA instant coffee in 2010, Starbucks聽聽the flavored-coffee market at $377 million and said 11% of American households purchase flavored coffee. McDonald鈥檚 would welcome as many of those consumers as possible.
鈥淲e鈥檙e enhancing the breakfast experience by creating more of a coffee culture through high-quality McCaf茅 products,鈥� Thompson told analysts during a quarterly earnings聽聽in January 2014, a year before Steve Easterbrook replaced him as CEO. 鈥淲e know that coffee drives the visits at our breakfast time,鈥� Thompson added. Breakfast accounts for an estimated 25% of the chain鈥檚 sales.
Competitors Dunkin鈥� Donuts and Starbucks sell some flavored hot coffees but other burger-menu competitors such as Burger King, Wendy鈥檚, Jack in the Box do not. Breakfast latecomer Taco Bell offers only a Cinnabon Delights coffee creamer to add to the Seattle鈥檚 Best coffee it serves
Meanwhile, CNBC聽聽on Friday that McDonald鈥檚 plans to increase the pre-cooked weight of its Quarter Pounder burger patty to 4.25 ounces from the current 4 ounces in order to give diners a 鈥渏uicier and more flavorful burger,鈥� according to internal documents reviewed by CNBC.