McD’s Wants Consumers to Smell/Drink Its Organic Coffee
By George Anderson
Make no beans about it. There’s a coffee war brewing in the foodservice world and the battlefield is New England.
McDonald’s made clear its intention to vie with Dunkin’ Donuts, Starbucks and any other company that sells coffee with the announcement the fast food chain will replace all the coffee it currently sells in its restaurants in the region with Newman’s Own Organics Blend, made by Green Mountain Coffee.
Steve Kerley, McDonald’s vice president of operations in New England, told The Boston Globe, “We certainly hope to drive customers into the restaurant more frequently, and if we see some of our competitors’ customers, we’d have no problem with that and welcome them with open arms.”
John Glass, an analyst for CIBC World Markets, said McDonald’s is simply following the dollars in foodservice.
“The coffee market in the United States is the fastest-growing segment within fast food,” he said. “McDonald’s recognizes this and wants to capitalize on it. It’s surprising it’s taken the company this long.”
Skip Weldon, field marketing director for the Northeast for New England-based Dunkin’ Donuts is confident of the chain’s ability to hold its own in the coffee wars. “Our customers buy Dunkin’ Donuts coffee for both the quality and value. For us, a great value means offering the highest-quality products at an affordable price.”
McDonald’s prices will be competitive to its coffee-brewing rivals. A 12-ounce coffee costs $1.19 compared to Dunkin’ Donuts’ 10-ounce ($1.46) and Starbucks’ 12-ounce cup ($1.58).
Rick Peyser, a spokesperson for Green Mountain, said the quality of the new coffee will “easily enable McDonald’s to compete with other outlets in New England. The McDonald’s
franchisees are thrilled to provide their customers with a coffee experience that will be very, very competitive.”
Moderator’s Comment: Will McDonald’s elevate its reputation in coffee and its business in the process? Do you see the move to its new coffee blend as
an indication the chain is looking to upgrade its menu quality across-the-board?
McDonald’s has a number of things going for it in this move.
- It will offer a significantly better-tasting cup of coffee.
- The coffee will be identified with a regional company – Green Mountain.
- It will be associated with a good cause – Newman’s Own.
- It’s prices will be lower than the competition.
- All of the above will create trial. If number one holds up and McD’s doesn’t find a way to brew the flavor out of the coffee, then it will get repeat
business and build up word-of-mouth buzz.