Premium McCoffee Roll Out Plan

Discussion
Jan 10, 2005
George Anderson

By George Anderson


It’s not Harry Met Sally, but McDonald’s wants what Dunkin’ Donuts, 7-Eleven and Starbucks are having. That being success with premium coffee sales.


The fast-food giant has yet to make a formal announcement, but a report by USA Today says McDonald’s plans to test and then roll out premium coffee to all its restaurants in the U.S. by next year.


A spokesperson for the company, William Whitman, said, “Coffee has increased in popularity beyond a breakfast beverage. We see an opportunity to bring our customers a better-tasting product at a value price.”


David Palmer, analyst at UBS Investment Research, believes selling premium coffee could help McDonald’s attract more young mothers to its restaurants and, ultimately, could add two percent to the company’s sales.


Moderator’s Comment: What will it take for McDonald’s to achieve the type of sales success with premium coffee that others such as Dunkin’ Donuts, 7-Eleven
and Starbucks have had?


The USA Today piece reported that Dunkin’ Donuts introduced its Espresso line a year-and-a-half ago and it now represents 10 percent of the chain’s
coffee sales. The head of marketing for Dunkin’ Donuts, John Gilbert, said, “I don’t think there’s been a new product that performed at that level in our history.”


As for McDonald’s getting into the business, Mr. Gilbert had a W-like reaction. “We’re up to it. Bring ’em on.”
George Anderson – Moderator

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