The original strategy may have changed, but McDonald’s Corp. (MCD) continues to charge full steam ahead into its new McCafe line of coffees.
It began as a test concept a few years ago to incorporate separate McCafes in each restaurant that would serve a new line of espresso-based products and assorted bakery goods. But McDonald’s later changed direction and decided to incorporate the new coffeehouse lineup into its existing front counters.
“That [idea] gave us the inspiration to introduce a new line of coffee,” Danya Proud, a spokeswoman with McDonald’s USA in Chicago, said Thursday.
“So what you’re seeing being introduced nationally is in fact our new line of coffee, but they’re being integrated into our existing restaurants into the front counter,” Proud said in a telephone interview.
More than 7,000 of the 14,000 U.S. McDonald’s restaurants currently offer the McCafe brand of coffees and bakery items, with plans to outfit most of the remaining restaurants by mid-2009, she said.
“We are very aggressive and very bullishly adding this new line of coffees to all of our existing restaurants,” said Proud.
The economic recession has allowed the world’s largest restaurant chain with total revenues of $5.7 billion in the fourth quarter of 2008 to tap into the growing demand for lower-cost food items.
“That’s the great part about McDonald’s is that we are actually offering affordable luxuries, so for us we know our customers are looking for those affordable luxuries,” she said. “We know our customers are visiting us, now more than ever, for many of our well known breakfast items, and we know our coffees continue to be a growing category.”
While high-end retail coffee chains like Starbucks (SBUX) and Caribou Coffee ( CBOU) are seeing sales decline and market share fall during the recession, McDonald’s continues to pour hundreds of millions of cups of coffee each day.
In 2006, when McDonald’s introduced its Premium Roast blend, U.S. volume reached 500 million 12-ounce cups a year. Though she had no current data, Proud estimates that total has “grown significantly since then.”