McCafe specialty drinks are on the way to supermarkets
McDonald’s, Coca-Cola team up on Frappes
McDonald’s, whose McCafe gourmet coffee line took direct aim at Starbucks, will follow the coffee giant onto supermarket store shelves early next year.
McDonald’s announced Wednesday that it’s partnering with the Coca-Cola to sell ready-to-drink McCafe Frappe drinks.
The caramel-, vanilla- and mochaflavored beverages aren’t the fast-food chain’s first foray into retail. McCafe whole bean, ground and single-serve coffee are sold in groceries around the United States.
Dunkin Donuts also recently decided to try its luck in supermarkets, convenience stores and big-box retailers. The coffee powerhouse unveiled its own line of bottled, ready-to-drink coffee drinks in February.
Starbucks first began peddling bottled Frappuccino chilled coffee drinks in 1996.
The ready-to-drink coffee segment is growing.
Last year, the category approached 130 million gallons on sales of over $2.8 billion — up from 116-million-plus gallons on sales of more than $2.5 billion in 2015 — according to Beverage Marketing, a consulting and research company.
McDonald’s also unveiled plans to expand the lineup of coffees in its restaurants
McDonald’s also unveiled plans to expand the lineup of coffees in its restaurants with three new espressos — Caramel Macchiato, Cappuccino and Americano.
with three new espressos — Caramel Macchiato, Cappuccino and Americano.
Edward Jones analyst Jack Russo isn’t convinced bottled drinks will be a hit.
“McCafe is more of a store concept where they’ve emphasized beverages. I don’t know if that would work on a product basis,” he said. “If you ask people to name McDonald’s coffee products, they probably won’t come up with it.”
Russo sees the appeal of putting ready-made bottled coffees in stores: The profit margins are higher, because unlike in the chain restaurants, there are no labor costs or food loss.