Thursday, January 17, 2008

Make That a Big Mac . . .chiato.

You have probably read by now that McDonald's is store-testing the sale of espresso and cappuccino, and as a part of that test, how well they can train their own "baristas" to make said drinks.

They are after a bigger swig of the retail, brewed-coffee sales especially after the success of their new, premium coffee. The question remains whether cappuccino sippers will be interested in imbibing while surrounded by kids, kids meals, and construction workers in a hurry -- even if it is cheaper. And there is the obvious problem of store quality and consistency, it's one thing to teach someone to make coffee, another to make a good caramel macchiato -- training that Starbucks does amazingly well. I happen to like Starbucks coffee (sorry Jeromey) but I also know they are selling more than coffee. They are also selling escape and image, something McDonald's can't do, at least in the present store configuration.

The other side of this venture is old-fashioned, corporate warfare. McDonald's sees a chastened, and now vulnerable, Starbucks whose stock value has halved in the last year and who has dramatically slowed domestic store growth, which at its peak was 2,500 new stores a year (over 6 stores a day, a mind-numbing figure).

Personally, I think McDonald's could pull off the espresso move and not hurt Starbucks. It's not necessarily a crossover market.

The reality is as I have said, Starbucks to date has had no nation-wide competition. Dunkin Donuts is trying, 7-11 has their steady share of quick-coffee buyers, and McDonald's at present is low-fat competition. Starbucks created the U.S. coffee as a meeting/reading/relaxation concept and is king of the hill. Their current setbacks notwithstanding, they are here for a long while and are very, very profitable. Krispy-Kreme they ain't.

I like the McDonald's move, but my research uncovered one final question: Will we soon refer to them as Mickey D . . . caf ? Sorry.

8 comments:

billyf said...

I always enjoy reading your posts..

I told my wife about McDonald's trying to sell frappucinos and such and she pointed out that you will still smell the grease when you walk in the door, etc. I, for one would not enjoy the smell of egg mcmuffins while trying the new product.

Francis Shivone said...

Thanks Billy. Great point. Aroma is a part of taste. In Europe their McCafe's are different stores which would eliminate that problem. I don't think the USA has McCafes yet.

jeromey said...

they're not going to hurt my feelings. i'll still be drinking my (much better) coffee at home in my slippers reading my favorite blogs! :)

it's not the coffees that concern me - it's the "complex mixed" coffee (milk/sugar)-based drinks.

mcdonalds has become the behemoth it is by selling americans more bad-for-you food than we need. their genius marketing allows them to indoctrinate us at age happy meal. when you grow up and have to start thinking about your mchealth, you might frequent the feeding trough less regularly.

so now, they're planning to sell these coffee concoctions; the best-selling of which will be loaded with vanilla, sugar, and milk.

here's to mcdonalds trying to outsmart the american consumer (not hard to do) and give us more of exactly what we don't need! the mcking is dead! long live mcdrink!

if you can swallow it, here's an article i googled about the nutrition facts of starbucks drinks:
http://www.womens-health-questions.com/starbucks-nutritional-facts.html

and here's the link for the info directly from starbucks:
http://www.starbucks.com/retail/nutrition_beverages.asp

Andrew said...

McDonalds, I think, is not going for the 'hang-out' crowd but the drive-thru crowd. I think they'll have success with that group

Francis Shivone said...

Jeromey -- I was hoping a get a response from you.

I have never had a foofy Starbucks drink I am happy to say. And there is a reason McD's doesn't call their shakes, "milk"shakes.

I'll check those links out tonight.

Thanks

Francis Shivone said...

Andrew -- Gotcha -- that's probably right.

rambler said...

The drive through crowd, plus young parents who want to relive/extend their carefree times. Personally, the only times I drink McD coffee is when I get the combo with the egg and sausage sandwich between the pancake things. Perhaps you can tell that's not very often.

Me, I like 7-11 coffee best, but it's fun to hang out on the patio at Starbucks on University and visit with friends.

Joe said...

i enjoy everything the the McDonald's McCafe coffees except the goofy name