McDonald’s challenges Starbucks, Dunkin’ with new McCafe menu, look

In 2009, McDonald’s operator Patti Widdicombe was more than nervous when the chain dipped its toe into uncharted waters with the McCafe launch.

The in-house espresso bars were developed as a fast, less expensive alternative to rival coffee houses, including Seattle-giant Starbucks.

“I was nervous. It was such a new product for us,” said Widdicombe, whose family operates five McDonald’s restaurants in Garden Grove.

McCafes, which serve lattes, frappes, hot chocolate, shakes, iced caramel mochas and iced coffee, wound up being “terrific” for business. It helped boost breakfast and afternoon sales at her restaurants.

“I was wrong,” Widdicombe said

Now, nearly a decade later, McCafes have been refreshed to increase repeat visits from casual customers. On Wednesday, McDonald’s said 14,000 McDonald’s restaurants across the U.S., including California, have launched three new espresso drinks to the coffee menu: cappuccino, Americano, and iced caramel macchiato. Restaurants also have been outfitted with higher quality espresso machines, which produce a creamier and thicker milk foam.

Syrups used in the coffees are now free of artificial colors and flavors. White and gold cups for hot and cold drinks replace the dark brown paper cups. Beverage packaging is also expected to change seasonally. Think red cups during Christmas. (Sound familiar, Starbucks?)

“This is the first real change since we launched McCafe,” said Widdicombe, whose restaurants are among the first in Southern California to test the new drinks.

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On Wednesday, McDonald’s also confirmed plans to expand McCafe in supermarkets. Ready-to-drink bottled frappes are expected to hit stores in early 2018. McDonald’s, which also sells its McCafe-branded ground coffee in grocery stores, said they have not finalized the list of retailers where the bottled drinks will be sold.

“We understand how important the coffee culture is for consumers and we are committed to meeting that demand at the taste, convenience and value only McDonald’s can offer,” Chris Kempczinski, president of McDonald’s USA, said in a statement.

Restaurant industry analyst Darren Tristano said McCafe has been a solid performer in the breakfast and all-day beverage category because consumers find it a good value. Increasing quality is a natural next step because Dunkin’ Donuts and Starbucks are strong with quality and convenience.

“The time appears to be right for McDonald’s to close the gap on their rivals,” said Tristano, a food service analyst based in Chicago. “With the oversupply of restaurants and cafes today, there is great pressure to

Source:: The Mercury News – Lifestyle

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