Shake-Up Coming Next Year for McDonald’s McCafé

OAK BROOK, Ill. — McDonald’s Corp., as part of a bid to challenge Starbucks and Dunkin' Donuts for the nation’s coffee drinkers, will reintroduce its McCafé concept next year — eight years after its nationwide debut.

The retooling builds upon McDonald’s efforts to upgrade its coffee and get more of its beans from sustainable sources, mimicking a move made by rival Seattle-based Starbucks, Bloomberg reported.

"We’re really excited about the McCafé brand and what it can do to complement our food offerings," Kristy Cunningham, U.S. senior vice president of strategy and insights at McDonald’s, told the news outlet.

The new McCafé campaign will include special deals, more seasonal beverages, and increased marketing of the chain’s coffee rewards program, she explained.

According to the executive, McCafé generates $4 billion annually in U.S. sales, but could better cater to customer needs. Starbucks and Dunkin’ Donuts have attracted customers with high-margin espresso, lattes and mochas. Although McDonald’s offers a wide range of coffees, it hasn’t become an upscale-drink destination.

"[McCafé] is a very important piece," noted Cunningham. "It gives us the chance to follow what the customer is really looking for."

While the fast-food giant is facing declining foot traffic, McDonald’s is looking to build on the success of its all-day breakfast, which rolled out last year across the U.S. The rollout garnered a resurgence, but it’s waning, Bloomberg reported, as domestic comparable sales rose only 1.3 percent in the last quarter.

In retooling the McCafé brand, McDonald’s will emphasize its price advantage over Starbucks. For the first quarter of 2017, the company will offer $1 drip coffee and $2 small specialty beverage deals, Cunningham said.

Other moves to compete with Starbucks will include:

• Buying all of its coffee from sustainable sources by 2020;
• Selling pumpkin spice lattes nationwide this fall for the first time in three years; and
• Upgrading its espresso machines with equipment that has better milk-steaming technology and can make a wider variety of drinks.

Internationally, McDonald’s opened its first standalone McCafé location in Toronto in 2015, in a move that "showcases the company’s passion for elevating the café experience," it stated. Across its Canadian restaurants, McDonald’s sells Americanos and shots of espresso, and bakes McCafé pastries in-house.

McDonald's is also upgrading its North American stores with table service and touch-screen ordering kiosks, as CSNews Online previously reported.