Burger chain to modernize its $ 4 billion coffee brand

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The McDonald’s McCafe concept is getting a makeover.

The burger chain is set to revamp its $ 4 billion coffee brand in 2017 as part of an effort to take on rivals Starbucks and Dunkin ‘Donuts, Bloomberg reports.

The Golden Arches are “re-committing” to McCafe, a spokesperson told CNBC.

“We know that preferences change and people today are looking for great taste, high quality, value for money and even more choice and flexibility than ever before,” she said. “In order to evolve with these changes, we are improving the McCafé experience. This includes new seasonal flavors and enhancements to our beverage lineup, a focus on sustainably sourcing our espresso and coffee beans, a rewards program through our mobile app, and training crew members to donate. delicious drinks and great service to our customers. ”

During the first quarter of 2017, the company will offer McCafe Signature Blend Coffee of any size at $ 1 and Small Specialty Coffee at $ 2 – including lattes and mokas – as part of a term promotion. limited.

McDonald’s hasn’t always been the go-to source for better coffee drinks, but the hamburger joint is hoping the revamp could help boost its coffee business.

The coffee brand is “a very important piece”, Kristy Cunningham, US senior vice president of strategy and ideas, told Bloomberg. “It gives us the chance to follow what the customer is really looking for.”

Sales at hamburger chains rose 3.3% in the past year, a fraction of the 10% growth in coffee shops, according to Bloomberg, which cited research firm Technomic.

McDonald’s has tried to gain traction with consumers by offering a Buy Five Get One Free Offer for its McCafe drinks. The traction in this area would help, as the benefits of McDonald’s all-day breakfast promotion begin to wane.

Last quarter, McDonald’s same-store sales grew 3.5%, with general improvement across all of its global segments, however, US growth has been more subdued. Sales in the United States grew only 1.3 percent, proving that McDonald’s is not immune to continued low traffic in the American restaurant industry.

The Golden Arches coffee brand isn’t the only aspect of the company’s upgrade. The burger chain revealed last month that its restaurants will be revamped as part of an effort to become a “modern, progressive burger company.”

McDonald’s will add self-service ordering kiosks, artisan burgers and table service to its stores.

“It’s going to continue to be a slow build for them, especially in this type of environment where the customer is waiting for a deal,” Will Slabaugh, analyst at Stephens Inc., told Bloomberg of the McCafe change. “I don’t expect this to be a huge needle motor for them.”

Read the full article on Bloomberg.

– CNBC’s Susan Li contributed to this report.

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