McCafe Defies Dayparts

McDonald's coffee helps chain move beyond traditional breakfast, lunch dinner

CHICAGO -- Thanks to McCafe, coffee has played a larger part in McDonald's sales, said Ad Age, which profiled the concept and the company as one of "America's Hottest Brands." During the company's third-quarter earnings call, COO Don Thompson said coffee percentages in the United States have grown to more than 6%, from about 2% in 2004.

McDonald's has had coffee on its menu since the early '80s, with as many as 60 different coffee blends being used in the restaurants. But then McDonald's starting developing a long-term strategy to integrate coffee and related [image-nocss] beverages into its core menu. In 2006, the fast feeder rolled out premium-blend coffee in its restaurants. The following year, it introduced iced coffee, and in May 2009 rolled out McCafe. In July, McDonald's expanded McCafe with frozen smoothies and frappes.

The move into premium coffee illustrates McDonald's ability to reinvent itself and appeal to consumers across the spectrum and boost sales in new dayparts, said the report.

"As you look at how customers use our restaurants today, and how eating out and how habits have changed, gone is traditional breakfast, lunch and dinner, even though we sell the majority of our coffee products at breakfast," McDonald's USA spokesperson Danya Proud told the publication. "Some of these other iced beverages really have started to pick up mid-morning and late afternoon."

McDonald's continues to expand its offering under the McCafe brand, the report said. It is introducing a caramel mocha drink, and the company is testing frozen strawberry lemonade in several markets, including Austin and El Paso, Texas; Detroit; Rochester, N.Y.; and western Michigan.

Earlier this week, Oak Brook, Ill.-based McDonald's USA LLC introduced the newest addition to the core McCafe beverage line: Caramel Mocha, a blend of caramel, mocha andespresso topped with whipped cream and caramel drizzle, offered hot or iced. The company's first venture into the seasonal beverage market, McDonald's USA is launching McCafe Caramel Mocha nationwide in time for the holiday season to further build on the success of the core McCafe line, it said in a statement.

To promote the new drink, McDonald's is giving customers in nine U.S. cities. the opportunity to participate in the McCafe Caramel Mocha Scavenger Hunt for a chance to win a year's worth of free McCafe. Participating markets include: Atlanta; Chicago; Cincinnati; Dallas; Los Angeles; New Haven, Conn.; Salt Lake City; Tampa Bay, Fla.; and Washington.

During the week of November 15, 2010, McDonald's will hide three, giant-sized McCafe Coffee cups throughout each city. McDonald's will leverage its local and national social media channels, such as @McDonalds and @McCafeyourday, to distribute clues to locate the cups. Customers are then encouraged to use these clues and their knowledge of the selected markets to locate the giant cups. The first person to locate a cup will be greeted by a McCafe Prize Official and win a year's worth of free McCafe beverages. There will be a total of three Grand Prize winners per market. Consumers that visit the cup after it has been found can also receive a coupon for one free small-sized McCafe beverage, while supplies last.