
20 Aug 2014 US: McDonald’s plans McCafé retail rollout in 2015
McDonald’s has announced that its long-awaited, full-tilt entrance into the $11 billion-plus US retail coffee market will take place early next year when it rolls out McCafé coffee in ground, whole-bean and single-cup forms through a partnership with Kraft.
“We think this will increase the awareness of the McCafé brand beyond its current in-restaurant strength and that will encourage more people to try it. I think it allows us to tap into that very large base of coffee drinkers who now make their coffee at home. This will give us access to them as well,” said Greg Watson, senior VP, McDonald’s US, Menu Innovation.
Retail coffee is hardly an inconsequential market. Data from Statista shows that the average American adult spent $21.32 a week on coffee in 2013.
Packaged Facts estimates that 77% of the market ($37 billion) is coffee consumed at foodservice. That leaves 23% or an $11.2 billion market for coffee sold at retail. McDonald’s could use a nice chunk of that market.
Kraft has “been a wonderful partner in this process. They bring deep coffee expertise and a great distribution network and manufacturing capabilities,” Watson said. “It’s a strong marriage between the two brands.”
In October 2012 McDonald’s trademarked its McCafé name for whole bean and ground coffee. It began selling McCafé coffee in Canada in November 2012. Earlier this year, McDonald’s began testing the bagged coffee at a few supermarkets.
Packaged in 12-oz bags, McCafé will be offered ground in Premium Roast, Breakfast Blend, French Roast, Colombian, Premium Roast Decaf and French Vanilla and Hazelnut plus a French Roast Whole Bean. Premium Roast—the coffee served in McDonald’s restaurants—was the top seller during the test marketing,
Watson said he expects pricing to be roughly the same as the $7.29 for a 12-oz bag at which it was sold in the test markets.
Single-cup (pod) coffee will be offered in Premium Roast, French Roast and Premium Roast Decaf varieties. Mintel reports US consumers bought $3.1 billion worth of coffee pods in 2013, compared with $132 million in 2008. One-quarter of Americans now own single-serve brewing systems such as the Keurig.
Other foodservice brands—including Starbucks, Tim Hortons, Dunkin’ Donuts and Krispy Kreme—already market their coffee in pods as well as ground.
Packaging (shown above) developed for the US tests and different from that used in Canada will be used for the national rollout.
“We found strong acceptance of that package and we think it really represents the brand well,” Watson said.
Initially, the bagged McCafé coffees will be sold only through grocery, mass merchandise, club and drug retailers and will be not be available in McDonald’s restaurants. Asked if that might change down the road, Watson said, “We’ll continue to look at that; it is definitely a possibility for the future.”
Source: http://www.burgerbusiness.com