McDonald's perks up coffee competition
McDonald's is launching a massive advertising campaign to promote its specialty coffee. Jeremy Hobson reports.
A McDonald's advertisement for McCafe (mcdonalds.com)
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Kai Ryssdal: Among the most brilliant marketing moves ever was convincing us to spend $4 for a cup of coffee that it costs a company maybe, I don't know, maybe 30 cents, half a buck to make. Seen in that light, the news today that McDonald's is going to spend $100 million promoting its specialty coffees makes more sense. Mochas, cappuccinos and lattes on sale now at McCafes around the country. As Marketplace's Jeremy Hobson reports.
JEREMY HOBSON: Here's one of the ads from the new campaign.
MCCAFE COMMERICAL: With McDonald's McCafe, a better day is possible. Introducing hot or iced mocha.
With ads like that McDonald's is hoping to bring in at least $100,000 per store in premium coffee sales. That's about a billion dollars a year, says analyst Steve West of Stifel Nicolaus.
STEVE WEST: You cannot underestimate the might of McDonald's marketing.
West says Starbucks has shown that Americans can be convinced to trade up in the coffee market. In fact, he says, people who buy regular coffee are a dying breed.
WEST: The younger generations tend to drink specialty coffee. And so McDonald's is just going after that big category out there. There's a lot of money and a lot of profit in that category.
HOBSON: So I've brought our intern Rafael Cohen into the studio with me for a quick taste test here, and we've got one McDonald's latte and one Starbucks latte. They're both in the same cup, so I can't tell which one is which, and I'm going to taste this first one: lot more froth there. It tastes like a good, strong latte. And this one, no froth and oh my God, Rafael, this is sweet.
COHEN: What do you think Jeremy?
HOBSON: I'm going to have to say that the super sweet one is from McDonald's.
COHEN: Bingo.
HOBSON: All right, add sugar and everybody'll buy it. There we go, thanks Rafael.
COHEN: No problem.
And in case you were wondering, it took a minute and 5 seconds for a barista to make the Starbucks latte. The slightly cheaper McDonald's latte was made by a machine in 44 seconds.
In New York, I'm Jeremy Hobson for Marketplace.
Comments
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From Madison, WI, 09/28/2009
I agree, I do prefer to go to real cafes, but I have found that the *consistency* of espresso quality at Starbucks is very good, and doesn't seem as dependent on the individual barrista. And I gotta say, I've had a few of the McDonald's cappucinos, expecting the worst and was impressed each time. Not as good as Starbuck's but I will definitely be back for more. Also the convenience and relatively good quality of getting a cappucino at McD is enough to change my mind about buying one of those expensive high-end home espresso machines...
From NJ, 05/06/2009
I was admittedly intrigued by the availability of coffee drinks at McDonald's. But that quickly changed when my wife brought me a mocha from McDonald's. It was not good. Very little coffee, mostly chocolate syrup. Definitely will not replace my occasional mocha from Starbuck's as it was also not very cost-competitive, being only about 50 cents less than the drink from Starbuck's and sginificantly lower in quality.
From Seattle, WA, 05/05/2009
Both Starbucks and McDonald's use "superautomatic" espresso machines, where a computer controlled machine grinds, tamps, brews espresso and steams milk. The difference between the two is that Starbucks machine requires the "barista" to manually steam the milk, which speeds up the work flow, and MCD's machine mixes air, steam, and milk to produce steamed milk.
True "specialty coffee" cafes use fresh roasted coffee, and the real barista manually grinds, tamps, brews espresso and steams milk. A well trained barista can prepare any coffee significantly better than any superautomatic machine can.
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