McDonald's taste for coffee

Reuters News Agency

LOS ANGELES – Leonor Gavina-Valls's father began selling dark roast coffee to Vietnamese and Armenian immigrants in the late 1960s, seeing a niche market for strong coffee when weaker brands ruled the United States.

Decades later, the coffee is still strong, and her biggest client is McDonald's.

Sales of high-end coffee to the fast-food chain known for affordable burgers have expanded rapidly over the past year, and she sees even better times ahead, because McDonald's Corp. is testing drinks such as lattes and cappuccinos.

"Way back when, you said espresso, and people looked at you kind of funny," said Gavina-Valls, vice president at coffee importer and roaster Gavina. "Now with Starbucks, and a coffee house on every corner, it's different."

McDonald's is pushing quickly into the high-end coffee market, with its mouth-watering profit margins.

"You can't get much better profit than adding water to beans," McDonald's USA President Don Thompson said at an investor conference last week.

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