McDonald's coffee initiative brings bean grower, roaster to front burner

Distant Lands' decision to become lead supplier has rewards, challenges

By Mike Hughlett | TRIBUNE REPORTER

TYLER, Texas -- Every day at the Distant Lands roasting plant here, a river of green coffee beans is transformed into espresso, fuel for McDonald's Corp.'s boldest gambit in decades.

Distant Lands' Russell Kramer was skeptical at first that it would ever happen. Could the burger giant really be serious about slinging cappuccinos and mochas? A dirt-bike ride with a McDonald's executive through the coffee-tree-studded mountains of the Indonesian island of Sumatra helped convince him it was.

And Kramer knew that signing on as McDonald's lead espresso provider meant hewing to rigorous rules aimed at making sure the world's best-known restaurant chain never suffers a supply-chain breakdown.

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McDonald's gains ground from rivals with marketing blitz of McCafé brand

It’s cornered the market on Big Macs, fries, and shakes. And now McDonald’s is riding a massive marketing campaign to make gastronomic gains in premium coffee.

Not only has the Golden Arches stolen share from java leader Starbucks as the place most preferred by coffee drinkers, but McDonald’s has also dislodged Dunkin’ Donuts from its second-place spot, according to the May 2009 survey by BIGResearch of more than 8,000 consumers.

McDonald’s is "like a 9,000-pound gorilla," said Dennis Lombardi, executive vice president of food service strategies for WD Partners, a restaurant and retail design and development consultancy. “They have made a very strong push to build share with its McCafé brand and to show it is an alternative to coffeehouses."

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McDonald's goes after slice of gourmet coffee market

By Carly Harrington
Wednesday, November 26, 2008

Want a latte with that Big Mac?

Customers can now order one at most Knoxville-area McDonald's restaurants where mochas, lattes and cappuccinos are being served up alongside Happy Meals.

The McCafe, a concept that was first introduced by the fast-food chain in Australia in 1993, has finally reached East Tennessee, where local franchisees are attempting to grab a share of the gourmet coffee market with the Golden Arches brand of espresso-based drinks.

"We're becoming baristas," said Tom Cochran, whose family owns 29 McDonald's restaurants in the area. "It's been a learning process."

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McDonald's stores in Denver ready to battle Starbucks

By Joyzelle Davis, Rocky Mountain News

McDonald's, already the nation's biggest hamburger chain, is escalating its simmering breakfast battle with Starbucks as it rolls out espresso drinks at all 110 Denver-area locations next week.

McDonald's is overhauling all of its restaurants in the region to include a McCafe that serves a premium line of iced and hot lattes, cappuccinos and mochas. Denver stores will officially begin serving the coffee drinks on Wednesday, relatively early on in the restaurant chain's national rollout, which started this summer. Some 3,500 of McDonald's 14,000 U.S. stores offer the premium coffee drinks.

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McDonald's Specialty Coffee Kick

by Michael Arndt

Thirty years ago, Janice L. Fields was a brand new McDonald's crew member in Dayton, Ohio, taking orders on the evening shift while her husband, an enlistee in the U.S. Air Force, took care of their three-year-old daughter. Today, Fields is chief operating officer of McDonald's USA. Working from the old office of founder Raymond A. Kroc, she is responsible for 13,800 restaurants, 700,000 employees, and $7.9 billion in annual revenue. But once a crew, always a crew. So here she is, in front of a TV camera for ABC's Nightline, back behind the counter and in an apron, grinning and serving coffee.

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McDonald's names S&D Coffee top supplier

McDonald's USA has named S&D Coffee Inc. its 2007 Supplier of the Year.

Concord-based S&D sells premium roast coffee and iced tea to the fast-food chain.

The award is presented annually to the food, paper or product supplier that makes the most significant contribution to, McDonald's U.S. business results. It recognizes commitment to quality and food safety, innovation and customer service.

S&D has more than 70,000 customers nationally, including several leading restaurant chains.

Source: MSN Money

McDonald's Coffee Bars to Take on Starbucks: WSJ

by Reuters

McDonald's is set to launch coffee bars with "baristas" serving cappuccinos and lattes, moving into direct competition with global coffee chain Starbucks, the Wall Street Journal reported on Monday.

McDonald's will install coffee bars at its 14,000 U.S. stores, incorporating theatrics similar to Starbucks' counters, displaying espresso machines and having baristas prepare drinks, the report said.

The report, citing internal documents from 2007, said the move will add $1 billion to McDonald's annual sales of $21.6 billion. McDonald's will also sell smoothies and bottled beverages, it said.

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McDonald's coffee aid perks up its franchisees

By Mike Hughlett | Tribune staff reporter

McDonald's Corp. confirmed Friday that it will support U.S. franchisees by paying for up to 40 percent of the costly restaurant renovations needed for the rollout of its specialty coffee program.

McDonald's foray into specialty coffees, smoothies and other upscale beverages constitutes one the company's largest product introductions ever. And it will be expensive, costing franchisees around $25,000 for equipment and up to $75,000 to retool the restaurants to handle the new beverages.

Some franchisees have worried whether the potential payoff for the beverage offensive is worth the big investment, one of the biggest they have ever been asked to make by McDonald's, the Tribune reported this week. Franchisees own about 85 percent of McDonald's nearly 14,000 U.S. restaurants.

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The new Mr. Coffee

November 20, 2007
BY CHERYL JACKSON Staff Reporter/cjackson@suntimes.com

McDonald's Corp. is preparing to offer a line of specialty coffees in its restaurants. By the end of 2009, the company will be selling mochas, lattes and cappuccinos throughout the U.S. as it tries to take a gulp of the $12 billion-a- year speciality coffee business. Here's a cup-to-cup comparison of the market leader and the wannabe:

U.S. LOCATIONS

Starbucks: About 10,700

McDonald's: About 13,000

PRICE

Starbucks: 12-ounce Mocha: $2.75-$3.45

McDonald's: About $2.49

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What drives coffee choices?

Dan Shearer
The Arizona Republic
Nov. 14, 2007 12:00 AM

Only in my weaker moments can I pay four bucks for a cup of coffee.

And what others consider a status symbol is to me nothing more than proof that we've bought into the sales pitch that the Starbucks experience is somehow worth a small fortune. And for many, it is.

But Starbucks took it in the shorts in March when Consumer Reports told the world that McDonald's coffee was not only cheaper but also better.
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A few months later, McDonald's launched its own line of iced coffees.

But are they better? Frankly, no.

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McDonald's out to win the coffee wars

By Michael Hughlett | Tribune staff reporter

In a significant new product offensive, McDonald's Corp. said Tuesday it will move full-scale into the specialty coffee market, serving up mochas and cappucinos that it says will rival those made by coffee houses.

The Oak Brook-based company has been testing specialty coffees in about 800 restaurants this year, and plans to build out the business nationally, Don Thompson, president of McDonald's USA said at the company's annual analysts meeting.

The company essentially wants to make coffee more than something that customers order with their food.

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