Is it serious for McDonald's to carry out takeout business and launch cold-extracted coffee?

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McDonald's is getting more and more serious about selling coffee.

McDonald's announced on its website on Monday that McCoffee will launch cold extract coffee, the first batch of 74 stores in San Diego, and then further to other markets. According to officials, the latest cold coffee is divided into classic McCaf é Cold Brew Coffee and cream McCaf é Marble Cold Brew, both made of Arabica coffee beans, and consumers can add flavors such as vanilla, caramel or hazelnut as they like.

McCoffee has not updated its menu for quite a long time since it was founded in 2009, but it has acted frequently in the last year or so.

In 2017, McDonald's has added a number of coffee product lines, including "coffee shop quality" cappuccino, American and iced caramel macchiato, and the restaurant is equipped with higher-quality coffee machines that produce thick milk foam. In June this year, McDonald's launched a limited version of cold coffee in summer.

The latest cold products

Cold extract products launched in June this year

With the sluggish growth of the traditional coffee market in the United States, cold-extracted coffee, which has only been on the market in recent years, has attracted more consumers and become a popular product in coffee shops. According to Mintel's 2017 Coffee report, cold-extracted coffee is particularly attractive to "highly engaged iGen (new humans born in the social media era) and millennials" who drink more coffee, are willing to try new products and are willing to buy quality products.

But it takes more effort to sell cold coffee. It takes a long time to make and is a major feature of it, which usually takes 6 to 20 hours, which is a challenge for retail stores to determine daily supply and rapid replenishment.

Compared with the United States, the development potential of the Chinese coffee market is much greater. According to the London International Coffee Organization, the global coffee market grew by only 2% in 2017, while coffee consumption in China grew by as much as 15%. The objective development prospect has attracted more coffee brand operators to invest in it, and the competition is becoming increasingly fierce.

The coffee market participants in this article not only have to work hard at the product level, but also actively carry out the takeout business in order to win more new customers and broaden consumption channels.

McDonald's is the latest member of the Chinese market to launch a coffee delivery service, which launched a McCoffee delivery service in Shanghai on October 8. Consumers in Shanghai can place orders through WeChat Mini Programs, ele.me and Meituan takeout platforms. McDonald's said that the delivery service of McCoffee will then be gradually extended to other cities in China.

But it is not easy to do a good job in coffee delivery. As Starbucks has previously revealed: first, the delivery time is too long, it is easy to affect the taste of coffee, second, the distribution profit is not high, the distribution is complex, and now major brands are scrambling to seize the coffee takeout market, resulting in great competitive pressure.

At present, in the Chinese market, McDonald's competitors in the coffee field, such as Starbucks, Costa and Ruixing, have all opened delivery services. And doughnut chain brand Dunkin'Donuts, Japan's largest coffee chain Doutor, Canada's Tim Hortons and so on have also entered China. Among them, the new generation of restaurants launched by Dunkin'Donuts has also increased the proportion of the coffee business, launched a limited menu of coffee with multiple flavors, and even announced the deletion of the word "doughnut" from the brand name to emphasize the importance of the coffee business.

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