McDonald’s Canada’s bean counters saw considerable upside in the premium coffee market, but are Canadian coffee drinkers really ready to embrace the McMocha?
The fast food chain is about to find out with the launch of its new McCafé brand, a line of brewed coffee and espresso-based beverages, as well as a so-called restaurant “re-imaging” that creates a defined in-restaurant space for McCafé.
Senior vice-president and chief marketing officer Joel Yashinsky told Marketing that McCafé represents one of the biggest product launches in McDonald’s history, surpassing that of both breakfast and pizza.
Whether it has the longevity of the former or the brevity of the latter remains to be seen, but Canada represents a key market for the new product line, said Yashinsky.
While the McCafé concept has been introduced in other global markets since its U.S. debut two years ago, Canada represents the second-largest market for the brand (it currently has a presence in 910 McDonald’s locations across the country, representing about 85% of the chain’s traditional standalone restaurants).
“We see huge potential within the Canadian marketplace,” said Yashinsky. “Customers have a strong taste for coffee in Canada, the specialty segment is growing, and we really believe we’ve found a great place for us to be able to offer quality espresso coffees that will appeal to coffee connoisseurs and those that are new to the growing marketplace.”
Douglas Fisher, president of the Toronto food service, franchise and hospitality consultancy FHG International, said the McCafé concept will likely have a more immediate impact on Tim Horton’s – which also announced its own line of premium coffee beverages earlier this month – than it will on premium coffee purveyors such as Starbucks and Second Cup.
The concept, he said, could draw customers to McDonald’s during the highly competitive breakfast sales period – which he said is currently owned by Tim Horton’s.
The allure of the McCafé concept for McDonald’s, said Fisher, is that it can up-sell customers on premium coffee beverages without incurring significant expenses. “There’s more money for very little increase in expense,” he said. “If you’re going from a medium coffee to a medium latte, it may cost you a few cents more to make but you’re getting another 50 cents, or whatever it is, in revenue.”
McDonald’s said it is building on a “strong coffee foundation” that has seen it double its brewed coffee sales since re-launching its Premium Roast Coffee two years ago. The company says it is on track to serve approximately 200 million cups of brewed coffee before the end of the year.
“We believe we offer a great quality product,” said Yashinsky. “It’s an authentic espresso coffee experience that we think stands up in terms of a high-quality product with a price that appeals to everyone across Canada. We believe we can speak to every Canadian coffee lover.”
The McCafé launch is being supported by a major marketing campaign from Cossette that includes TV, radio, out-of-home and digital, as well as what it calls a “comprehensive” social media campaign.
In addition, McDonald’s has launched a massive direct mail campaign that will see an estimated 95% of Canadian households receive a McCafé coupon mailer offering a free small McCafé specialty beverage and a buy-one-get-one-free coupon.
“We think the category is worthy of [the major marketing push] and we absolutely believe that getting the right messaging and quality messaging to our consumers is really critical,” said Yashinsky. “We’ve put a lot into this launch and believe it’s an appropriate marketing mix that will help build this business quickly for us.”
The creative for McCafé plays off the message “Bring back the break.” An overarching 30-second spot opens with a montage of people preparing for a break, placing a “Back in 15 minutes” sign in a store window, turning off a car or closing a computer, before continuing with product shots accompanied by a voiceover extolling McCafé’s freshly ground expresso and fresh steamed milk.
An out-of-home execution features a person holding a McCafé-branded cup, accompanied by the message “Fresh espresso in every cup.”
Yahinsky said the creative plays off the notion that breaks have gone by the wayside in an increasingly fast-paced world. “Coffee breaks have gone away, and we think the McCafé launch is absolutely the reason to bring them back and [for consumers] to take a moment with family or friends,” he said. “We think it works really well in terms of what the product speaks to and what it’s all about.”
The TV spots also feature multiple constituencies, from blue-collar to white-collar workers, which Yashinsky said reflects the company’s desire to reach all Canadians with McCafé.
“The specialty coffee market is growing, and you have those that have been ensconced in that product for a while and there is obviously a huge market of folks becoming aware of it,” he said. “Brewed coffee is obviously a big marketplace in Canada, and we believe we can speak to all Canadians in a way only McDonald’s can.”