McDonalds wants to be Starbucks

Tom Dougherty, CEO – Stealing Share

7 December 2016

McDonald’s to overhaul McCafe and fixing the wrong problem

In the latest move that demonstrates it has lost its mind, McDonalds is going to overhaul its McCafe brand.

Apparently, McDonalds wants to be Starbucks.

The reason, according to Bloomberg, is that this will better position McDonalds against Starbucks and Dunkin’ Donuts. Are you kidding me?

McCafe and McDonalds

McDonald’s with a McCafe sign

Its still McDonalds.

In fairness, McDonalds coffee isn’t all that bad. A lot of people would seem to agree with me too. It generates about $4 billion a year.

It pisses me off that McDonald’s is putting the cart way in front of the horse. Like next county over in front. People aren’t coming to McDonalds because of bad coffee. They aren’t coming to McDonalds because of the McDonalds brand.

“McCafe, as dressed up as McDonald’s wants to make it, is still McDonald’s. Its lipstick on a pig.”

Let me put this in a perspective. As part of this plan, McDonald’s will buy new espresso machines at $12,000 a piece. McDonald’s has about 14,000 stores in the US. So they are going to spend roughly $168 million on espresso machines. And that’s just the price of the machines.

It’s the brand, stupid, not McCafe

But that $168 million doesn’t fix the underlying problem. People are not coming to McDonalds.

Is a $12,000 espresso machine and $2 specialty coffee enough to convert a Starbucks customer? Maybe if a Starbucks customer was only buying coffee. But Starbucks customers buy more than coffee. They buy the Starbucks brand.

This is what McDonalds can’t get through their collective thick heads. McCafe, as dressed up as McDonald’s wants to make it, is still McDonalds. It’s lipstick on a pig.

It’s the brand, stupid.

Getting people to come to the McCafe requires them to embrace the McDonald’s brand. If the parent brand causes prospects to turn up their nose, better steamed milk won’t bring them in.

McDonald’s, I don’t know why you don’t see it. You have a fundamental problem with your brand. I don’t really even know what it means anymore. But I do know it does not mean coffeehouse coffee.

$168+ million is a lot to spend on fixing the wrong problem.

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