The Secret Behind McDonald's Coffee

NEW YORK (MainStreet) — About seven or eight years ago, you probably noticed how good Costco's "Kirkland Beer" tasted. That's because the people behind it — Utica, New York-based Matt Brewing Company — were also the people that brewed the Saranac line of beers, which any serious beer buff will tell you is among the best in the United States.

The other great, truly surprising consumer experience was around 2009 when everyone you knew began to whisper, "You know, McDonald's coffee is pretty good." First of all, they were actually drinking Newman's Own organic coffee and, second of all, it was (and is) only in the Northeast that McDonald's is Newman's.

But, that didn't seem to matter, because word spread and, Newman's or not, people started to notice that McDonald's McCafé coffee was pretty darn good. And, as my kin are fond of saying, wicked cheap at only a dollar.

The market responded, in kind. Two years later, in 2011, Ray Kroc's "billons served" helped the company make more than $2.1 billion on coffee alone (out of $34 billion in total revenue).

There's little doubt that the fast food giant wanted in on the take-away coffee industry fueled by—let's face it—Starbucks, alone. There's even less doubt that, in the end, the consumer ended up winning in this expanded marketplace.

But, with investors sharpening their plastic stirrers over McDonald's Q2 failure (with reported earnings of $1.38 per share, missing the $1.40 mark Wall Street wanted) and less than glowing Q3 earnings forecasts, coffee may not be enough to meet analysts' projections. Sure, those numbers (and the ire of investors) is about more than a cup of coffee—it's about the entire brand, its offerings and its ability to grow.

Then, again, maybe it is about a cup of coffee—or coffees.

Back to Top