McDonald’s New Cup of Tea: Coffee Bars

By Scott Hume

CHICAGO–Determined to broaden its appeal to adults and capitalize on a piping-hot trend, McDonald’s Corp. is testing a branded coffee bar concept called Company Joe Coffees & Bakery.

One prototype unit is operating in Woodridge, Ill., close to the fast-food chain’s headquarters in Oak Brook, Ill. It is part of a complex that includes a Thornton gasoline station and convenience store, and a McDonald’s restaurant.

McDonald’s officials confirmed it is testing the viability of the Company Joe coffee concept in Woodridge and at another site in Ohio, but offered no other details. Sources said the company plans to open additional Company Joe locations in the near future.

With only two locations, Company Joe is 1,112 short of the number of stores operated by Seattle-based Starbucks Corp., the reigning king of coffee. Insiders said Starbuck’s success spurred the tests. In Sydney, Australia, meanwhile, McDonald’s operates a ‘McCafe,’ serving coffee, baked goods and light sandwiches in a unit with outdoor seating.

‘The coffee market is booming, and McDonald’s would like to have a piece of it,’ said one source familiar with the test. ‘Couple that with the need for more (features) that are attractive to adults, and you have Company Joe.’

The operational Company Joe unit, between the minimart and the McDonald’s, has its own logo and signage, none of which mentions its connection to McDonald’s. It offers a variety of regular and flavored coffees, priced at 79 cents to 99 cents, and a small selection of wrapped baked goods. It also includes a cappuccino maker. Purchases at the unmanned coffee bar can be paid for at either the McDonald’s or the Thornton minimart.

The Company Joe test has not received any advertising support, but sources said the concept would fall under the domain of DDB Needham Chicago, which handles marketing for McDonald’s non-traditional sites.

–with Karen Benezra

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