News
McDonald's frappe rollout progresses, rival QSRs ready
April 26, 2010
McDonald's launch of its new McCafe Frappe blended-ice beverages is progressing across the country as it prepares for the national launch. Meanwhile, other quick-service brands are preparing for the increased competition.
McDonald's operators are ramping up for a variety of promotions to boost trial of the new specialty drink line. Earlier this month, a Southern California McDonald's kicked off the arrival of the new offerings with free samples, and now the Greater Philadelphia market has its promotions lined up.
McCafe Frappes are blended-ice drinks available in either mocha or caramel, with a hint of coffee, and served with whipped cream and either chocolate or caramel drizzle. For a limited time, customers of the Greater Philadelphia Region restaurants can enjoy the small McCafé Frappe at an introductory price of $1.99.
Local McDonald's stores in that market also will be hosting "Thank Goodness it's Frappe Friday" events in April and May. Customers are invited to sample both the caramel and mocha-flavored McCafe Frappes and take their picture with the McCafe Frappe in the "Frappe Freeze Frame" ice sculpture at select locations.
McCafe Frappes are available in small (12 ounces), medium (16 ounces), and large (22 ounces). The blended-ice drinks join the line-up of McCafe speciality beverages, which include lattes, cappuccinos and mochas, as well as iced coffees. Smoothies will complete the beverage line and are expected to roll out later this summer.
McDonald's is pleased with customer reception of the new drinks, even before the national launch is complete.
"Our customers have been incredibly receptive to our McCafe beverage line," said Mike Anton, president, Phil-Ad-Mac Owner Operator Association, in a news release. "McCafe Frappes will only continue to satisfy our customers evolving taste by offering a glimpse into that 'affordable luxury' they crave and that only McDonald's can offer."
Jim Skinner, McDonald's Corp. CEO, said on the company's first quarter earnings call last week that the new frappes and smoothies are outperforming expectations as they enter new markets, even without national advertising.
Peter Bensen, McDonald's executive vice president and chief financial officer, said during the Q&A portion of the call that the new drinks are providing a good mix throughout various dayparts, including breakfast. In stores with frappes and smoothies, about 25 percent of the frappes and about 15 percent of the smoothies are sold at breakfast. "(The company's beverage strategy) fits nicely with filling other dayparts when we are trying to drive some traffic into the restaurant," he said.
QSRs ready for battle
Other QSR brands also are hungry for a gulp of the specialty beverage market. Here's a look at a few strategies:
With fountain and frozen drinks as Sonic's primary menu items, the chain is launching new fountain beverage equipment this spring in order to extend drink choices. The new equipment will boost the number of possible combinations well beyond the current 168,000.
Taco Bell executives have said that beverages are an important component of its "sales layer" strategy. Earlier this month, the chain rolled out Limeade Sparklers, a lemon-lime soda made with real lime juice and natural fruit flavors. The offerings include Classic Limeade and Cherry, starting at $1.69.
Burger King is preparing to enter the specialty beverage market as it also switches to Seattle's Best Coffee in U.S. stores. New offerings include iced coffee, Gold Peak Tea and limited-time specials on its Icees. According to a story on Nasdaq.com, the chain plans to offer a $1 summer drink promotion on its Icees to combat McDonald's plans to sell soft drinks for $1, a strategy franchisees are voting on by market.
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