At the end of McDonald’s five-hour Investor Day presentation on Wednesday, CEO Chris Kempczinski brought up CosMc’s, the drive-thru beverage concept the company was about to open in a Chicago suburb.
In the process, he sought to ease some of the expectations that had been built over the previous days, as social media buzz built for the concept that had, quite literally, been kept under wraps. “We’re talking about 10 stores, OK?” he said. “Let’s not get too excited.”
Fat chance. The location, in Bolingbrook, Ill., held a “soft open” on Thursday. Word spread. Cars began lining up in the four-lane drive-thru, and they’ve been there ever since, according to reports from media and customers.
Waits were reportedly around two to three hours the first day. The company acknowledged in an email that “demand and interest have been high and consistent since open.”
The opening is at least an early confirmation that it’s OK for the company to take a chance on something big.
And it certainly highlights the company’s ability to get attention these days. The fast-food chain has done a masterful job of marketing itself in recent years, using toys from designers you’ve never heard of to lure young adults into buying Happy Meals and naming meals the company has on hand after stars and watching customers snap them up.
In this instance, the largest restaurant company in the world hinted at creating a secondary concept based on an alien McDonaldland character from the 1980s called CosMc’s. “What would happen if a McDonald’s character from the 1980s that was part alien, part surfer, part robot … were to open a restaurant in 2023?” Kempczinski told analysts.
McDonald’s came up with the concept of a beverage-centric drive-thru concept in October of last year, meaning that CosMc’s went from idea to reality in a little over 13 months. “In October of last year this was a sketch,” Kempczinski said in an interview.
The company had a team dedicated to the concept of creating CosMc’s, using capabilities the company already had.
McDonald’s kept plans for the test concept quiet, even after Kempczinski briefly mentioned the idea on a July earnings call. The company converted an old suburban Boston Market into a beverage concept with a four-lane drive-thru, hoping to take advantage of a $100 billion market for specialty beverages.
Social media, however, figured out what this was as covers fell off the CosMc’s sign. The result was a media feeding frenzy that picked up steam over the week. Now, roughly everyone near Illinois is in line.
But new restaurants often do big business once they open, as attention to the opening attracts the curious. Over time, however, that business settles as curiosity wanes. CosMc’s long-term potential rests on its ability to keep customers after that initial excitement wears off. The restaurant world is littered with concepts that grew too fast based off early enthusiasm (uh, Krispy Kreme) only to lose it all later on.
McDonald’s, for its part, is taking its time here. It plans 10 locations total, nine of them in the Dallas and San Antonio markets of Texas, by the end of next year. It will then sit on them for a year to see how the concept performs.
There are other risks. Large companies simply don’t historically do a great job of creating new concepts. All this attention could also prove to be a distraction that is used as a cudgel by Wall Street or others if the primary brand starts to falter. And drive-thru beverages is a hotly competitive business.
Still, Kempczinski is willing to take risks and believes his company’s performance affords McDonald’s that luxury. And the simple fact McDonald’s is opening 10 of these so fast is proof of that. “Ordinarily at McDonald’s, we want to test things to the Nth degree,” he said. “We don’t need a test before the test.”