Goodbye CosMc’s. Hello McCafé.
McDonald’s test of a more substantial lineup of beverages proved to be successful enough that the company plans to introduce it nationwide sometime this year, executives said on Wednesday.
The lineup, which will include energy drinks in collaboration with the beverage maker Red Bull, will be done under the company’s existing McCafé brand—effectively ending for good the CosMc’s moniker the company had played with when it started looking at drinks two years ago.
“The results did exceed expectations for the entirety of the program,” Jill McDonald, global chief restaurant experience officer with the Chicago-based fast-food giant, told analysts on Wednesday. “It did drive incremental occasions. These were mostly snack, dinner and evening and we also saw higher average checks. So the financials are really playing out well.”
McDonald’s believes that beverages represent a $100 billion opportunity globally. In the U.S., beverage chains have been thriving, particularly brands like 7 Brew, Dutch Bros and Scooters, along with the dirty soda concept Swig.
Many of these brands serve a wider variety of drinks than you can find at most restaurant chains or even coffee shops, including energy beverages, boba teas and certainly iced espresso-based beverages. Surging demand for cold beverages has turned Starbucks from a chain that largely sells hot coffee into one that now gets more than two-thirds of its beverage sales through cold drinks.
As McDonald’s has discovered, many of these beverages play well in the afternoons.
Much of the industry is working to catch on. Dunkin’ is testing a rebranding of sorts in the afternoons to highlight its drink offerings in these categories. Taco Bell is expanding its Live Mas Café, an in-store beverage concept. Numerous other restaurant chains have been expanding their beverage lineups to include energy drinks, boba teas, dirty sodas and other items.
It’s also happening in Canada, where Tim Hortons is pushing more cold beverages, which could help build sales in the afternoon. Sales of those beverages rose 8.6% last quarter, parent company Restaurant Brands International said on Thursday. More than a quarter of its beverage sales are cold now.
McDonald’s own beverage strategy has evolved quickly.
McDonald’s began testing a secondary concept, CosMc’s, in suburban Chicago in late 2023 and then expanded in Texas the next year. By early last year the company shuttered three of its Texas CosMc’s locations and later in the year closed the rest of them, opting for a beverage lineup test at 500 locations in Wisconsin and Colorado.
(Check out our look at the beverage test here.)
Those beverages included items like a Creamy Vanilla Cold Brew and a Toasted Vanilla Frappe. The company served crafted sodas like a Sprite Berry Blast and there was a line of Refresher beverages, such as Popping Tropic and Strawberry Watermelon. The drinks were “CosMc’s-inspired.”
But the company has much more invested in the McCafé brand and it is far more well-established.
McDonald’s believes it can capture a lot of the beverage business with its omnipresence and lower prices. “We’re going to do what we do best at McDonald’s,” she said. “We’re going to offer great-tasting products, great prices with a speed and convenience that our customers want and expect.”
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