McDonald's (MCD) to Offer Packaged Coffee in U.S. Markets - Analyst Blog

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Hamburger chain, McDonald's Corp. ( MCD ) is reportedly planning to start selling packaged coffee at supermarkets and grocery stores in the U.S. by early 2015 in collaboration with Kraft Foods Group, Inc. ( KRFT ). As per media reports, McDonald's will roll out ground and whole-bean coffee bags, as well as single-cup pods that can be easily used at home coffee machines.

Packed in 12-ounce bags, this take home coffee will be available in various flavors, which include premium roast, breakfast blend, French roast, Colombian, premium roast decaf and French vanilla and hazelnut plus a French roast whole bean. However, prices of these bags were not disclosed.

McDonald's and Kraft Foods had reportedly tested the packaged coffee in selected markets in 2013. The new offering is expected to cash in on the huge demand for at-home options.

McDonald's is focusing on the domestic retail coffee market as it holds immense potential. With the introduction of popular specialty drinks such as Pumpkin Spice Lattes, Frappes and Caramel Mochas, McDonald's has been ramping up its coffee offerings since the introduction of its McCafe brand in 2009. Since then, its coffee sales have surged 70%. This justifies the company's decision to come up with a new offering in this multi-billion dollar, U.S. retail coffee market.

However, we would like to remind investors that it would not be easy for McDonald's to grab market share in packaged coffee sector which is dominated by other chains like Starbucks Corporation ( SBUX ) and Dunkin' Brands Group, Inc. ( DNKN ) who already sell branded packaged coffee at retailers. McDonald's currently has a Zacks Rank #4 (Sell).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: SBUX , MCD , DNKN , KRFT

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