McDonald's concept CosMc's could win the coffee war against Starbucks and Dunkin'

McDonald's has initiated the opening of the first locations of its innovative, retro coffee drive-through, CosMc's. Despite entering a saturated market, CosMc's may possess a strategy for success. The allure of unique beverages attracted hundreds to the Chicago suburb of Bolingbrook, Illinois, last Thursday. Customers waited in line for hours, with some even offering bribes to expedite their wait. Lines of cars wound around the small village, all in pursuit of a specialty drink from CosMc's, McDonald's new beverage concept store.

Unlike a traditional McDonald's storefront, CosMc's operates as a drive-through only. The new approach also embraces what the company refers to as 'bold and unexpected flavor combinations', such as specialty lemonades, cold-coffee mixtures, and signature slushes. McDonald's aims to inaugurate approximately 10 pilot locations in the US by the end of 2024. However, it's venturing into a crowded and expanding market of fast-coffee giants. Current data from Allegra World Coffee Portal, a platform focused on the coffee industry, reveals that the branded-coffee market is 7% larger than its pre-pandemic size, with market leaders Starbucks and Dunkin' projected to reach 16,144 and 9,434 US stores in 2024, respectively.

These figures may seem intimidating for a newcomer in the fast-coffee sector, but experts suggest that CosMc's may be well-positioned to carve out its own niche in the highly competitive landscape. One of CosMc's strategic assets, according to some experts, is its emphasis on a fast experience. Andrea Hernandez, the founder of Snaxshot, a food-and-beverage insights platform, proposes that CosMc's may have something to offer to Gen Z and Gen Alpha consumers. She states that while Starbucks was the millennial drink of choice, Gen Z is all about counter-culture and are in search of something different. They are particularly attracted to beverages that can be customized to their preference. CosMc's appears to comprehend this consumer desire, as their press release boasts 'customizations at every turn: popping boba, flavor syrups, energy or Vitamin C shots, and so much more.