McDonald’s to Sell Bagged Ground Coffee

Some Canadian franchises to begin carrying new item in November

By Nate Wooley, InvestorPlace Writer

Everyone’s familiar with the big names in coffee: Starbucks (NASDAQ:SBUX), Dunkin Brands (NASDAQ:DNKN), Green Mountain (NASDAQ:GMCR) …

McDonald’s (NYSE:MCD)?

That’s right — the world’s largest fast-food chain wants to get in on the bagged coffee game, too.

McDonald’s will begin selling its own brand of bagged ground coffee in some of its Canadian restaurants next month, the Wall Street Journal reports, though it denies having any plans to sell bagged coffee in the United States.

McDonald’s has been building its coffee business for several years through McCafe menu items. These drinks have built an awareness of McDonald’s coffee with consumers, and they have a higher profit margin than most of the items on the menu.

However, bagged coffee is a $5.6 billion industry in the U.S., and with coffee representing 6% of McDonald’s total American sales, the opportunity is too good for the fast-food chain to pass up. MCD’s hope is that customers will develop greater brand loyalty as their routine drive-thru stop becomes a daily morning cup.

McDonald’s also said it is considering offering single-serving packets of its coffee.

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