CosMc's: Why McDonald's wants its own coffee chain

McDonald’s has launched a new cafe concept called CosMc’s, focusing on customizable caffeinated beverages with some food options. The first CosMc’s location is now open in Illinois, with plans for nine more in Texas. The move is driven by the profitability of the specialty coffee market and the potential for increased sales of food items when customers visit for drinks. The goal is to compete in a growing category and participate in the lucrative beverage market. McDonald’s CEO has highlighted the importance of specialty beverages and coffee for the company’s growth. The CosMc’s menu offers a wide range of customizable drinks, including espresso-based options, teas, and other beverages. The decision to launch CosMc’s as a separate brand is due to the complexity of preparing these beverages in McDonald’s kitchens and the desire to focus on the company’s main menu items. By experimenting with a separate concept, McDonald’s can test the market and safeguard its main brand. The name CosMc’s is derived from an obscure McDonald’s character from the 1980s. While relatively unknown, using the name provides a neutral starting point for the brand. CosMc’s will incorporate elements of the McDonald’s brand, such as the golden arch and familiar terminology. The limited pilot test of ten stores minimizes the financial risk for McDonald’s, allowing the company to learn, experiment, and make adjustments. The insights gained from CosMc’s could inform future strategies, potentially leading to scaling up the business or implementing new ideas in existing McDonald’s locations. Overall, CosMc’s serves as an incubator for McDonald’s to test and innovate in the market.