McDonald's Wants Starbucks Premium Coffee Business

Posted on May 5, 2009

The McDonalds-Starbucks wars continue to heat up. Starbucks countered McDonald's entry into the coffee market by launching some tasty artisan sandwiches to take a bite out of McDonald's breakfast sales. Now McDonald's is striking back with espresso-based premium coffees branded as McCafe and an aggressive $100 million marketing campaign to try and get people to try them.

AdAge reports that McDonald's is spending at least $100 million on its McCafe campaign. The fast food giant has plenty of money to spend on ads when it wants to.

While the Golden Arches won't detail how much it's spending on McCafe, the new product platform is expected to receive an outpouring of more than $100 million fanned out across TV, print, radio, outdoor, internet, events, PR and sampling beginning early this week. There's a lot riding on that budget: McCafe is expected to add about $1 billion to McDonald's bottom line in the U.S. -- about $75,000 per restaurant -- and the chain is banking on national advertising to realize that lofty financial goal.

Starbucks also recently lowered the price of an iced grande coffee to $1.95. Nation's Restaurant News says the prices for McDonald's McCafe coffee ranges from about $2.29 for a 12-ounce coffee to $3.29 for a 22-ounce cup so these aren't low-priced drinks.

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