McCoffee vs. Starbucks?

There’s a fascinating article in today’s online version of “Fast Company”.  It discusses the recent decision by McDonalds to seriously enter the premium coffee wars for 2008.

You can read the article here.

After viewing the video and seeing the “visual” of what McDonalds will build in it’s stores, I’m curious to see how this new venture takes off.  After offering “premium” coffee the last year of so in its stores, the Golden Arches now seem poised to hire baristas to man the espresso machine and start selling coffee beverages about 80 cents cheaper than Starbucks.  This might work in the short term as they market something new, but in the long run, I can’t see this being something that McD’s will do for very long.  Not that Starbucks is my drink of choice.  Anyone who knows me knows that I prefer Peets coffee to Starbucks for a variety of reasons.  More recently, I’ve also grown to love a new player on the coffee market, Forza coffee which also hails from the state of Washington.  Why do I agree with FC about McCoffee?  Here’s just a few reasons…

1. Convenience
Most people who are in a hurry for premium coffee will not want to wait in line with the McDonalds breakfast crowd.  Mixing the two lines will be time consuming and many who are paying a premium for coffee will not mind paying 60-80 cents more for it if they can get it quickly and get back on the road.  The opposite of this is….

2. Atmosphere
McDonalds is spending millions to add a “coffee bar” feel type area to their stores.  Just check out the accompanying video on the FC article and see for yourself.  This might work for a small segment of the Starbucks crowd, namely the soccer mom who has her kids with her and nowhere to go, but as for me, when I go to one of these shops, the idea is to relax.  I DO NOT want to hear kids running back and forth from the play area, crying over a happy meal toy, or the general noise that accompanies the traditional McDonalds crowd.  Part of what you overpay for at these coffee shops is atmosphere.  Nice music, a toned down and relaxed mood, fireplace, and good conversation.  All of this is important to me.  I can’t get that at McD’s.

3. Wi-Fi
Free Wi-Fi is a big sell for me.  Peets doesn’t offer wi-fi period and it frustrates me but I make do when I’m there.  Starbucks expects you to pay for wi-fi at their stores as does Seattle’s Best.  Sorry guys but I can pay the same or a bit less at a classy coffee shop AND get my wi-fi for free at several places where I live.  Forza offers a rich, warm atmosphere with free wi-fi and outstanding Italian roast coffees.  Caribou coffee offers free wi-fi with its excellent selection of java.  Saxby’s is a locally owned company in Colorado that offers excellent house roast and free internet.  On top of that, many privately held treasures of coffee shops around the Denver Metro area offer free wi-fi to their customers.  McD’s wants you to pay for wi-fi in the stores that offer it.  Even our local Chick-Fil-A has free wi-fi if I’m in the mood for a breakfast sandwich.  Last but not least….

4. The Smell
I love the warm, wonderful aroma of a great coffee shop.  I specifically go there for this experience.  I do not want to pay a premium price for coffee and smell a mix of coffee beans and Egg McMuffins.  It sounds selfish but that’s a draw for me and for many others I’m sure.

I think the diversity that McDonalds wants to attain by entering this highly competitive market is one it should avoid.  Perhaps they know more than I and their money will be well spent but I’m of the nature if you’re the best at something you keep hammering away at it and refine the process to keep yourself at the top.  McD’s in the number one fast food chain in America for this very reason.  Although I prefer the taste of a Burger King or Wendy’s hamburger much more than I do the pan fried McDonald’s fare, my kids have spoken and when we do the burger thing, 9 times out of 10, we head to McDonalds.  On this merit alone, McDonalds is to be commended.  By diversifying, they risk quality in other areas that might prove detrimental to their overall strength.

Good luck McDonald’s.  Only time will tell if you succeed but in this corner of cyberspace, I think the long range battle isn’t worth it.