Fast food chains have become obsessed with coffee. McDonald’s has its McCafé and Wendy’s recently introduced Redhead Roasters™. From a marketing strategy perspective the push for fast food chains to invest in the coffee market is the significant opportunity to earn share and stimulate demand.
Some statistics about Americans and their coffee (source: statisticbrain.com):
– 100 million is the total number of U.S. daily coffee drinkers
– 30 million U.S. daily coffee drinkers drink specialty beverages (lattes, cappuccinos, mochas, etc.)
– Average money spent on coffee each year by coffee drinker is $164.71
– 34% of coffee drinkers who go to premium places when they get coffee out
– 29% of people go to lower price outlets when they get coffee out
Fast food chains are entering this market segment to:
(1) earn share from coffee chains like Starbucks. The coffee market in the US is estimated at $18 billion (source: statisticbrain.com).
(2) stimulate demand by influencing consumers to purchase coffee outside of home/office.
(3) up-sell coffee purchase to a premium coffee beverage (more expensive than a cup of coffee but lower cost than purchasing similar beverage from a coffee chain).
(4) cross-sell menu items. Breakfast is the fastest growing day part for fast food chains (source: cspnet.com). If fast food chains can get coffee drinkers in the door, they can increase sales of food items.
Some examples – McDonald’s & Wendy’s Marketing Coffee:
McDonald’s McCafé has promotions for $1 coffee any size in the United States. This promotion can establish routine purchasing patterns and encourage cross-selling of food items with beverage purchase.
A coffee truck in Midtown Manhattan offering free samples of Wendy’s Redhead Roasters™ iced coffee. The truck was strategically placed outside office buildings to grab the attention and taste buds of consumers taking a mid-morning break.