This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Don't Expect to See McDonald's Fries in Your Freezer Aisle

NEW YORK (TheStreet) - McDonald's (MCD - Get Report) is planning to roll out packaged coffee next year at grocery stores across the U.S., but don't expect to see other Mickey D's goodies in the grocery aisle anytime soon.

McDonald's said on Tuesday that by partnering with Kraft (KRFT)   it plans to "expand the manufacture, marketing and distribution of the McDonald's McCafe brand in the U.S. by packaging its signature coffee for sale in grocery stores and other retailers nationwide." The coffee product will come in ground, whole bean and on-demand single cup McCafe coffees, beginning in early 2015, McDonald's said in a press release.

McDonald's strategy to add exposure at the retail aisle says "this a brand that can compete" with the likes of Starbucks (SBUX) and Dunkin Brands (DNKN) , said David Morris, senior analyst at Packaged Facts, a market research firm that focuses on food, beverage and consumer packaged goods categories.

"All coffeehouse brands are in [packaged] coffee at this point from Peet's to Caribou to Seattle's Best. McDonald's may see this as a natural progress [to] be taken seriously as a coffeehouse brand," Morris said.

In addition, with Kraft as a partner, "there is the opportunity for [McDonald's] to introduce other type of coffee type of beverages down the road," Morris said. However, any potential for frozen hamburgers or French fries is likely not being considered, he added. "Coffee is a far more natural segue into retail," he said. 

Retail sales of coffee in 2013 totaled approximately $10.6 billion, according to Packaged Goods.

Keurig Green Mountain (GMCR) said on Friday that it inked a multi-year deal with Kraft to manufacture and distribute Kraft coffees including the Maxwell House, Gevalia and Yuban brands, into K-cup formats. 

McDonald's roast and ground product will come in 12 oz. bags with flavors including Premium Roast, Breakfast Blend, French Roast, Colombian, and French Vanilla, among others. The single cups will come in three flavors: Premium Roast, French Roast and Premium Roast Decaf.

"We understand there is huge demand for at-home options and we've built great success with our McCafe coffee in restaurants. So, it was a natural next step to provide customers with McCafe coffee to enjoy in their own home," Greg Watson, senior vice president, McDonald's U.S. menu innovation, said in the release.

Coffee has been a bright spot in McDonald's restaurant sales, which have been struggling particularly in the U.S. Second-quarter comparable sales for the U.S. declined 1.5%, McDonald's said last month.

"To complement our emphasis on our core menu, we are sequencing new menu items and also our limited time offers in the four categories where we believe growth will outpace the overall industry. Those categories are premium beef, chicken, breakfast, a category where we are the industry leader and beverages particularly coffee and blended-ice drinks," McDonald's CEO Don Thompson said during an investor presentation at a Sanford Bernstein conference in May.

"We have and sell the most drip coffee in the U.S. We have to reintroduce customers to that. And I think that's very important so we focused on that this year in the U.S.," Thompson said.

McDonald's has apparently been testing the product in select markets this year, according to the Los Angeles Times.

"At this time, we do not have any plans to introduce any of our other menu items into the grocery stores," McDonald's spokeswoman Jessica Schulze wrote in an email to TheStreet on Friday.

-- Written by Laurie Kulikowski in New York.

Follow @LKulikowski

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KRFT $0.00 0.00%
MCD $126.49 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs