NEW YORK (TheStreet) - McDonald's (MCD) 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.
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.
Read More: Will McDonald's (MCD) Stock Be Affected By Increased Russian Scrutiny? -- Written by Laurie Kulikowski in New York. Follow @LKulikowski
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV