Burger King brews up fancy coffee
The fast-food chain is adding lattes and iced coffee to its menu of Whoppers and fries, but Starbucks isn't worried.
Want a latte to go with your Whopper? Burger King (BKW) is rolling out 10 premium coffee drinks, including lattes, iced coffee and flavors such as caramel and mocha, seeking a foothold in the $32 billion coffee industry.
While it might seem like a direct shot at Starbucks (SBUX), the ubiquitous coffee chain known for its pricey double lattes and Frappuccinos, Burger King's move into the realm of fancy coffee will actually profit Starbucks.
That's because Burger King has partnered with Seattle's Best Coffee, which is owned by Starbucks. In essence, every time a customer orders a cup of Burger King coffee, Starbucks will make a profit, according to USA Today.
But that doesn't mean Burger King isn't gunning for the competition. In this case, its rival happens to be McDonald's (MCD), which has gained fans for its McCafe offerings ranging from cappuccinos to iced caramel mochas.
"People want to one-stop shop," Malcolm Knapp, a restaurant industry researcher, told USA Today.
Burger King said the move was designed to appeal to "evolving consumer tastes," meaning that fancy coffee drinks -- considered a luxury only two decades ago -- are now part of the standard American diet.
It also doesn't hurt that coffee drinks are more profitable than hamburgers or fries, Knapp added.
Coffee drinking is on the rise. Last year, 54% of people between the ages of 25 to 39 years old said they drank coffee daily, compared with 44% in 2010, according to the Specialty Coffee Association of America.
Burger King is introducing the coffee drinks ranging in price from $1 (for a "smooth roast" coffee) to $2.29 for a latte. The drinks will be introduced in March.
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