McDonald's kicks up its drink options

The company is counting on frappes, smoothies and lattes to bring in $1 billion this year.

By Kim Peterson Jul 12, 2010 2:56PM

fast food © Bananastock/JupiterimagesPop quiz: What's expected to add $125,000 to the sales of each McDonald's restaurant in America this year?

The answer is beverages. And that's why McDonald's (MCD) has pounced on frappes, smoothies and other drinks as the economy struggles to improve.

McDonald's beverage line is also estimated to contribute $1 billion to the company's bottom line this year, Advertising Age reports. The company officially begins advertising the beverages this week.

Even before the ad push, McDonald's is seeing nice customer response, writes Emily Bryson York. Frappes helped boost same-store sales by 3.4% in May, the company said, and smoothies were also selling well.

 

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McDonald's has already spent considerable time and money on its McCafe line of drinks, hoping to make a run at Starbucks (SBUX). Now it's offering the new drinks in 14,000 U.S. stores, York writes. And it will begin an education for campaign for people who aren't too familiar with a frappe.

Women are the most likely target audience here, York writes.

"Another important aspect of the premium beverages is the ability to build business in off-peak times," York adds. "While the drinks are an easy upgrade from a coffee or soda, smoothies and frappes also fit the bill for a late-morning or midafternoon snack."

McDonald's is also tinkering with its milk shakes, York writes. They're being served in clear cups with whipped cream and a cherry. And the company is doing a small test of ice-blended strawberry lemonade.

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