McDonald's selling bagged coffee in Canada

The company isn't saying whether it will expand the sales to the US, but it sure looks that way.

By Kim Peterson Oct 26, 2012 12:59PM
A sign outside the fast-food chain McDonaldMcDonald's (MCD) will soon start selling ground coffee in bags in Canada, a move that appears to be a test before expanding to the U.S.

The coffee, sold under the McCafe name, will cost about $7 for a 12-ounce bag, reports the Calgary Herald. We knew this was coming, since McDonald's recently filed a trademark registration related to selling ground and whole-bean coffee. The company has 1,100 locations in Canada.

The move was a head scratcher for the Herald, which noted that Starbucks (SBUX) is everywhere in the country and Tim Hortons (THI) "borders on a national symbol." But that's exactly why Canada is a good place to test bagged coffee. If McDonald's can make it there, it can make it anywhere.

So far, though, the company is staying quiet about any plans to expand bagged coffee beyond Canada.

McDonald's took this route before launching its McCafe specialty coffee drinks, The Associated Press reports. The company started McCafe in Australia in 1993 and expanded it to Europe before bringing it to the U.S. in 2009.

"If you want to be a credible player in the restaurant industry, you have to have a great cup of coffee," John Betts, the president of McDonald's Canada, told AP.

So far, it looks like McDonald's will sell the bagged coffee in only some of its Canadian restaurants and not in grocery stores. If it decided to expand to groceries, it would run up against some of the biggest names in the food business. JM Smucker (SJM) owns the Folgers brand, Kraft (KRFT) owns Maxwell House, and Nestle (NSRGY) owns Nescafe.

Those three giants, along with Starbucks and Green Mountain Coffee Roasters, are the five biggest players in the market for packaged coffee, according to an IBISWorld report mentioned in The Huffington Post.

McDonald's shares have disappointed investors recently. Shares have fallen from the $100 mark at the beginning of the year to trade Friday at $86.73.


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4Comments
Oct 26, 2012 8:25PM
Oct 26, 2012 4:02PM
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OK, on to Mcanada to buy some McBags of McCoffee. On a return trip there might be some McDuty charges to pay.
Oct 26, 2012 4:17PM
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McD's coffee is good; selling it outta the restaurants seems silly though; maybe selling it at grocery stores like Dunkin Donuts does makes sense.  Starbucks is only good as a 500 calorie hot shake in my opinion; otherwise it's overroasted and bitter.
Oct 28, 2012 10:58AM
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Then Dunkin and Starbucks....Will probably be selling 20-cent Sliders within a year...wooohoooo!!
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