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Let’s get ready to rumble! *DING*

McDonald’s, long-rumoured to be America’s top purveyor of coffee (take that, Dunkin’ Donuts!), is setting their sights on Starbucks with their newest effort to sell specialty coffee products. According to an article from AdAge, the product lineup will include “smoothies, frappes and bottled beverages — priced just below that of Starbucks.”

McDonald’s has generally sold beverages as something to accompany their food. Over the years they’ve added Orange Juice, Water, and of course coffee, but drinks always played backup to the trademark products. (in Europe, you can buy beer at McDonald’s, but something tells me they aren’t putting the pubs out of business) The brass at McD’s is seeking to change that perception, and evolve McDonalds’ franchises from a run-of-the-mill fast-food joint to a destination for low-impact socialising and drinks, the way that neighborhood coffee shops have done.

Generally, I’d welcome this brand evolution. If I were buying a cup of coffee, I wouldn’t mind so much the name brand attached to it as long as I enjoyed the product. I am taking a leap of faith on this, assuming that a cup of the brown stuff won’t be packed with 32g saturated fat, and therefore would lose the McDonald’s stigma. This could prove a unique opportunity to open smaller shops that sell a limited menu of cookies, apple pies, and the like.

The only potential problem is that McDonald’s success has always been there position at the bottom of the economic barrel. Fast food, and specifically the big yellow, is a cheap alternative to supermarkets, diners, or any other source of real food. Keyword here being ‘cheap’. Bringing prices up to the level of Starbucks, or even Dunkin’, would seem against their very nature as a brand. More evidence of this is found on their Dollar Menu, which saved McDonald’s in the 90s, when they were feeling the squeeze from competitors and from the health-conscious alike. How will the long-successful, bargain-basement approach to fast food co-exist with the world of luxury coffee?

Being a designer by trade, I have to look at the packaging and potential turf war that will ensue. Here the turf is not square footage in shopping malls, but rather the space between fingers of people on the go. We all know that a major instrument in Starbucks’ rise to power was the appearance and popularity of those striking white cups and green straws, so what will happen when the ultra-cool urban spendsters with disposal income and caffeine addictions start to carry McDonald’s cups? This is a great opportunity for McDonald’s to impress the masses, but if they keep the trend with the above photo, I fear they’ll miss the boat. McDonald’s, unlike Starbucks, doesn’t project a passion for design.

It’s also interesting to ponder in terms of an actual turf war. Here in New York, there is a McDonald’s or a Starbucks virtually everywhere you look. (more Starbucks near office buildings, more McDonald’s in residential areas). If these McDonald’s locations, many of which are open 24 hours, start to draw a different, more affluent audience, they have the potential for massive sales! Starbucks, then, would have to do something significant to fight back against a cheaper, more accessible alternative.

The challenge for McDonald’s is clear. They need to find a way to lure Starbucks drinkers away and into their restaurants instead. A cheaper product is a good start, but the true hurdle is the ‘experience’. Folks don’t go to Starbucks simply for a drink, they go for the journey and for the atmosphere. I can testify that I don’t mind spending 30¢ extra if it means sitting in a plush chair and listening to jazz, rather than being crammed into a plastic booth and harassed by a foot soldier of New York’s militant homeless.

Starbucks has got the reach, but McDonald’s has got power. Starbucks is elegant, but McDonald’s is scrappy — this should be a good fight, so place your bets now!

// a tale of brands & branding, design: packaging
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