McDonald’s targets US indulgence market with new CosMc’s café concept

McDonald’s will scale CosMc’s to 10 stores across Texas next year as part of a 12-month trial | Photo credit: McDonald's

US fast-food giant McDonald’s is trialling a new indulgence-focused café concept, CosMc’s, in Illinois.

The CosMc’s menu includes a range of indulgent blended and iced coffee beverages, including Churro Frappe, S’mores Cold Brew and Sour Cherry Energy Burst. Customers can customise their beverages with popping boba bubbles and flavoured syrups. CosMc’s will offer select McDonald's menu items, such as the McMuffin, alongside a new range of sandwiches and snacks. 
 

McDonald’s intends to scale the small-format, beverage-led concept to 10 locations across Texas in 2024. The Chicago-based business will then assess 12-month sales performance before deciding whether to expand CosMc’s across the US and internationally. 

In a press release McDonald’s said it was ‘exploring how we might solve the 3pm slump’, indicating the business is seeking to broaden beverage day-part sales and seeking to harness untapped opportunities in the indulgence beverage category. 
 

As a standalone sub-brand, CosMc’s will operate separately from its McCafé menu range, which was added to McDonald’s US menu in 2009. The fast-food chain opened its first McCafé outlet in Melbourne, Australia, in 1993 and currently operates the brand across more than 50 markets globally.

While there are no standalone McCafé stores in the US, the CosMc’s launch indicates McDonald’s sees long-term growth opportunities in the $49.5bn US branded café segment.

World Coffee Portal research found 24% of US consumers surveyed in 2023 purchase iced coffee on a daily basis – up 7% on 2022 – with 30% having purchased an iced coffee from a coffee shop within the last 12 months. Indicating the growing popularity of blended beverages, coffee-based frappes are the fifth most popular beverage type, purchased by 22% of consumers over the last 12 months – ahead of americano and espresso at 15% and 14% respectively. 

US operators perceive iced coffee as a key sales channel, with 50% of industry leaders surveyed highlighting the category’s popularity as the most important consumer trend shaping the US branded coffee shop market – ahead of the growth of specialty coffee (32%) and drive-thrus (29%).  

US branded café market leaders – Starbucks, Panera Bread, Dunkin’ and Dutch Bros – have all scaled their cold beverage menus in recent years to cater to rising consumer demand. Market leader Starbucks reported 75% of beverage sales across its 15,800-plus US stores were cold in the third quarter of 2023. 

McDonald’s CosMc’s launch was announced at the fast-food chain’s 2023 Investor Day, in which it also revealed plans to open 10,000 new stores across the next three years to reach 50,000 outlets globally by 2027.