McDonald's eyes global coffee growth

McDonald's wants to be a bigger player in the global coffee business.

The world's biggest hamburger chain on Thursday highlighted beverages as one of its key growth opportunities at a daylong presentation for investors.

McDonald's chief executive Don Thompson noted that coffee is the fastest growing category in its global drinks business and noted that the company has less than its "fair share" of the market. When asked to identify competitors in the space, Thompson chose to keep the discussion broad.

"Anyone that stops off to get a cup of coffee anywhere, that's an opportunity," Thompson said.

The push comes as Starbucks continues to enjoy strong sales growth, despite the lacklustre economy that other chains have blamed for underwhelming results. In the latest quarter, for example, Starbucks said global sales rose 7 percent at locations open at least a year. The figure edged up 0.9 percent for McDonald's.

This fall, McDonald's added a pumpkin spice latte to its roster of McCafe coffee drinks; Starbucks has had a version for years.

Starbucks, meanwhile, is stepping up its food business. The Seattle-based company recently revamped its sandwiches and introduced new salads and baked goods to become more of a lunch destination.

About a third of purchases in the U.S. include food and Starbucks is looking to push that figure up.

But Starbucks CEO Howard Schultz doesn't like comparisons to chains such as McDonald's and Dunkin' Donuts.

"They're in another business they're fast-food," Schultz said in an interview on CNBC earlier this year.

Overseas, McDonald's also has about 4,200 separate McCafes that are either sectioned off from the main restaurant or stand-alone locations. McDonald's says it plans to add another 350 to 400 such McCafe locations next year.

Still, Thompson stressed that McDonald's remained in the restaurant business.

"We're not trying to be something we're not," he said.

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a3 at 24 Apr 2014 07:09:07 Processing Time: 1372ms