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Want fries with that latte?

McDonald's starts offering Starbucks-style coffee this year.

By MARK ALBRIGHT, Times Staff Writer
Published January 8, 2008

ADVERTISEMENT [Getty Images (2003)] McDonald's halted the first U.S. test of offering gourmet coffee at its stores because coffee lovers didn't like the smell of fried food.

Baristas under the Golden Arches? It could hap ... no ... it's going to happen.

"Our baristas will be able to whip up any of the custom drinks available at Starbucks, only without the fancy names," said Blake Casper, who runs 51 of the 180 McDonald's stores in the Tampa Bay area and plans to make the switch late this summer. Nationally, 14,000 McDonald's stores will have specialty coffee bars fielding custom cappuccino orders, pouring frappes and even selling whole beans by the bag by the middle of 2009.

The move dramatically escalates McDonald's' battle over breakfast beverages with Starbucks and Dunkin' Donuts and, experts say, will prove whether Americans' thirst for more expensive gourmet coffee peaked.

"This will be a telltale year for specialty coffees, when we find out just how far they can push it," said Bob Golden, executive vice president of Technomic, a Chicago restaurant research firm. "McDonald's jumping into a premium roast and bumping the price a quarter to $1.25 a year ago was a successful no-brainer. This is much bolder - doubling prices to 75 cents below Starbucks."

Starbucks cried foul last year when Consumer Reportsrated McDonald's new dark-roast brewed premium coffee tops.

Now the burger giant forecasts that its first-year specialty coffees will add $1-billion to its $21.6-billion annual sales, according to the Wall Street Journal.

Indeed, gourmet coffee giant Starbucks Corp.'s sales have been soft for two years. That led company officials to blame the weather, then the economy and finally openly wonder whether they should speed the slow-moving lines. Starbucks, which gets 80 percent of its revenue from products consumed elsewhere, has been adding drive-through windows at its 8,000 U.S. stores to bolster breakfast traffic. McDonald's, which gets more than half its breakfast business at the drive-through window, will add its version of Starbucks drinks to the drive-through menu.

In contrast, McDonald's fully recovered from a 2003 slump that saw its stock plunge as low as $12.50. The company re-engineered kitchen speed, added healthier menu options and has racked up 54 consecutive months of increased sales. Its stock closed Monday at $58.03 a share, up 98 cents.

McDonald's stores will be outfitted with a $100,000 coffee bar. One side will serve front-counter customers, and the other will supply drinks for the drive-through window. The bar will be staffed by a barista trained to take orders in the lingua franca of coffee snobs known for bellowing exotic orders like "skinny latte, double shot, dry, shaken not stirred."

The big "If": Can McDonald's can pull it off without confounding intricate kitchen staff choreography. Also, are coffee connoisseurs willing to pull their cars into a waiting lane if their coffee order isn't ready when they are?

"The jury is still out on whether McDonald's can pull this off without disrupting food service they worked so hard to speed up," said Dennis Lombardi, executive vice president of W.D. Partners, a Dublin, Ohio, food industry consultant. "But they have a real shot, if you will."

McDonald's has already used automated equipment and baristas at its successful McCafes in Argentina and Australia. One reason the U.S. test was dropped four years ago: Coffee-only fans didn't like the strong aroma of burgers and fries cooking.

At a relaxed Starbucks afternoon coffee klatch in downtown St. Petersburg, regulars said they would try a McDonald's latte if they were there for a burger.

"But I wouldn't go there just for coffee," said Mark Proteau, 51, "It's still a McDonald's."

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

[Last modified January 7, 2008, 22:28:43]