Topline
McDonald’s on Wednesday said it would open its first CosMc restaurant in the U.S. this month, shedding light on the highly anticipated, drinks-focused spin-off chain that is inspired by an alien and will see the fast food giant compete with the likes of Starbucks and Dunkin’.
Key Facts
McDonald’s said the first pilot site for the new chain will open in Bolingbrook, Illinois, near the company’s Chicago headquarters later this month with an aim of solving the “3pm slump.”
CosMc—inspired by the company’s little-known alien mascot of the same name, pronounced “cosmic”—is part of a “small-format, beverage-led concept” that McDonald’s said is inspired by nostalgia and “truly out of this world.”
CosMc’s menu is “rooted in beverage exploration” and will feature vibrant colors and unexpected flavor combinations, McDonald’s said, with a sample menu showing drinks including “churro frappé,” vitamin c shots, “s’mores cold brew,” “popping pear slush” and “sour cherry energy burst.”
A pared-down food menu will include McDonald’s staples like McFlurry ice creams and egg McMuffin sandwiches, as well as hash brown bites, cookies, new sandwiches, donuts and pretzel bites.
McDonald’s said it plans to open another nine CosMc restaurants by the end of next year, all of which will be based in locations across the Dallas-Fort Worth and San Antonio metro areas.
Key Background
McDonald’s revealed plans to launch CosMc earlier this year but disclosed little about the precise nature of the new project. The announcement, made at the company’s investor conference on Wednesday, fits within a broader strategy of McDonald’s tapping into the nostalgia generated from its old icons to drum up custom and interest among changing demographics. It follows the stellar success of a marketing campaign based on Grimace—a purple monster character—earlier this year. The expansion into a new sector comes as McDonald’s unveiled plans to open 10,000 new stores worldwide by 2027 in what it says is its “fastest period of growth” in the brand’s history. While the company is already involved in the drinks market through its McCafe brand, CosMc will see McDonald’s push into the speciality drinks market, territory that will see it compete with the likes of established heavyweights Starbucks and Dunkin’.
What To Watch For
McDonald’s said it will evaluate the performance of the 10 CosMc restaurants for at least a year before deciding whether to expand the brand more widely.
Big Number
$100 billion. That’s the size of customizable drinks and coffee market McDonald’s is vying for a slice of, CEO Chris Kempczinski told investors. Kempczinski said the market is growing faster than the rest of the casual dining sector and has better margins.”It’s a space that we believe we have the right to win,” he said.
Further Reading
McDonald’s Plans ‘Fastest Period Of Growth In Brand’s History’ With 10,000 New Stores By 2027 (Forbes)
Meet CosMc, the obscure alien McDonald’s mascot behind its new restaurant spinoff chain (Insider)