McDonald's to launch bagged coffee in Canada

Tim Hortons, Starbucks and Dunkin' Donuts already sell packaged coffee.

A U.S. spokeswoman for McDonald's said this is not the first time McDonald's has sold bagged coffee, but did not offer other examples.

Privately held Mother Parkers Tea & Coffee, McDonald's long-time coffee supplier in Canada, will also provide the bagged coffee for the chain.

MCDONALD'S IN TOUGH MARKET

Betts' upbeat message stands out against last week's earnings release, when McDonald's reported its worst quarterly restaurant sales growth in nine years thanks to tough competition in the United States.

All the Canadian stores will give out free takeout coffee next week, Betts said, the eighth round of that promotion, which the company has also run in some U.S. stores.

In the company's home market, fast-food players are dueling for customers with aggressive promotions, and bagged coffee and similar products have become a significant line of business.

In Starbucks' fiscal year ended October 2, 2011, bagged coffee, bottled drinks and coffee served in hotels and offices accounted for $1.06 billion of its $11.70 billion in overall revenue.

Still, Bernstein Research analyst Sara Senatore said a McDonald's entry into the bagged coffee market would not necessarily shake up the U.S. market.