McDonald's to launch bagged coffee in Canada

Fri Oct 26, 2012 2:13pm EDT
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By Allison Martell and Lisa Baertlein

(Reuters) - McDonald's Corp will start selling bags of its ground coffee in some of its Canadian restaurants in November, its Canadian chief told Reuters on Thursday, in a likely challenge to rivals like Starbucks Corp, Dunkin' Donuts and Tim Hortons Inc.

The McCafe-branded coffee, priced at C$6.99 for 340 grams (12 ounces), is being launched as McDonald's steps up its expansion in Canada after holding back for more than five years.

Representatives for McDonald's said they were not aware of the company selling bagged coffee anywhere outside Canada.

Earlier this month, market watchers noticed McDonald's had filed with the U.S. Patent and Trademark Office to use its McCafe brand for "ground and whole bean coffee." Some speculated that the company might launch bagged coffee in the U.S. market.

Speaking in an interview, McDonald's Canada President John Betts credited the coffee business for a turnaround at his unit and said there was the potential for a much larger footprint across the country.

"This year, we're going to build more restaurants than we've built in the last seven or eight years," he said on Thursday. "Next year, it's going to ramp up from that."

Around 30 new stores will open by the end of 2012, Betts said. He did not give specific figures for future periods. McDonald's has about 1,400 outlets in Canada.

Coffee is not an obvious point of entry in Canada, where Starbucks is ubiquitous and doughnut and coffee chain Tim Hortons borders on a national symbol. But between McDonald's coffee push and Tim Hortons' expanding lunch menu, the two chains are increasingly going head to head.   Continued...

A McDonald's sign is shown at the entrance to one of the company's restaurants in Del Mar, California September 10, 2012. REUTERS/Mike Blake