Amid coffee rivalry, McDonald's Canada to sell java in grocery stores

Tue Sep 16, 2014 6:53pm EDT
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By Solarina Ho

TORONTO (Reuters) - McDonald's Corp is making its McCafe ground coffee available in Canadian grocery stores this month, the fast-food giant said on Tuesday, part of its broader campaign to win market share in a country long dominated by rivals like Tim Hortons Inc and Starbucks Corp.

The competition to woo Canadian coffee drinkers has intensified in recent years, while rivals have pushed into McDonald's territory by expanding their own breakfast and lunch menus in order to attract new customers and drive up spending per visit.

"Everybody's trying to scramble for customers," the chief executive of McDonald's Canada, John Betts, told Reuters.

Tim Hortons, which claims to brew nearly eight out of every 10 cups of coffee sold in Canada, last month announced a new coffee blend, marking its introduction of a second blend after 50 years in business.

Betts says that since taking over operations in Canada in 2008, his focus has helped McDonald's double its market share in coffee and triple its coffee sales. McDonald's launched the McCafe brand in Canada in 2011.

"You might say it's the thing that turned our business around here, in Canada," said Betts.

"We've had double-digit growth on a compounded basis over the last five years at breakfast time, in terms of traffic and sales. That's a significant category growth for us."

Betts, who started as a part-time worker at McDonald's 44 years ago, said in his six years in Canada, McDonald's has grown its share of the coffee market while opening only a handful more restaurants, compared with the hundreds opened by competitors.   Continued...

McDonald's McCafe coffees are seen at its Harajuku-Omotesando shop in Tokyo in this April 29, 2012 file photo. REUTERS/Kim Kyung-Hoon/Files