Name: What McDonald's is serving up at its new CosMc's chain
Uploaded: 2023-09-30T07:45:14.000Z
Duration: 3 min 43 s
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McDonald's is getting a little bigger with the introduction of its newest chain CosMc's.

Company says the new chain is quote "Rooted in beverage exploration with new flavors and bright colors."

This small-format beverage-led concept is only available in Bowling Brook, Illinois with plans to expand.

It's the company's first new restaurant concept in the US in decades.

Heather Haden joins us now. She covers restaurants from the Wall Street Journal's Chicago Bureau.

Yeah, I think you could look at Starbucks, Dutch Bros, and some of these other beverage-led concepts that McDonald's has said they've really never had beverages that could compete with some of these coffee-oriented chains that serve all these kinds of iced beverages with flavors and syrups that have become really popular on TikTok with younger consumers.

And so they are giving this a go, so they've opened this one restaurant in a suburb of Chicago and they've said that they're going to test and learn and see what they find as they open a handful of other sites.

So they're going to open about 10 sites, next year there'll be 10 sites mostly in the Texas area

And they're going to see what they find. What do consumers think about this? Is this profitable? But it's definitely a different trajectory for McDonald's.

I mean you won't find a Big Mac or fries on the menu.

It is quite the departure, sort of my view about it.

So what's the business strategy with more drive-through lanes and no dining rooms?

Yeah so this is all about efficiency, really.

So I think these restaurants can be run probably with less labor than a typical McDonald's.

It's also going to be you know not have the really complicated kitchen equipment that a traditional McDonald's would have with all those friers.

So this is probably a more similar to a Starbucks model which is having a few workers behind the bar, making those drinks which could yield much higher returns for McDonald's.

And something that they think is worth testing and trying to see if it works.

And all those drive-thru lanes, I mean that is just getting people in and out as quickly as possible and trying to make money off those sales.

So the fast food market, I don't need to tell you, is already so saturated, so how does this venture breakthrough?

Well, it's certainly got a splashy menu and iconography and this alien and McDonald's is a really marketing powerhouse, I mean they are one of the biggest brands in the world.

A lot of that is because of their marketing budget so I think they will be spending time telling consumers about this.

And again, the company has said they're testing and learning from this and not saying that they're going to take on Starbucks yet.

But they are going to give it a go and see if they can break through like you said it is a very competitive and full market when it comes to restaurants right now but they think this is different and special and unique.

So in the last few seconds, who is the target audience here?

I think it's really about younger consumers.

We're talking about people who want a boost in the afternoon which often is younger consumers who are looking for something cool and fresh and spicy or sweet.

Wow, I feel like I want that too but I'm not sure I'm in that demographic.

Heather Haden, thank you for your analysis.