Battle of the Brands

I guess the Iced Hazelnut coffee that McDonalds introduced earlier this year was simply an experiment meant to test the coffee waters. You see, the fast food giant had long since been a staple for those looking for a quick and cheap pick-me-up. Walk into any McDonalds during the evening hours and you'll often see a pack of parents picking up a quick meal for their kids before heading home. There are a few who have the regular old coffee while sitting there but these days, Starbucks has spoiled us to the point that we all want something or the other that is a blended coffee drink with various flavors and shots of things we really don't need but ask for anyways. So it was natural for McDonalds to attempt to get into the market by offering up something similar of their own.

An obvious step would have been to partner with Starbucks to offer up brewed Starbucks coffee which is good enough for some patrons, but for many, it's not the cup of coffee alone but the accoutrements that go along with it that they find appealing. Why have a large cup of coffee when you can have a venti double shot mocha cappucino? It just sounds so much more.... mature. Now the iced hazelnut coffee that McDonalds serves and continues to serve was one of their first forays into a drink not aimed at kids (like their McFlurry) and it quickly became popular. But if you've seen how its prepared, it's basically mixing the hazelnut syrup with the coffee, adding milk and shaking. Not much to it is there? The baristas at Starbucks would point out that that's the biggest difference in the quality of the coffee. And that may be true but how many actual coffee junkies are out there to tell the difference?

I enjoy having Starbucks coffee. I love it so much that I've had it in such exotic locations as London and Dubai and I continue to have it here at home. Still, once in a while there's that desire to just have a quick coffee drink that will serve as a pick me up and send me along my merry way. Despite the virtual explosion of Starbucks locations out there, unless you go at an odd time, you will end up waiting for your coffee for a few minutes. Compare that to McDonalds where even in the height of rush time, your coffee will generally be served to you within moments. I know both Starbucks and McDonalds have standards as to how quickly to serve customers but the difference is that Starbucks coffee is never pre-prepared and it takes time to create, whereas the current version of McDonalds coffee is either prebrewed or one of those squirt and shake into the cup deals. If time is a major deciding factor then Starbucks is definitely in for some stiff competition.

There were complaints from consumers about a year ago about the time it takes to get your drinks at Starbucks and I would argue that that is because the milk is always freshly steamed, the mixes made when ordered and the espresso shots freshly ground and brewed when your coffee is ordered. If the deciding factor is quality over speed then Starbucks will definitely have a leg up. In terms of locations, I'd say it's probably neck and neck as far as area saturation is concerned. You can't go too far in most major cities without running into either a Starbucks or a McDonalds. Plus the fact that you get slightly more drink for lesser amounts of money means that those looking for a quick drink rather than a drinking experience will turn to McDonalds so again, Starbucks is in for a run.

I don't think this spells the end for Starbucks but I do think that it means that perhaps someday there will be some role reversal. McDonalds is already making strides to turn their restaurants into places that people will feel comfortable lingering in and enjoying time in. Starbucks continues to push to improve service time and saturate the market even more with their products. Starbucks already has a reputation for being a slightly upscale coffee house despite the fact that it too has McDonalds size market penetration but it will need to continue to take strides to keep in competition with McDonalds if it is to survive.