Currently, there is significant media attention on CosMc’s, which is McDonald’s new chain. CosMc’s will introduce a range of fresh beverage choices such as lattes, slushies, and teas, surpassing the offerings available at your local McCafe.

CosMc’s is set to launch in 10 locations throughout 2024 in the USA.

CosMc’s is named after CosMc, a little-known McDonald’s character from the 1980s which one company executive described as “part alien, part surfer, part robot”

McDonald’s aims to appeal to customers seeking a fast afternoon boost by providing a variety of savory and sweet snacks, along with personalized coffee beverages. Currently, CosMc’s operates as a drive-thru-only establishment, allowing customers to pay at the stall.

It surely sounds like an exciting new initiative by one of the world’s best-known brands ie McDonald’s.

I personally like the bright, bold, in-your-face colors of CosMc’s which many will find cool and appealing.

Starbucks vs CosMc’s

There have been recent online discussions suggesting that CosMc’s is targeting Starbucks. I find this amusing and absurd. These individuals seem to lack an understanding of marketing. It’s evident that the target audience for Starbucks and CosMc’s is quite different.

It’s not just about Coffee

Starbucks is not just any other coffee shop. It is an experience . There is a reason this brand has expanded globally and continues to lead in the premium coffee segment.

Starbucks is renowned for its emphasis on personal connections. Whether you visit Starbucks for a meeting or to catch up with friends, the focus is on face-to-face human interaction. In contrast, CosMc’s currently only offers drive-thru service.

One can spend hours inside a Starbucks meeting people, reading, working on their laptops, etc which ultimately helps Starbucks sell you more coffee, desserts, and sandwiches.

Target Segment

Andrea Hernandez, the founder of Snaxshot, a food-and-beverage insights platform, suggests CosMc’s may have something to offer Gen Z and Gen Alpha consumers 

“Starbucks was the millennial drink, but Gen Z is all about counter-culture – they’re looking for something else,” says Hernandez. Particularly appealing are “beverages that you can remix exactly how you like them”

Hernandez also feels this move by McDonalds to take a new approach might be CosMc’s playbook for success. “Dunkin’ is about utility – ‘America runs on Dunkin’ – and Starbucks is more of a luxury lifestyle brand,” she says. “To succeed, McDonald’s has to go toward a different type of drinker.”

So clearly both brands are talking to different Target audiences.

Pricing

According to a recent analysis by William Blair, a research firm, a comparison of prices between Starbucks and the original CosMc’s restaurant revealed a varied disparity in beverage prices. For instance, brewed coffee and hot tea were found to be approximately 36.5% less expensive at CosMc’s compared to Starbucks.

The difference in prices is reduced when it comes to the category of specialty or customized beverages. CosMc’s specialty flavored cold brews are only 5% cheaper than Starbucks’ comparable drinks, and its cold brew is only about 5.8% cheaper than a similar Starbucks product.

For devoted Starbucks customers, the cost is not a concern. They visit for the ambiance and the exceptional quality of their coffee, desserts, and snacks. I believe Starbucks customers are not overly sensitive to pricing and won’t switch solely based on price. Otherwise, numerous local cafes and coffee shops already offer cheaper coffees, sandwiches, and desserts.

Conclusion

In my opinion, CosMc’s will gain a small portion of the US coffee market, currently dominated by Starbucks, by focusing on a distinct target audience. 

With its continued focus on innovation, excellent service, and customer centricity, Starbucks will continue to dominate the US and global markets in the foreseeable future.

Disclaimer : The views expressed here are my own personal views