McDonald's has a new weapon in its quest to steal customers from Starbucks
- McDonald's is launching its Cold Brew Frozen Coffee and Cold Brew Frappe on Wednesday.
- The fast-food chain has been building out its McCafé coffee menu over the last year.
- McDonald's expansion into coffee could be hurting Starbucks' sales, according to analysts.
McDonald's is taking aim at Starbucks with two new menu items.
On Wednesday, McDonald's announced it is launching its Cold Brew Frozen Coffee and Cold Brew Frappe. The frozen coffee is a "strong by smooth" drink made with blended cold brew extract, while the frappe tops the frozen cold brew with whipped cream and chocolate drizzle.
Both takes on cold brew will cost customers $2 as part of the $1 $2 $3 menu. The drinks will be available for a limited time starting on Wednesday.
McDonald's beefing up its cold brew lineup comes at a time when the fast-food giant is trying to boost its coffee credentials.
"Last year, McDonald's elevated the McCafé experience and introduced café-quality espresso beverages to its McCafé lineup - Caramel Macchiato, Cappuccino and Americano - all part of the company's journey of building a better McDonald's," the company said in a statement.
This expansion into coffee could be threatening Starbucks' sales.
In a note to investors in May, Bernstein analysts said that McDonald's may be taking sales away from Starbucks, in part due to the fast-food chain's growing list of cheaper coffee options.
Starbucks' strategy depends on attracting both coffee snobs who want espresso-based beverages and customers who crave something sweeter and more creative. Domination of the two different categories - both nitro cold brew and Frappuccinos, for example - allows Starbucks to charge more than a typical coffee shop does.
Now, McDonald's is adopting the same strategy, but at lower prices. Currently, the fast-food giant has a deal that allows customers to purchase any small McCafé drink for $2.