As Fast Feeders Struggle With Core Offerings, Premium Coffee Still Wins With Consumers

Feb. 18, 2010
The recession has driven the nation’s fast food chains to new strategies to win consumers...One immediate lesson is that the big players have recognized the importance of good quality coffee.
The recession has driven the nations fast food chains to new strategies to win consumers. Their actions are instructive to refreshment service operators who face the same cost pressures in this recession.One immediate lesson is that the big players have recognized the importance of good quality coffee.Yesterday, Burger King announced it will add Starbucks Corp.'s Seattle's Best Coffee to all its U.S. restaurants in a phased roll-out that begins this summer. The nations number two fast feeder is responding, belatedly, to McDonalds McCafe offering, launched almost a year ago.Chick-fil-A, Hardee's and Subway have also switched to better coffees in recent months. Hardee's and Chick-fil-A developed their own premium coffee blends, while Subway, like Burger King, is transitioning to Seattle's Best Coffee.Meanwhile, the fast food giants have struggled with one of their core offerings, their double cheeseburgers.The price of a McDonald's Double Cheeseburger recently went above $1 in many markets after the company replaced the item on its Dollar Menu with a double burger with just one slice of cheese.Burger King also decided to raise the price of its $1 double cheeseburger to $1.19 starting in April. The chain's franchisee association filed a lawsuit alleging that the company can't require restaurant operators to sell the sandwich for $1 and that they are losing money at that price.The big fast feeders have struggled to convince consumers to pay premium dollar for one of their core sandwiches. But they can win higher prices for premium coffee.Refreshment service operators should know by now that high quality coffee is one core product for which they can charge a premium price.McDonalds has consistently delivered strong financial results during the recession. It has done so by providing and marketing value, consistently and aggressively.