WSJournal. Burger King Steps Up Coffee Menu
Burger King Worldwide Inc. BKW -1.21% is adding lattes and flavored coffee to its menu, in yet another attempt to catch up to rival McDonald's Corp.
The home of the Whopper has been trying for the past couple of years to broaden its appeal beyond its core 20-something male customer, revamping its menu to include fresher foods like salads and fruit smoothies.
The company said Tuesday it is doubling its coffee lineup to include 10 items, such as flavored iced coffee and vanilla lattes.
McDonald's specialty coffee line, dubbed McCafe, has been a major growth driver for its U.S. business since its inception about five years ago. The flavored and blended beverages are helping it attract more customers during off hours and boost its margins since they are more profitable than a lot of its food.
Burger King is teaming up with Seattle's Best Coffee, which is owned by Starbucks Corp. SBUX +0.21% Going with a well-known brand can help Burger King's new drinks gain more traction, while also making them less costly. Seattle's Best Coffee in particular has become a popular partner for fast-food chains, such as Yum Brands Inc.'s YUM +0.31% Taco Bell and Subway.
Last year, Wendy's took the leap its own proprietary coffee blend—Redhead Roasters—and a more upscale breakfast and bakery menu. It hoped to have the same luck as McDonald's did. But Wendy's later decided not to expand the new breakfast menu to all of its restaurants because it isn't profitable enough everywhere. A spokesman for Wendy's said the company doesn't have a time frame for rolling out Redhead Roasters nationwide, but that coffee remains a key part of its overall strategy.
Burger King hopes its new marketing and menu changes will help it reclaim its position as the No. 2 burger chain behind McDonald's, measured by U.S. systemwide sales. Last year, Burger King fell behind Wendy's, which moved up to No. 2.
Burger King's customer visits slowed in the third quarter from the previous months, especially from people seeking value meals. Burger King has said it would offer a combination of both premium items and value-based promotions this year, to make its restaurants more profitable and attract the broadest range of customers possible.
With coffee for as cheap as $1, Burger King is going up against value-oriented coffee chains, like Dunkin' Brands Inc.'s DNKN -0.93% Dunkin' Donuts, in addition to its traditional fast-food competitors. Dunkin' has plans to step on Burger King's turf as it expands westward in the U.S. and adds more lunch-time menu items.
Another headwind for the chain is speeding up its service, as a number of new products can lead to longer wait times for customers.
Burger King, which re-entered the public market last summer, will report its fourth-quarter earnings on Friday before the market opens.
