McDonald's newest menu items should terrify Starbucks

McCafeMcDonald’sMcDonald’s is adding more espresso beverages to the menu.

McDonald’s newest beverages sound like something you’d order at Starbucks.

On Wednesday, McDonald’s announced that it had added a new set of espresso-based drinks to the menu: the caramel macchiato, vanilla cappuccino, and americano. The drinks, along with all McCafé specialty beverages, will be available for $US2 for a limited time.

For comparison, a tall caramel macchiato at Starbucks costs nearly twice as much, at $US3.95. A tall Starbucks cappuccino costs $US2.95, and a caffé americano costs $US2.25.

McDonald’s launched the coffee brand McCafé in the US in 2009. McCafé now generates about $US4 billion annually in the US.

McDonald’s also announced a McCafé brand revamp, debuting a new logo and cups that feature a cleaner, more minimalist design, and colours that will change based on the season.

McCafeMcDonald’sThe old McCafĂ© cup design versus the new cup design.

The more sophisticated new beverages and updated branding are part of the fast-food giant’s plan to grow its coffee business and compete with chains such as Starbucks.

Earlier in 2016, McDonald’s launched a successful campaign to highlight McCafé’s low prices. A deal that priced coffee and soft drinks at $US1 and other McCafé beverage at $US2 helped grow US same-store sales 1.7% in the first quarter and 3.9% in the second quarter.

Executives have said that coffee is a crucial part of the company’s plan to convert casual diners to loyal customers. To do so, McDonald’s is “elevating and leveraging the McCafé coffee brand,” according to the company’s 2016 annual report.

McDonald’s also announced Wednesday that it is launching a new bottled McCafé Frappé line in grocery stores. The ready-to-drink Frappé will come in three flavours: caramel, vanilla, and mocha.

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