McDonald's and Kraft to test grocery coffee sales in 2014

Reuters

By Phil Wahba and Lisa Baertlein

Oct 30 (Reuters) - McDonald's Corp and Kraft FoodsGroup Inc plan in 2014 to test sales of McCafe-brandedpackaged coffees at grocery stores and other retail locations inmultiple U.S. markets, the companies said on Wednesday.

The tests will include packages of whole bean and groundcoffee as well as "single-cup" options, which typically includeK-cups for Green Mountain Coffee Roasters' popularKeurig brewer. Test markets and pricing were not disclosed.

"We want to work with McDonald's to help consumers enjoyMcCafe premium coffee in the comfort and convenience of theirown homes," Kraft Foods CEO Tony Vernon told analysts on aconference call, disclosing the test for the first time. Kraft will handle the marketing and distribution of the McDonald'sbrand coffee.

McDonald's said in a statement it was "building on themomentum of our McCafe beverages in our restaurants by expandingthese options."

Sales at McDonald's have gotten a big boost from itsintroduction of McCafe beverages, which include coffee andespresso drinks like those popularized by Starbucks Corp. Coffee chains such as Starbucks and Dunkin' Donutssell packaged coffee and K-cups through their shops and otherretailers.

McDonald's last year starting selling packaged coffee atsome of its Canadian restaurants.

Kraft got back into the U.S. premium grocery coffee businessin August 2011, with a deal to sell Gevalia coffee insupermarkets. Vernon said on the call Gevalia sales haveexceeded company expectations.

Kraft had a contentious split with Starbucks in March 2011.Starbucks on Wednesday said it expected to resolve its disputebefore the end of calendar 2013.

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