It brings a lot of money back to McDonald's.
"It's high margin, and we're under-penetrated there," Kempczinski said.
In other words, even when McDonald's is selling beverages for half the price of Starbucks, McDonald's is still turning a sizeable profit on McCafe drinks.
Customers buy breakfast as well.
If customers are already at McDonald's for coffee, they're primed to buy something off of McDonald's breakfast menu — and vice versa.
Infrequent customers can be turned into regulars.
According to executives, building out the coffee menu is key to making McDonald's a habit, not just an infrequent treat.
It provides a reputation boost.
One of franchisees' biggest complaints about the new drinks was that they were merely copying Starbucks.
"Time-consuming products like this do not belong on McDonald's menu," one franchisee told Mark Kalinowski, a Nomura analyst.
However, at $2, McCafe beverages are significantly less expensive than Starbucks' — and they still push a more gourmet image than most McDonald's menu items. For comparison, a tall caramel macchiato at Starbucks costs nearly twice as much, at $3.95. A tall Starbucks cappuccino costs $2.95.
Source: Business Insider India