Starbucks Merges With Burger King


It's Not A 100% Starbucks Barista Style Merge, But The Iced Alternatives Make This Connection Interesting

WGN -- Burger King plans to launch a massive new coffee line as it tries to overhaul its breakfast menu and boost its slumping business.

The nation's No. 2 burger chain will add Starbucks Corp.'s Seattle's Best Coffee to all its U.S. restaurants in a phased roll-out that begins this summer, executives told The Associated Press. The move takes a page from rival McDonald's Corp.'s success with its McCafe line of coffee drinks, which have been credited with boosting its performance. The deal also adds a new wrinkle to the coffee wars, because McDonald's coffee campaign has been seen as taking aim at Starbucks.

"We'll be delivering a better cup of coffee," said John Schaufelberger, senior vice president of Burger King's global product marketing and innovation, who said improving the company's breakfast business is among the chain's "top strategic priorities."

Under the effort, more than 7,000 Burger King restaurants will begin sell the coffee along with iced varieties that also come with a choice of plain, vanilla or mocha flavors and whipped toppings. While prices will be set by franchise owners — who operate 90 percent of the chain's locations — the brew's suggested prices range from $1 to $2.79. Drinks will be sold all day.

Terms of the agreement weren't disclosed. But the deal marks the latest expansion for Seattle's Best and comes as Starbucks focuses on building the lesser-known brand it acquired in 2003. In the fall, Starbucks signed a deal with Subway locations to sell the roasted coffee in 9,000 locations — more than doubling the number of U.S. sites where the brand is sold.

Most fast-food restaurants, which spent recent years expand their early morning business, have seen a decline in breakfast diners as unemployment climbs and fewer workers stop in on their way to work. In 2009, total visits to fast-food locations across the country slipped 3 percent, while traffic during breakfast hours slipped 2 percent, according to research from The NPD Group.

But selling a good-tasting cup of coffee, which often comes with a fat profit margin, is generally considered a key part of any successful breakfast effort — in good times and bad.

Five years ago, Burger King launched its BK Joe coffee brand, which will be retired as Seattle's Best takes over.

Tuesday's announcement marks the beginning of the first sizable change to Burger King's breakfast lineup, which was last revamped in 2007 when the restaurant chain, based in Miami, launched its breakfast value menu.

"You should expect to see new and improved products from Burger King at breakfast," Schaufelberger said.

Morningstar analyst R.J. Hottovy said the move allows Burger King to sell a highly profitable product and try to bring back customers.

"To me it's just a way to offset the weakness in the breakfast business," Hottovy said. "It's something most (fast food) restaurants recognize could be a sales driver, and helps the bottom line."

Source: WGN

Posted by DJV at Wednesday, February 17, 2010 10:08 AM
Categories: Food, News
Tags: Blog Music DJV Blog DJ V DJV Chicago
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