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Burger King joins coffee clash in a big way
Published:February 17, 2010, 7:16 AM
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Updated: August 21, 2010, 4:42 AM
CHICAGO — 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 rollout that begins this summer, executives told the Associated Press on Tuesday.
The move takes a page from rival Mc- Donald’s Corp.’s success with its McCafe line of coffee drinks, which has been credited with boosting its business performance. The deal also adds a new wrinkle to the coffee wars, because the 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 that 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 selling 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. the drinks will be sold all day.
Terms of the agreement were not immediately disclosed, but the deal marks the latest expansion for Seattle’s Best and comes as Starbucks focuses on building the lesser-known brand that 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 have spent recent years expanding 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 by 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.
Tuesday’s announcement marked 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.”
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