The CosMc’s experience, at least as we first knew it, is coming to an end. McDonald’s on Friday announced, starting in late June, it would begin closing all standalone locations of the beverage spinoff that first landed in December 2023 to much fanfare. But the fast-food leader isn’t abandoning the concept—rather it’s bringing CosMc’s-inspired flavors into traditional stores as part of an upcoming U.S. beverage test.
As the brand hinted on its Q1 earnings, “hundreds” of units would start serving the beverage lineup. “The main goal of the CosMc’s test was to create a launchpad for learning for the McDonald’s system,” the company said in a statement, “and the insights we’ve gathered have given us a whole new way to get closer to our fans.”
“What started as a belief that McDonald’s had the right to win in the fast-growing beverage space quickly came to life as a multi-location, small format, beverage-focused concept,” McDonald’s added. “It allowed us to test new, bold flavors and different technologies and processes—without impacting the existing McDonald’s experience for customers and crew.”
McDonald’s said the “Learning Lab” enabled it to test-and-learn in real customer-facing environments, providing for greater agility and speed. “Quick adds and edits to the menu based on feedback led to more focused choices for our fans as the test continued,” the company explained.
The standalone stores, of which there appear to be five currently, according to the CosMc’s website—Fort Worth, San Antonio (two), and Allen, Texas, to go along with the original Bolingbrook, Illinois, location—will shutter on a rolling basis. The CosMc’s app will be discontinued as well.
One element enabling McDonald’s to make this call, the company said, is its new dedicated category team focused on beverages. The brand’s “Restaurant Experience Team,” announced in March, unveiled a fresh integrated structure for McDonald’s to execute faster and bring ideas to market sooner. It aims at to scale cross-functional product innovations like Best Burger, Big Arch, and McCrispy thanks to menu, supply chain, operations, and “Speedee Labs” teams housed in one place. It also increased McDonald’s ability to develop and scale tech innovation, such as Ready On Arrival, IoT-enabled equipment, and Google Cloud connectivity.
Yet, as the company noted Friday, it also brought forward a newly created category structure with dedicated leaders for beef, chicken, and beverages to offer McDonald’s “better accountability and sharper line-of-sight into what it takes to win in each of these verticals,” CEO Chris Kempczinski said earlier. Or, allow McDonald’s to more directly compete against “specialists.” Say, KFC and chicken, and so forth.
And, in this specific case, beverages. The overall Restaurant Experience team is led by Jill McDonald, who previously directed the International Operated Markets division as president. Charlie Newburger, VP of marketing strategy and new business ventures, moved over to manage the beverage/desserts team.
That will now include layering CosMc’s options (not defined yet) into traditional McDonald’s stores. Some current CosMc’s offerings include iced latte options like Vanilla Matcha, French Toast Galaxy, Oat & Honey Moon, Turmeric Spice and “Signature Galactic Boosts,” such as sour cherry energy, berry hibiscus sour-ade, coconut vanilla, Island Pick-Me-Up Punch, and Blueberry Ginger Boost.
As referenced, one of the reasons McDonald’s chose to split CosMc’s as a standalone pilot—initially drawing drive-thru lines four hours deep—was to keep complexity out of its nearly 13,600 U.S. restaurants. The chain recently announced plans to onboard up to 375,000 employees nationwide as it positions for 900 new domestic units by 2027. McDonald’s opened more than 300 locations across 2023 and 2024.
However, Kempczinski shared with investors in Q1, CosMc’s didn’t quite turn out to be as complex as originally feared. Two key observations surfaced from the field test: One was, while there was some customization, the customer wanted 80 percent of the drink to be “recipe-ed” already. Then, there was customization added on the end.
“So this is not give me a blank slate and I’m going to design endless customization,” Kempczinski said.
The second part was customers wanted McDonald’s food with McDonald’s beverages. A beverage-dominated concept for the chain didn’t fit the expectation as it might for some other competitors in the specialty beverage space. That category, though, is a $100 billion opportunity, Kempczinski said, and one McDonald’s wants to grab a larger piece of.
The brand holds roughly 10 percent of coffee share across the sector but plays immaterially in emerging segments like energy. McDonald’s piloted CosMc’s to see if it could change that.
Given the findings and recent leadership investment, the brand feels it’s now ready to bring those learnings inside restaurants and see how an expanded beverage lineup might resonate. “We cannot wait to share more about our beverage developments and tests in the future,” the company said.
McDonald’s U.S. same-store sales fell 3.6 percent in Q1, hurt by traffic that decreased more than expected. This came after comps dropped 1.4 percent in Q4.
