Being the top burger chain in the world isn’t enough for McDonald’s. During investor day on Wednesday, the chain revealed its long-awaited CosMc’s prototype, a small-format restaurant where beverages take center stage.
The first location opened in Bolingbrook, Illinois, this month. McDonald’s hopes to have nine more CosMc’s locations by the end of 2024. The Dallas-Fort Worth and San Antonio metro areas were named as future destinations. The brand will take at least a year to analyze results before deciding to move forward.
The menu features a variety of specialty lemonades and teas, blended drinks, and cold coffee. Some examples: Sour Cherry Energy Slush, Tropical Spiceade, and S’mores Cold Brew. CosMc’s encourages customization, with options to insert boba, flavor syrups, energy or Vitamin C shots, and more. The food category is supplementary, but still unique to the rest of the McDonald’s system. Offerings include a Spicy Queso Sandwich, Savory Hash Brown Bites, and Pretzel Bites served with dipping sauces. As for sweet treats, there’s a Blueberry Lemon Cookie Sundae and Caramel Fudge Brownies. There are also classics on the menu, like the Egg McMuffin and McFlurry.
The new location is dedicated to solving the “3 p.m. slump,” the company said.
The drive-thru prototype is equipped with digital menu boards and cashless payment devices. Additionally, Guests are assigned to one of several pickup windows when their order is ready, ensuring they can move quickly through the queue. CosMc’s has its own website and mobile app apart from McDonald’s.
Kempczinski cautioned that this should be treated as a pilot.
“Let me emphasize again, we’re talking about 10 stores,” the CEO said. “The big story isn’t about CosMc’s, per se. The big story is what it says about McDonald’s and our potential. To think, a little over a year ago, this was an idea, and this week we’re opening the first test site.”
The design is forward-thinking for McDonald’s, but also based on nostalgia. CosMc’s references an alien character the brand used in the late 1980s and early 1990s. The company first teased the prototype during its Q2 earnings call in July when Kempczinski called it a “a small format concept with all the DNA of McDonald’s, but its own unique personality.”
“How do we bring new concepts that open up real estate opportunities that under a traditional model would not necessarily be available to us?” the CEO told investors during the summer. “A big reason that we can now look at those is because of the growth that’s happened with the digital and delivery where you don’t necessarily need the big dining rooms that you needed in our traditional restaurant. So you’re now able to look at real estate sites that previously would have been sort of off-limits to us. Those become opportunities.”
Kempczinski said McDonald’s is eager to play in the $100 billion specialty beverage category, which comes with superior margins. It appears to be the brand’s answer to Starbucks, which announced recently that it wanted 55,000 units globally by 2030.
This was McDonald’s first investor day in three years. The company also announced ambitious plans to reach 50,000 stores by 2027, which would mark its “fastest period of growth” in brand history. For perspective, the chain finished Q3 with about 41,200 stores. The projected growth of 9,000 or so locations includes about 900 openings in the U.S., 1,900 in McDonald’s IOM (international operated markets, like France, Australia, and Canada), and 7,000 in its IDL segment (where China is included).