• Ad Age, Wednesday, November 14, 2007 10:45 AM

McDonald's is planning to roll out premium coffee drinks--including smoothies, frappes and bottled beverages--priced just below that of Starbucks. The goal: to gain a bigger share of the $60 billion U.S. coffee business; the burger chain now says it holds about 10%.

The fast feeder relaunched its coffee business 18 months ago to rave reviews. "We want to move from beverages as an accompaniment to a beverage destination," says Don Thompson, president of McDonald's U.S., who says the coffees will be rolled out by mid-2009.

The company is also introducing a Southern-style Chicken Biscuit and Sausage McSkillet Burrito as part of its breakfast menu. McDonald's morning business has grown 45% in the last few years, and its newer chicken products, including salads, snack wraps and premium chicken sandwiches have all been very successful.

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