Kraft, McDonald’s testing coffee partnership

by Eric Schroeder
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NORTHFIELD, ILL. — A few years after losing its partnership with Starbucks Coffee Co., Northfield-based Kraft Foods Group, Inc. is once again turning to a food service provider to help bolster its beverage business. Tony Vernon, chief executive officer of Kraft, said during an Oct. 30 conference call with analysts that Kraft and McDonald’s Corp. are testing a retail coffee launch featuring McCafe Premium Coffee.

“Kraft and McDonald’s are out selling a test market as part of a comprehensive coffee collaboration in the U.S.,” Mr. Vernon said. “We want to work with McDonald’s to help consumers enjoy McCafe Premium Coffee in the comfort and convenience of their own homes.

“This test will deliver McCafe in new formats. It will be a multiple test-market test, including roasted and ground bag coffees, and single cup offerings, in the coffee aisles of retail stores.”

The test is expected to take place next year, but potential markets were not disclosed.

Mr. Vernon called McDonald’s “a global icon,” with “proven success” and “branding innovation.”

“They are a great partner to complement what is our vast coffee expertise,” he said. “Products, process and people, to take the great McCafe brand to consumers and retail stores. And we look forward, and we are excited about this upcoming test market. And we think it complements our offerings. You know we have Maxwell House. You know we have a strong Gevalia. We are in month 18, and we have exceeded our expectations. And you know about our K-cup approach through Tassimo- and Keurig-compatible cups. We believe in coffee, and we have been telling you how much we believe in it. And I hope that this action proves our commitment to this great category.”

Kraft, which makes the Tassimo Brewing system, had been partners with Starbucks on a line of Starbucks coffee Tassimo T-Discs before Seattle-based Starbucks pulled out of the partnership citing “unacceptably poor” products. Kraft sued to stop Starbucks from terminating the contract, but a judge ruled in favor of Starbucks allowing the contract to end. Starbucks subsequently partnered with Green Mountain Coffee Roasters to create Starbucks K-Cups for the former’s Keurig system.
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