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Dominick Reuter
- McDonald's now has four CosMc's locations open, one near Chicago and three near Dallas.
- The chain will test 10 locations of the small-format, limited-menu restaurant concept this year.
- I visited the original Chicago location. My takeaway? Dunkin' Donuts should be on alert.
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After a year of buzz, CosMc's is up and running.
McDonald's now has four locations open for testing — one near Chicago and three near Dallas — with six more Texas locations slated for this year.
"CosMc's is a small format concept with all the DNA of McDonald's but its own unique personality. Its menu includes new customizable drinks, sweet and savory treats and familiar favorites such as the Egg McMuffin," CEO Chris Kempczinski said at an investor meeting in December, just before the first location opened.
"And guys, please let me emphasize again, we're talking about 10 stores, okay? So let's not get too excited about it. It's 10 stores," he added.
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Keeping in mind the CEO's warning not to get overly excited, I decided to drive to Chicago to give CosMc's a try.
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I arrived a little after 11 a.m., but it was basically empty.
There were no cars in the four drive-thru lanes, and maybe one or two customers in the parking area. I had seen images from the grand opening and the days following that showed lines of cars spilling into the nearby parking lot.
This location is drive-thru only, with four ordering kiosks and three pickup windows.
The Dallas locations have the option for walk-up, according to CosMc's website. If this test teaches McDonald's nothing else but how to run a more efficient drive-thru, it will be a huge win for the company.
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Each order lane had a digital menu, a speaker, and a payment terminal.
"You get a Dutch Bros kind of feeling here," Chicago real estate investor Ian Jalali previously told Business Insider, referring to the Oregon-based drive-thru coffee chain expanding across the US. "They look to be combining the all-day breakfast demand with the Starbucks caffeine demand and mixing drinks that are more kid-friendly than Starbucks."
The menu was definitely simpler than a typical McDonald’s menu, but I had a hard time choosing since it was so unfamiliar.
I was expecting more coffee-centric options but there was a much bigger selection of sugary drinks and unusual flavor combinations.
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A worker patiently waited for me to make my selection over the intercom: a Spicy Queso Sandwich and a S’mores Cold Brew.
While middle-aged dads like myself are probably not the target market for "Berry Hibiscus Sour-Ade" or "Popping Pear Slush," I can definitely picture my school-aged nieces getting excited about this menu. (My kids are still too young for this much caffeine and sugar.)
I paid with a tap and the menu board asked me to sit tight while my order was prepared.
I actually had to back up and pull closer to the speaker because I wasn't expecting the payment terminal to be right there when I first drove up.
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A little cartoon of CosMc, the 1980’s alien mascot, finally made an appearance.
The character — an orange alien with six arms, a blob-like head, and sneaker-wearing feet — first appeared in a commercial called "The Story of CosMc" in 1987.
My order was soon ready and I pulled up to window 2.
With four ordering stations, three windows, and a well-orchestrated fulfillment operation, this location seems like it could process an astronomical number of cars during peak hours.
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The S’mores Cold Brew didn’t really taste like s’mores or cold brew, but it did remind me a lot of Dunkin’ Donuts.
CosMc's has been touted as McDonald's potential challenge to Starbucks, but coffee snobs will probably stick with the Siren. I think the sweet and savory menu poses a bigger threat to Dunkin' Donuts, especially with emerging Gen Alpha customers.
The Spicy Queso Sandwich was quite tasty — easily as good as anything I’ve had at Dunkin’.
Even if CosMc's never fully launches as a standalone brand, McDonald's can tap into its caffeinated, sugary menu to pose a considerable challenge to chains like Starbucks and Dutch Bros., too.
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CosMc’s future is not entirely clear, but that shouldn’t be any comfort for competing coffee chains.
McDonald's has revealed little so far — and may never say much — about this experiment in what the company estimates is a $100 billion market opportunity.
Still, CEO Chris Kempczinski gave some hints in April's earnings call.
"What we're still seeing is there's a lot of interest in CosMc's that's sort of curiosity-driven and, as a result of that, it's tough to get a sense of sort of what are the true kind of underlying performance expectations," he said.
"What we're looking at for the ultimate success on this business is we've got to have a business that's driving comparable or stronger [return on investment] to a traditional McDonald's," Kempczinski added.
That's a tall order for CosMc's as a standalone brand, but that still leaves a lot of room for McDonald's to take a bigger bite out of that market.
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