Surprise, surprise, MacDonald's customers are the most loyal to their coffee!

by chee Leng (on coffee makers)
(Singapore)

This really caught me by surprise, when it comes to customer loyalty, I would think Starbucks or Dunkin Donuts would lead the race.

But in a survey done by Customer DNA and reported by Marketwatch.com, Macdonald's has the most loyal customers!

This survey is taken from a sample size of 15 000, and they are asked where they would likely go for their second cup of coffee after their current purchase, i.e. Macdonald's, Starbucks, Dunkin Donuts etc.

The results are, 30% that bought MacD say that they would buy it elsewhere, but more than 50% that buy from Starbucks or Dunkin Donuts say that they would buy from other places!

This meant that lesser MacD customers are going to buy from other coffee shops, so their customers are more loyal!

From the same street survey, it seems that people prefers Dunkin DOnuts and Starbucks, but cost is keeping them away from these two chains.

Moreover, over the years MacDonald's coffee has improve and is listed as acceptable thus people is "okay" drinking it.

I shared some time back that MacD sold the most coffee in UK, and moving forward, it seems that they might repeat it in US as well.

US is the holy ground of coffee, they spend more money on coffee than anywhere else in the world. If you captured this market, your sales and profit would soared.

McD would always be able to gain economy of scale with its huge distribution and mass purchasing. So, if it is a price comparision, Starbucks and Dunkin Donuts would lose out.

Interestingly, both Starbucks and Dunkin Donuts are slugging it out at each other couple of years ago, trying to prove who has the better coffee.

Guess, in the end, it doesn't really matter to the end consumers -MacD with the coffee that is a few cents cheaper won them all!

It also seems that Dunkin Donuts and Starbucks are also preparing the fight for market share in another route, and the same route -partnering with Greem Mountain Coffee Roaster, Keurig Single serve coffee maker.

Both are partnering to have their coffee served through keurig K-cups and are selling keurig in their outlets.

The high cost of failing for an F&B retail and the rising cost of products meant that one cannot depend just on organic growth, it is not enough to bring in the dough anymore!

Having partners such as Keurig, expand on your reach by thousands of percent immediately!

My $0.02

Recently, Starbucks Howard Schultz talks about going more into retail and grocery style. This is a very different approach from current Starbucks modus operandi.

But, from the closure of starbucks outlets, lower expansion rates, if Starbucks do not divest into another segment or channel of business, its growth might ultimately be stagnated and probably decline.

I guess MacD entrance into the coffee market simply speed up the whole process, currently nobody can challenge them in turns of distribution.

Even, if 10% of their walk in traffic purchase coffee, the business lost for Starbucks is substantial.

Thus, to grow, this is the path that Starbucks has to take and taking this path meant bad business for other single serve coffee companies (ripple effect).