Will CosMc’s New App and Customizable Beverages Make McDonald’s Spinoff a Hit?

McDonald’s has ventured into new territory with the launch of CosMc’s, a spinoff brand aimed at capturing the beverage and snack market favored by younger consumers. Since its introduction, CosMc’s has opened four locations, with more on the horizon. The initiative is a strategic move by McDonald’s to diversify its portfolio and compete with popular chains like Starbucks and Dutch Bros.

CosMc’s draws inspiration from a lesser-known McDonaldland mascot, CosMc, an alien character with a fondness for cheeseburgers. The brand’s focus is on customizable drinks and coffee, catering to the growing trend of beverage consumption as a form of affordable indulgence. This strategy aligns with insights from Katie Belflower, an editor at restaurant research firm Technomic, who told CNBC, “With beverages, you can get really creative, without necessarily having the product lines that you would have to invest in with food.”

The first CosMc’s location opened in Bolingbrook, Illinois, in December 2023, with three additional locations in Texas. By the end of 2024, McDonald’s plans to have 10 CosMc’s locations, nine of which will be in Texas, using this phase to test the concept’s viability.

CosMc’s menu offers a high level of customization, with options for adding vitamin boosts, energy shots, or various syrups. This degree of personalization, however, would be challenging to implement at a traditional McDonald’s due to the potential for slowed service. Digital menu boards and a new mobile ordering system are expected to mitigate these issues and improve overall efficiency.

Despite the initial hype, the novelty of CosMc’s seems to have waned. After the initial rush, drive-thru lines have shortened and service times have become more manageable. According to Intouch Insight, mystery shoppers reported an average wait time of over 11 minutes from entering the drive-thru to placing an order, with a service time of just over four minutes, slightly lagging behind industry standards.

The Bolingbrook location features a drive-thru-only model with four lanes and a simplistic exterior. Notably, the branding does not heavily feature the CosMc mascot, perhaps due to its relative obscurity among the younger target demographic. Instead, the focus is on the extensive menu, which includes unique offerings like Sour Cherry Energy Burst and Popping Pear Slush, alongside coffee drinks such as the Churro Cold Brew Frappe.

Furthermore, McDonald’s recently introduced a nationwide mobile app and loyalty program for CosMc’s. The app, available on Apple’s App Store and Google Play, offers a range of features, including a loyalty program, order-ahead options, and personalized drink preferences.

Despite its limited physical presence, the new app aims to enhance the customer experience by offering perks such as a free drink upon signing up, birthday treats, and the ability to earn points with every purchase. Customers earn 10 points per dollar spent, with 400 points translating to a $2 reward.

However, the rollout of a nationwide app for a brand with such a limited footprint raises questions about timing. The Bolingbrook location, intended as a testing ground, has struggled with long wait times, which the app’s order-ahead feature could potentially mitigate. Yet, with only four locations, the app’s utility is currently restricted to a small user base.

McDonald’s acknowledged this limited reach but made the following statement via email: “CosMc’s is excited to offer the app to our existing customers to provide a convenient customer experience and also allow them the option to join our loyalty program.”

The broad launch of the app might seem premature, but it aligns with CosMc’s strategy to refine its offerings and enhance customer engagement in preparation for future expansion.

The experimental nature of CosMc’s functions somewhat like a safety net that allows McDonald’s to explore new market segments with minimal financial risk. Even if the spinoff does not expand beyond the initial test phase, the insights gained could prove invaluable. McDonald’s past experience with secondary brands, such as the acquisition and eventual sale of Boston Market, highlights the importance of strategic focus.