Wednesday, July 16, 2008

The launch of McDonald's 100 yen McBakery range in Japan

McDonald's - McBakery launch in Japan

Wednesday 16th July 2008

By Peter Hanami

McDonalds Japan launched the new McBakery line today (Wednesday the 16th July, 2008) in Tokyo, Japan. As hinted in our blog post yesterday . The launch comes at an important time in the market as the coffee wars have begun in Japan. McDonalds recently launched its new "Premium Roast" coffee brand which was an upgrade on their previous coffee line. It was a sign they were about to muscle in on Starbucks customers. A Starbucks Japan regular coffee currently costs 280 yen while a McDonald's premium roast costs just 100 yen and has free refills.

Video: Launch of McDonalds new McBakery in Tokyo, Japan

The new McBakery range adds to the 100 yen menu item expands McDonald's menu line and puts a brave foot forward into Starbucks territory as the economy is tightening. The timing couldn't be more perfect.

The new McBakery line consists of three items, melon pan, choco danish and sugar croissant. Each item costs only 100 yen and is a natural complement to the "Premium Roast" coffee brand. It seems that the items are on sale all day with no time restrictions, meaning they can be enjoyed 24 hours at some stores.

McDonalds Japan share price closed at 1567 yen per share down 18 yen. Starbucks Japan shares have been on a downward slide since early February (having shed 9600 yen per share in six months), today they closed at 46,700 yen down 200 yen.

The new line should attract new customers to the store. The big question is why launch a winter product at the start of summer? Why didn't they launch the premium roast coffee and the McBakery at the same time in the cooler months? Or maybe Japanese customers don't care about the season for food and just that it is a new menu item and a reason to visit the store? As metabolic syndrome continues to rage as a news item, will the calorie count have much of an impact? Sugar Croissant 198 kcal, Melon pan 289 kcal and Choco Danish 232kcal. Sugar Croissant may become the best seller as it has fewer calories than the others but I must say they all taste very good with a "Premium Roast" coffee.

A small 200 yen investment (McBakery item and a coffee) and you could pretend you were in Paris which is a nice break if you commute in Tokyo. The taste and quality are very good.

McDonalds and other fast food stores get plenty of traffic in summer in Japan as they offer a respite from the high humidity of summer as they have continuous air conditioning. Once in store customers stay as long as they can, so maybe the cooler environment maybe just right for a coffee and a pastry strategy. Starbucks Japan has a new summer line up focusing on blended juice mango and Zakuro peach frappuccino. The range is colourful, well known (Frappuccino is well known among Japanese customers) and is a refreshing drink for the summer heat.

So who will win the summer coffee wars. McDonalds with an extended 100 yen fresh bakery line to complement their new "Premium Roast" coffee strategy or Starbucks with a new range of flavours for their well-known Frappuccino line?

The winner will be ultimately be decided by customers at the cash register. We will keep you updated.

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