When fast-food giant McDonald's (MCD) needed to improve its breakfast menu, it knew that the first place to start was with its coffee lineup. By improving its coffee selections, McDonald's was able to significantly boost the importance of its breakfast menu, and other fast food chains have tried to follow suit.
Wendy's (WEN) recently tried to duplicate the success McDonald's has had, but it made on crucial mistake… going with its own proprietary brand of coffee. This resulted in a lack of profitability and an inability to roll out the new coffee menu on a national scale.
Now Burger King (BKW) is attempting to make its own move by teaming up with Starbucks (SBUX) to improve its coffee menu. Working with Seattle's Best Coffee, which Starbucks owns, Burger King is planning to add lattes and flavored coffees to its menu.
The decision comes as Burger King tries to overtake Wendy's as the nation's second-largest burger chain, a title it had held before Wendy's overtook it last year.
The partnership is also a smart move for Starbucks, which already has a dominant position in the upscale coffee market with its own stores. Seattle's Best Coffee can already be found in other fast-food chains such as Taco Bell and Subway, giving Starbucks a large share of the more downscale coffee market as well.
Burger King has a lot of work to do if it wants to reclaim the number two spot. Beefing up its coffee menu is just one many changes it will need to make. Whether its new coffee lineup is able to duplicate the same results that McDonald's achieved remains to be seen, but it’s a smart place to start.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.