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Watch out, Starbucks, Dunkin. McDonald's is gearing up to sell ready-to-drink coffee

  • McDonald's is partnering with Coca-Cola to launch a line of bottled McCafe Frappe beverages in the U.S. in 2018.
  • This is the burger giant's first foray into the nearly $2 billion ready-to-drink coffee category, a move that Dunkin Donuts also made earlier this year.
McDonald's to introduce a line of ready-to-drink McCafe Frappe beverages
McDonald's
McDonald's to introduce a line of ready-to-drink McCafe Frappe beverages

Starbucks may dominate the ready-to-drink coffee scene, but there's another restaurant hoping to caffeinate consumers on the go — and it's not another coffee chain.

McDonald's said Wednesday that it is partnering with Coca-Cola to launch a line of bottled McCafe Frappe beverages in the U.S. in 2018. Financial terms of the agreement were not disclosed.

This is the burger giant's first foray into the nearly $2 billion ready-to-drink coffee category, a move that Dunkin Donuts also made earlier this year. The space has predominately been ruled by the North American Coffee Partnership — a venture between Starbucks and PepsiCo.

The Starbucks-Pepsi partnership, which was founded in 1994, has allowed the two companies to gain a majority share in the market by volume and by dollars, according to Beverage Digest.

McDonald's already has whole bean, ground and single-serve coffee products available in retail stores, but this will be the company's first bottled product. The McCafe Frappe lineup will include caramel, vanilla and mocha flavors.

"This is just the start of our McCafé commitment," Chris Kempczinski, president of McDonald's USA, said in a statement Wednesday. "We understand how important the coffee culture is for consumers and we are committed to meeting that demand at the taste, convenience and value only McDonald's can offer."

Since jumping into the coffee fray, McDonald's has benefited from pricing its beverages far lower than its direct coffee competitors like Starbucks and Dunkin. The chain has doubled down on its value offerings, serving up $1 soft drinks and $2 McCafe beverages that include coffee, frappes and lattes.

The Golden Arches has already made a dent in the industry, stealing away sales from its competitors, especially in the afternoon.

The company did not specify what its new bottled beverages will cost at retail.