McDonald's to expand espresso service across U.S.

By Marcy Nicholson

SCOTTSDALE, Ariz., March 2 (Reuters) - McDonald's USA (MCD.N) says it will expand availability of its espresso-based specialty coffees across the United States in the near future, a company official said on Friday.

"I'm very optimistic that we'll have it national in the relatively near future," McDonald's USA Chief Marketing Officer Bill Lamar told Reuters on the sidelines of the National Coffee Association's 96th annual convention.

Lamar was not specific about the nationwide roll-out date.

The fast-food chain began successfully serving a new coffee blend in March 2006.

"Consumer taste preferences in coffee have changed in recent years, largely because of the influence of coffee houses like Starbucks (SBUX.O) and Caribou Coffee (CBOU.O)," Lamar said.

"Today's consumers are now more sophisticated and knowledgeable about coffee. They're looking for richer and more flavorful coffees," Lamar told the conference.

McDonald's is currently testing specialty coffees such as espresso and cappuccino in hundreds of U.S. outlets and now looks at large coffee outlets as competitors.

"Truly, anyone who's serving a contemporary cup of coffee is a competitor. We think where we're going with offering more espresso-based drinks will only enhance (the coffee experience), and make McDonald's a destination for coffee in the United States, with our customers," Lamar said.

Although he would not estimate any figures regarding its projected growth in coffee sales, Lamar said he sees growth opportunity in increasing coffee consumption.

"I truly believe that our growth won't come as much from a market share gain from taking from someone else, as much as it will (by) expanding the number of people who want to visit us more often for coffee," Lamar said.

"I think the competitors we have are those that customers look to as alternatives in the morning and in the afternoon for coffee, so yes in that context, yes, I think of Starbucks as a competitor," he said.

((Editing by Christian Wiessner; e-mail: marcy.nicholson@reuters.com; Reuters Messaging: marcy.nicholson.reuters.com@reuters.net; +1 646 223 6043)) Keywords: COFFEE CONFERENCE/MCDONALDS

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