The rise and fall of McDonald’s CosMc’s

McDonald's launched 80 beverage restaurants to fight Dutch Bros — then killed them all after learning the threat was just 2 drinks.

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By The Numbers

locations opened at peak

50%

sales from one drink

stores remaining after shutdown

What They Nailed Early

McDonald's saw a real competitive threat from drive-through beverage chains like Dutch Bros and Seven Brew capturing young customers. They responded intelligently by launching a separate brand rather than cluttering the core menu.

What Changed

After opening roughly 80 CosMc's locations, McDonald's discovered the entire beverage category wasn't a new business — it was just 2-3 SKUs driving all the revenue. About 50% of sales came from one caffeinated Frappuccino variant. The experiment proved they could capture 80% of the opportunity by simply adding those drinks to existing McDonald's.

Where it Landed

McDonald's shut down all CosMc's locations in under two years. The beverages will roll into the main chain. Smart experiment, clean exit — they got the data they needed.

The Principles

Test before you scale. McDonald's risked 80 stores, not 8,000 — learned what they needed, then pivoted without damaging the core.

New competitors don't always mean new categories. Sometimes a 'threat' is just a product gap you can fill with line extensions.

Know when to kill experiments fast. Two years of data beat ten years of indecision — move on when you have your answer.

Builder's Takeaway

If you're facing a competitive threat, remember:

•

Run small experiments in separate brands to avoid cluttering your core offering

•

Dig into unit economics — often 2-3 SKUs drive 80% of competitor revenue

•

Be willing to shut down fast once you learn what you need

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