This McCafe is McGood

by Manuela Falchero

More than just one of life's little pleasures, coffee in Italy is a rite. Tied almost indissolubly with a quick pop into a bar. That's why in Italy coffee shops on the Anglo-Saxon model with their paper cups and take-away service has not yet been offered in any systematic way. But, as Bob Dylan said, the times they are a-changin'.

And the news on Facebook of the arrival of Starbucks in Milan, Venice, Rome and Naples immediately sparked public interest, producing over 4,000 "I likes" and 1,600 shares. Autogrill, the company which owns the rights to this brand symbol of consumer globalization, denies it. But it is also true that some of its recent moves give the idea of a situation in flux.

At the start of January, this group run by the Benetton family extended to Europe the partnership with this company synonymous with coffee shops and distribution, a partnership active in the United States since 1991. Over this coming year, therefore, the brand will be introduced into French rail stations and the Marseille airport, as well as along the highways in Holland in the service areas of De Meern and Meerkerk.

As for Italy, at the moment there is no news, but waiting too long could prove counterproductive for Starbucks because their competition is not just standing around twiddling its thumbs. First and foremost McDonald's Italia which, among the cornerstones of its growth strategy for 2012, has inserted expansion of their McCafé Corners.

Over 2011 in Italy, this American multinational saw growth in sales (970 million euros, up 7.6% on 2010), customers (5.5 million new visits) and jobs created (approximately 1,500 in 2011, of which less than 10% temporary), and it is counting a lot on this project.

This is because of the public favor it has enjoyed since its start in 2005. Today, the company has 122 restaurants with a café area, but according to the plans of McDonald's Italia's managing director, Roberto Masi, this number is destined to grow.

What is it that impels you towards the McCafé formula in a country like Italy where espresso coffee is an established tradition?

The decision to focus on the coffee shop segment is part of a broader strategy in which McDonald's will be transformed from a fast food chain to a casual restaurant. A major change that has led us to work on the image of our restaurants through a renovation plan already carried out in 65% of our points-of-sale in Italy and scheduled to be completed over the next two years. The plan calls for creating more spacious restaurants with additional tables and comfortable chairs. The goal is to modify the consumer experience, to which now, in addition to "fast" meals that still remain part of our DNA, we are also offering a "slower" meal in settings furnished with natural materials and decorated using soft, relaxing colors. It is within this context that the McCafé option was created in which the enjoyment of top-quality Italian blends served in ceramic cups - an absolute must in a country like Italy - is paired with competitive prices and range of services including the option of reserving a table and the possibility of connecting to a WiFi network or reading the daily paper. This project has given us two advantages: take on the breakfast trade which until now has not been part of the services we offer, and win over an older clientele compared with our regular target. Although young people seem to prefer McCafés over traditional bars, it is the over-40s who are most pleased with this formula. And, finally, expanding what we offer to include a coffee shop allows us to become more "locally relevant" which is also an advantage to our core business, the restaurants.

In addition to the new layouts of the restaurants and the service, what are the other plusses the McCafé formula is based on?

We are convinced that, especially in Latin countries, we must take our cues from local habits. With the McCafés, we want to give the Anglo-Saxon coffee shop an Italian flavor by offering baked goods and snacks of Italian origin. Just as happens already in our restaurants, 80% of the products sold in the coffee corners are made by Italian companies. And my goal is to increase this percentage by 10-15 points overall. I would like to see 90% of our products coming from Italy. The "glocal" strategy which combines a global image with local features is extremely effective for winning over the Italian public. Not to mention that it is a policy also capable of generating positive spinoffs for local areas and national business.

How many openings do you have planned for 2012?

We intend opening 30 new and renovated restaurants, of which 21 will include a McCafé Corner, which after the initial tests concentrated primarily in Lombardy, Lazio and Emilia Romagna, will be spread throughout the country. More emphasis will be given the McDrives which will affect over 70% of the new openings given the excellent business results generated by this formula, responsible for 38% of Italian sales. There will be a re-balancing of the presence in malls and city centers, perhaps given too much importance in the past.

Naturally, this doesn't mean we will be stopping our presence in these areas. For example, Milan, where following the closing of the restaurant in Piazza Cordusio and that of the store facing onto the Galleria Vittorio Emanuele II, we are already looking for alternative locations.

An obstacle to these growth objectives could be the stereotyped view of McDonald's. Just a few days ago in the US many Twitter users responded to one of your promotional campaigns by making serious accusations. Is there something wrong with your advertising?

In fact, the campaign you are talking about was withdrawn in a matter of hours and, clearly, something went wrong. Some of the stereotypes about McDonald's still exist, but we shouldn't forget one simple thing: people who are negative about a brand are generally also more insistent about expressing their opinions than those who like it. It is also true that of the 300,000 messages McDonald's receives each week on the social network, only 2% are critical of the brand. If we look at Italy in particular, recent studies show that trust in McDonald's is growing. Of course, the road is still long. Facts show that the standards applied to our suppliers - which include some of the largest names in retail food distribution such as Cremonini and Amadori - are extremely strict and safeguard the consumer, but the brand image is still far from the actual situation.

We still have to work hard around communication. And we will certainly do this following tried-and-true advertising guidelines. In 2012 we will be focusing our attention above all on our price competitiveness. But I won't rule out special initiatives. For example, we are evaluating the possibility of organizing a promotional week in which to give everyone a free cup of coffee. This operation could be launched in April along the first of two McCafé campaigns this year.

McDonald's could also face an additional problem from the proposed law to tax so-called junk food. What do you think about this?

At the moment, there is no precise information about such a tax, so it is difficult for me to comment. In addition, on a European level, it has not been shown that this type of law would have any effect on consumer behavior. What is certain is that McDonald's invests a tremendous amount in the quality of its products and the variety of its menus which - by no accident - also include salads and fruit. Attention to proper nutrition is one of the fundamentals on which our expansion policy is based. A policy which for 2012 has as its goal the creation in Italy alone of 1,500 new jobs.

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NUMBERS

13.1 million euros: 2011 sales in Italy

122: ?number of McCafés out of 432 McDonald's restaurants

+8.8%?: growth in sales in 2011 (like-for-like basis)

12-13 m2: surface area of each McCafé Corner, plus 20-30 m2 lounge area

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