McDonald's will sell Red Bull Dragonberry Energizer starting Aug. 17 as part of a broader beverage expansion. The move follows a weaker Q2. Alpha Score 50 reflects mixed signals.
McDonald's will start selling Red Bull at its U.S. restaurants on Aug. 17, the company said Tuesday. The Red Bull Dragonberry Energizer – a blend of Red Bull, blue raspberry syrup and freeze-dried dragonfruit – marks the chain's first energy drink offering. Customers can also buy an 8.4-ounce can of Red Bull separately or request Red Bull Zero.
The beverage expansion comes as McDonald's works to reverse slower U.S. traffic. Comparable sales in the company's largest market rose 0.8% in the second quarter, below the 1.06% analysts expected, according to LSEG. A year earlier, U.S. same-store sales grew 2.5%.
CEO Chris Kempczinski blamed execution problems, not strategy.
"We don't have a strategy problem. We simply didn't execute at the level we needed to in the second quarter."
CFO Ian Borden said the company plans to use more national digital offers and personalized promotions to “reenergize our high-frequency customers.”
The Red Bull rollout builds on a broader push into specialty drinks. McDonald's recently added crafted sodas and Refreshers, and is now introducing a Vanilla Swirl made with cold foam and Coca-Cola, Diet Coke or Coke Zero Sugar. Other options include an Orange Dream with Fanta and reduced-sugar versions using Diet Dr Pepper, Sprite Zero Sugar and Dr Pepper Zero Sugar.
Alyssa Buetikofer, chief marketing and customer experience officer for McDonald's USA, said the chain tested the Red Bull Dragonberry Energizer in select markets and saw strong demand.
Sector read-through
McDonald's push into energy drinks and expanded beverages could benefit Coca-Cola, which supplies the chain with its core sodas and is included in the new crafted soda lineup. Coca-Cola's volume is tied to McDonald's drink sales, and the company has its own energy drink – Coca-Cola Energy – but the Red Bull partnership suggests McDonald's is willing to work with competitors to drive traffic.
AlphaScala's proprietary model gives McDonald's (MCD) a score of 50 out of 100, labeled Mixed, reflecting the mixed signals from the quarter. Coca-Cola (KO) scores 61 out of 100, labeled Moderate, indicating a more stable outlook.
The Red Bull rollout will be available at participating McDonald's restaurants nationwide starting Aug. 17.
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