McDonald’s will open first CosMc’s spinoff in suburban Bolingbrook this week

The week after photos of its new spinoff CosMc’s in suburban Bolingbrook surfaced on social media, McDonald’s officially announced the concept at an investor day in Chicago Wednesday.

CosMc’s, named after a McDonald’s character from the 1980s whom CEO Chris Kempczinski described as “part alien, part surfer, part robot,” will be a 10-store, small-format pilot concept focused around specialty beverages and coffees. A CosMc’s in Bolingbrook will mark a soft opening Friday, the company said. The remaining stores will open in Texas by the end of 2024.

Kempczinski said Wednesday the fast-food giant had identified specialty beverages and coffees as a fast-growing area in which the company was underindexed.

“We can’t capitalize (on) this in our existing restaurants because of the complexity that customized beverages would bring to our kitchens,” Kempczinski said.

Offerings at CosMc’s will include specialty coffees such as a S’Mores Cold Brew and a Turmeric Spiced Latte, the company said. Other drinks include new specialty teas and lemonades that consumers will be able to customize with additions like boba or vitamin C shots. New food offerings include a spicy queso sandwich, pretzel bites and desserts such as caramel fudge brownies and sundaes.

Kempczinski emphasized the new concept was a pilot and said the company would be looking at results from the test stores for at least a year.

“Let me emphasize again, we’re talking about 10 stores,” he told investors Wednesday. “So let’s not get too excited about it.”

Prior to the official announcement Wednesday, photos of the CosMc’s menu had surfaced on social media. X user Iman Jalali posted photos of a beverage-heavy CosMc’s menu on the social media site, which was formerly known as Twitter.

Kempczinksi first teased CosMc’s during a second-quarter earnings call this summer. He revealed scant details about the spinoff at the time, describing it as a “small-format concept with all the DNA of McDonald’s but its own unique personality.”

Growth in the fast-food giant’s digital and delivery business has paved the way for it to take advantage of smaller-format stores as real estate opportunities, Kempczinski said this summer.

“You’re now able to look at real estate sites that previously would have been sort of off-limits to us,” he said. “Those become opportunities.”

Prior to its investor update Wednesday, McDonald’s announced it planned to open about 10,000 new stores by the end of 2027 for a total of 50,000 stores worldwide, which the company said would mark its fastest period of growth ever. The majority of the new stores will be abroad, Chief Financial Officer Ian Borden said Wednesday.

The company also announced a partnership with Google Cloud, saying it planned to use Cloud technology and AI to make improvements in areas like its mobile app and self-serve kiosks.

Claire Conaghan, associate director of publications at Chicago-based food industry market research firm Datassential, said McDonald’s wasn’t launching CosMc’s because they aren’t succeeding in other parts of their business.

“I think it’s simply another opportunity for them,” said Conaghan, speaking before Wednesday’s official announcement.

The fast-food giant posted net income of $2.3 billion in the third quarter, with same-store sales in the U.S. up 8.1%.

Still, McDonald’s saw a “slight dip” in traffic during the quarter, Kempczinski said during an October earnings call. The company had specifically seen consumers making less than $45,000 a year pull back, he said.

The smaller scale of the CosMc’s concept allows McDonald’s to be more “playful” with its CosMc’s menu than it can be with its main menu, Conaghan said. “It’s hard to introduce something like a Popping Pear Slush,” she said, referring to one of the CosMc’s menu items.

“It’s hard to guarantee you’ll have enough popping pears for the entire McDonald’s universe, while it’s a little easier to do it for one or two stores,” she said.