OAK BROOK, Ill. — In what could be a game changer for the energy-drink category, McDonald’s is testing sales of Monster Energy Drinks in about 20 of its quick-service restaurants.
First reported Tuesday by a stock analyst, Monster Beverage’s stock price jumped 7.4% after the news, which could mean a new outlet for energy-drink sales.
A McDonald’s spokesperson said it’s too early in the test to report results, but added, “We’re always gathering feedback from customers on the food and beverages they’d like to be served at McDonald’s, and this is another example.”
McDonald’s has tested packaged-beverage sales before but has yet to permanently add a cooler to its restaurants. Energy drinks, however, are a new subcategory of beverages for the chain. Stocking them in cans is not redundant as bottles of Coca-Cola are to the fountain offer consumers are used to.
At this point, the test includes only Monster Energy Drinks, which are partially owned and distributed by Coca-Cola Co., presenting a new opportunity for Monster to grow its volume lead on chief competitor Red Bull.
“These few (McDonald’s restaurant) owner/operators have chosen Monster beverages. I’m not aware of any test of any other brands,” the McDonald’s spokesperson told CSP Daily News. “However keep in mind, as is the case here, the owner/operators are independent business owners and are free to offer and test what they feel their customers may want.”
Evercore ISI analyst Robert Ottenstein, who first reported the McDonald’s test, believes the U.S. remains a significant growth market for Monster. He estimates that QSR penetration could represent $1 billion to $1.5 billion of incremental revenue in the U.S. alone for Monster.
At McDonald’s, Monster’s beverages are typically sold as part of a value meal, according to Ottenstein, with customers paying about $1.50 more to get the Monster drink. The move is “generating incremental revenue and traffic for stores, with some customers coming in just to purchase Monster,” he told Bloomberg.