McDonald's is closing its CosMc's restaurants but plans to test drinks the chain 'inspired'

Key Points

• McDonald’s plans to close all CosMc’s pilot restaurants and shut down the CosMc’s app by the end of June.
• Beverages inspired by CosMc’s—such as a matcha iced latte, turmeric spiced latte, prickly pear slushy with popping candy and a frozen sour cherry energy drink—will soon be tested at U.S. McDonald’s locations.
• CosMc’s was launched to capture the growing $100 billion afternoon-beverage market and help McDonald’s counter its typical afternoon sales slump.
• Despite innovations like drive-thru lanes that optimize traffic based on order complexity and rapid menu edits, the complexity of CosMc’s drink menu proved difficult to integrate into standard operations.

McDonald’s said Friday that it’s closing down CosMc’s, a new restaurant format it began piloting in the U.S. last year.

But the company said beverages inspired by CosMc’s will soon be tested at U.S. McDonald’s locations. Among the drinks on CosMc’s current menu: a matcha iced latte, a turmeric spiced latte, a prickly pear-flavored slushy with popping candy on top and a frozen sour cherry energy drink.

McDonald’s announced in late 2023 that it wanted to test a small-format store with customizable drinks and treats that would appeal to afternoon snackers – and potentially grab sales from rivals like Starbucks and Dutch Bros. McDonald's sales often slump in the afternoon between mealtimes and the company wants to change that.

“This is a $100 billion category that’s growing faster than the rest of (casual dining) and with superior margins. And it’s a space that we believe we have the right to win,” McDonald’s Chairman and CEO Chris Kempczinski said at the time.

But Kempczinski said CosMc’s drinks might be too complex to fit in with regular McDonald’s store operations.

McDonald’s wound up opening one CosMc’s location near its headquarters in Chicago and seven in Texas. Five locations remain, but the company plans to shut them all down by the end of June. The company is also shutting down CosMc’s app.

McDonald’s said CosMc’s allowed it to experiment with bold flavors and different technologies, like drive-thru lanes that manage traffic based on the complexity of orders. It was also able to quickly edit the menu based on customer feedback.