McDonald’s specialty coffee plan in hands of former defense engineer
Chicago ? Don Thompson is a man of science, an electrical engineer who once designed radar jamming systems, but recently, his biggest problem was a simple piece of cheese.
McDonald’s most popular U.S. sandwich, its $1 double cheeseburger, was barely profitable for its franchisees. And as head of McDonald’s U.S. operations, it was Thompson’s job to find a solution that wouldn’t alienate cash-strapped consumers.
The answer: Raise the double cheeseburger’s price to $1.19, but also launch a new double cheeseburger, with less cheese, for $1.
The great cheeseburger compromise appears to have worked, and it’s exactly the type of innovation that has kept Oak Brook, Ill.-based McDonald’s Corp. on a roll, despite an ugly economy, analysts said.
Now, the 46-year-old Thompson has an even bigger challenge: Successfully completing the rollout of one of the fast-food giant’s biggest — and riskiest — U.S. product launches, the McCafe specialty coffee offensive.
“This is a big deal and all eyes are on McDonald’s,” said Steve West, an analyst at Stifel Nicolaus. “If it fails, it will be an embarrassment and will fall right at (Thompson’s) feet. It’s not his idea, but it is his to execute. He could live or die by that sword.”
Thompson notes that the coffee blitz is only a part, albeit a big one, of McDonald’s strategy. But one thing is certain: When Thompson graduated from college in 1984, he couldn’t envision he would one day be figuring ways to peddle caramel cappuccino.
At Northrop Corp., Thompson designed radar jamming systems for fighter planes. One day in 1990, he got an unsolicited call from a recruiter for a job involving robotics. Thompson was intrigued — until he realized the pitch came from McDonald’s, not defense contractor McDonnell Douglas.
In August 2006, Thompson was named president of McDonald’s USA, which makes up 34 percent of revenues, a little less than Europe, but still is the greatest source of operating earnings, at 48 percent.
Specialty coffee is now available in almost 70 percent of McDonald’s U.S. outlets.

