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.

Just 18 months after opening up their CosMc's spin-off brand, McDonald's is closing all five locations. The stores, located in Texas and Illinois, were a 'beverage-focused concept' pushing specialty drinks. "The main goal of the CosMc’s test was to create a launchpad for learning for the McDonald’s System — and the insights we’ve gathered have given us a whole new way to get closer to our fans," the company said Friday. Despite the closures, McDonald's emphasized that the pilot program has set the stage for an ambitious new venture into the competitive specialty drink market, this time integrating offerings within its primary restaurants.

The fast-food giant insisted the pilot program paved the way for a major new push into the competitive specialty drink market — this time from inside its core restaurants. “The main goal of the CosMc’s test was to create a launchpad for learning for the McDonald’s System — and the insights we’ve gathered have given us a whole new way to get closer to our fans,” the company said Friday. Launched in late 2023, CosMc’s was designed to explore the booming drive-thru beverage category dominated by chains like Dutch Bros, Scooters and Swig. CEO Chris Kempczinski revealed the company was planning a change in strategy during an earnings call earlier this month. “We have discovered some interesting learnings through our CosMc’s test, which has better informed our understanding of consumers’ customization preferences and interest in new, emerging beverage categories,” Kempczinski told analysts. Rather than build out a second brand, McDonald’s will add the CosMc’s beverages to menus at its existing US restaurants. The new flavors will be part of an in-store test launching later this year. McDonald’s emphasized that CosMc’s served as a “learning lab” to test new technologies, bold flavors, and fast menu iteration in real-world, customer-facing environments. The company said it made quick adjustments based on feedback and will apply those insights moving forward.