BUSINESS
03/28/2008 02:45 am ET | Updated May 25, 2011

Starbucks And McDonald's Coffee Showdown

Obama and Clinton. McCain and Romney. Call them the great contests of the week, if you must. But pound for (finely ground) pound, a more heated battle has been steadily percolating. It's morning in America, and that's steamed milk you hear. A latte war is brewing. The prize: venti-size profits in a U.S. specialty coffee market valued at $11 billion and growing.

On one side is Starbucks Corp., the Seattle-based coffee giant responsible for the democratization of the $3-$4 hot beverage. In hopes of reinvigorating a stock price that has floundered in recent years--this week it hovered around $20, about 40 percent less than the $36.60 it was trading at a year ago--Starbucks ousted its CEO, Jim Donald, this week, replacing him with Howard Schultz, the company's longtime chairman and the executive credited with making it the ubiquitous brand it is today. On the other side is McDonald's Corp., the Oakbrook, Ill.-based burger behemoth that feeds more people every day than any other restaurant brand in the world. The company announced a national rollout of the type of made-to-order coffee drinks that Starbucks brought to the fore.

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