McDonald's announced Friday it's pulling the plug on its CosMc's spinoff chain, just two years after the alien-themed concept first launched with significant fanfare.
The fast-food giant said all five locations—four in Texas and one in Illinois—will close by the end of June, marking a rapid end to what was once viewed as a promising expansion into the specialty beverage market that has become increasingly popular with younger consumers.
"CosMc's was created because we believed McDonald's had the right to win in the fast-growing beverage space," the company stated in its announcement. "It allowed us to test new, bold flavors and different technologies and processes—without impacting the existing McDonald's experience for customers and crew."
The closure represents a significant strategic pivot for McDonald's, which had initially positioned CosMc's as its answer to fast-growing specialty coffee and beverage chains like Dutch Bros., Scooter's and Swig that have captured market share among Gen Z consumers seeking customizable drinks.
Named after a little-known alien character from McDonald's advertisements in the late 1980s, CosMc's outlets featured elaborate drink concoctions including Island Pick-Me-Up Punch, Churro Cold Brew Frappe, and Sour Energy Burst, along with customizable options featuring popping boba, vitamin C shots, and various flavored syrups.
Industry analysts point to several factors behind the chain's demise. An executive familiar with the decision told CNN that McDonald's discovered fewer customers were customizing their drinks than anticipated, undermining a key premise of the concept. Additionally, the chain's standalone app and loyalty program failed to gain significant traction.
The announcement comes as McDonald's faces broader challenges, having recently reported two consecutive quarters of sales declines amid economic uncertainty and consumer pullback. CEO Chris Kempczinski hinted on a recent earnings call that the company is refocusing on its core business.
"Times have changed since CosMc's opened, and we need to prioritize what's working," Kempczinski said.
Not everything from the CosMc's experiment will disappear, however. The company announced it plans to test several of the chain's most successful beverage innovations at select McDonald's locations later this year, with franchisees already expressing interest in incorporating some of the specialized drinks into their standard menus.
The CosMc's standalone app and loyalty program will be discontinued when the locations close at the end of June, with McDonald's advising customers to redeem any earned points before that date.
