Add McCafe to Vienna culture; Experiment: The McDonald's golden arches now encompass a coffeehouse without fast food in the city that invented the four-hour coffee break.

THE BALTIMORE SUN

VIENNA, Austria -- The company that perfected the two-minute burger and fries is turning its attention to the four-hour cup of coffee.

In Vienna, where dallying in coffeehouses is as central to the culture as waltzes or wieners, the last thing you might expect to see on your demitasse would be golden arches. But McDonald's is experimenting here with a concept called McCafe.

Austrians apparently love McDonald's for its burgers; their country has more than 120 of the company's restaurants. For coffee, cake and conversation, however, the Viennese have long preferred the more leisurely pace of the city's hundreds of traditional cafes, where patrons such as Freud, Trotsky and Hitler all learned to nurse a cup while reading, writing or talking.

"We saw McCafe as a chance to offer additional benefits for our customers," says Martin Knoll, managing director of McDonald's Austria, as he surveys a bustling lunchtime crowd at Vienna's McCafe. "It seemed to be a good way to expand on our traditional strengths of quality, price and cleanliness."

McDonald's in Austria has opened two McCafes, one on Vienna's bustling Mariahilferstrasse and another at a highway rest area near the Alpine city of Innsbruck. McDonald's in other European countries are also experimenting with the coffeehouse idea.

McCafe has not escaped the attention of owners of Vienna's traditional coffeehouses, whose livelihood is under threat from various enterprises that offer higher turnover and wider profit margins. In the past three decades, dozens of family run cafes have been pushed out of prime central locations by burger joints, automobile showrooms or banks. Last year, Pizza Hut took over the site of the century-old Cafe Haag.

"There used to be many coffeehouses like this in Vienna, but after the war they threw everything out and began building fast food. It's less work," laments Guenter Hawelka, owner of the Cafe Hawelka, a 60-year-old coffeehouse that over the years has served the likes of Grace Kelly, Omar Sharif and Richard Burton.

On the surface, the McCafe appears close to the genuine article: Waitresses in tailored black skirts and white tops stand at attention behind a glass case, offering coffee and "kuechen" -- Viennese pastries and cakes -- on ceramic plates and cups bearing a bright McCafe logo. Newspapers and magazines line a rack to their right, an espresso machine chugs quietly behind them, and a chalkboard overhead presents the day's menu.

But the differences are clear: The Cafe Hawelka, with its worn, red-and-white banquettes, rickety tables and rutted wooden floor feels as homey and comfortable as an old slipper, and appears to be approximately as clean and tidy, too. The guests' low chatter is interrupted by the occasional clink of cup on saucer or the swoosh of the espresso machine.

"People look for originality in their coffeehouses," the 58-year-old Hawelka says as his father putters in the cafe's kitchen behind him. "McDonald's is very successful with their fast food, but I think you have to have some heritage, some history, something that fascinates people, to be successful in the cafe business."

A few hundred yards away, near St. Stephen Cathedral, Hans Diglas looks over the elegant coffeehouse his grandfather opened in 1920. Waiters in black tuxedos and bow ties move swiftly from behind the counter, balancing a half-dozen or more cups of coffee, bottles of mineral water or plates of food on silver trays.

Diglas has run the coffeehouse since his father retired 19 years ago. As chairman of the coffeehouse division of the Vienna Chamber of Commerce, he has seen the demise of many historic cafes over the years. He says their number has dwindled to fewer than 300, from more than 1,000 after World War II.

He fears that the prime locations occupied by the remaining cafes will be sought out by McDonald's, Pizza Hut or other powerful international retailers. But Diglas says there will always be a place for well-run coffeehouses that offer customers a warm place to sit and while away the day. The fact that McDonald's is opening coffeehouses, he says, indicates that there is a future in the business.

"We don't fear McCafe," he says. "It's a different clientele. Very young people go to McDonald's, so you could say that it's a training ground for our future customers. Older people expect a certain ambience and a social component in their cafes, and what [McCafe] offers is not the whole palette of experiences you expect when you go to a Vienna cafe."

McCafe's customers acknowledge that it differs from Vienna's historic coffeehouses. Engineer Reinhard Ellinger, who has stopped in for a cappuccino and an apricot cake, says: "The ambience isn't the same as in a traditional cafe, but the coffee is good."

In fact, the cafe -- which occupies a corner of a regular McDonald's -- often seems to serve as a smoking section for teen-agers who want a Marlboro with their Big Mac and fries.

"You go to a cafe to have a good time with your friends," Rudolf Freyenschlag, 17, says as he stubs out a cigarette. "The Viennese coffeehouse is deeply rooted in our culture, and this isn't a typical Viennese coffeehouse."

McDonald's country manager Knoll says that's OK with him. Despite the concerns of Hawelka, Diglas and other traditional cafe owners, he doesn't aim to push them out of business. He is, however, prepared to challenge them on price: A melange -- a Viennese version of cappuccino -- costs 24 Austrian schillings ($2.04) at McCafe, compared with as much as 40 schillings ($3.40) in traditional coffeehouses.

"This is a different kind of cafe. Traditional cafes shouldn't see us as a threat but as an additional opportunity for our customers," Knoll says, sipping a cappuccino and munching on a slab of tiramisu layer cake. "They have to think what their competitive advantage is and then capitalize on that."

After examining the results of the first two McCafes, McDonald's will decide whether to build more, either within existing restaurants or as stand-alones, says Knoll.

The concept is also being watched by managers at McDonald's headquarters in Oak Brook, Ill., a spokesman there said, but there are no immediate plans to open McCafes in the United States, nor is there a coordinated effort to expand them worldwide.

Vienna's McCafe serves about 3,000 customers a week, Knoll says, perhaps half of whom come in just for the cafe and don't buy anything from the McDonald's restaurant. He says annual revenues are in line with expectations, at about $425,000.

That is still a pittance when compared with McDonald's overall Austrian revenues, which Knoll says will top $289 million this year. As the concept catches on, the share provided by McCafes could quickly grow, he predicts.

"Coffee is a very traditional thing for the Viennese," says Knoll. "Austrians are coffee connoisseurs, so if we're able to offer the right products at the right price, the market will be there."

Pub Date: 2/16/99

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