MCD McDonalds Corp

By Julie Jargon 

McDonald's Corp. will switch to fresh beef from frozen in its Quarter Pounder burgers at the majority of its restaurants nationwide by mid-2018 in one of the biggest moves the company has made to turn around its struggling U.S. business.

The chain is facing stiffer competition from traditional fast food rivals such as Wendy's Co., which has been touting its use of fresh beef patties in ads for many months. McDonald's has been using frozen beef since the 1970s.

The burger giant is also trying to regain customers who have been flocking to fast casual restaurants like Smashburger Master LLC and Habit Restaurants Inc., which serve bigger burgers made with fresh beef and gourmet toppings.

McDonald's recently said it would try to retain its core customers by improving the quality and affordability of its food.

McDonald's, which has ranked at or near the bottom of numerous surveys about burger quality, last year convened a panel of "sensory" experts including chefs and suppliers to study every hamburger on the market and rate them against McDonald's core burgers on such attributes as tenderness and juiciness. The company has been experimenting with different grinds of beef, buns, toppings, cook times and temperatures with the goal of delivering a burger that comes out hotter and tastes fresher.

The company has always used 100% beef with no fillers, additives or preservatives, but the patties were flash-frozen. Now the formed patties will be shipped fresh to restaurants, where workers will add salt and pepper to the burgers before searing them on the grill.

McDonald's began testing Quarter Pounders made with fresh beef in Dallas last year and later expanded it to a larger area of North Texas and to Tulsa, Okla., after a Dallas franchisee pushed the company to try it.

The burgers are cooked as soon as they are ordered so they come out hot and fresh. McDonald's typically makes its burgers in advance and holds them in warming cabinets so they are ready when customers order them.

During the test, McDonald's didn't change the price of the Quarter Pounders. Franchisees can choose whether to raise the price of the burgers once the fresh beef patties are rolled out nationwide.

The vast majority of McDonald's U.S. restaurants will serve Quarter Pounders with fresh beef, but McDonald's in Hawaii and Alaska won't because of the difficulty of shipping fresh beef that far. Some locations in airports won't have fresh beef either due to space constraints in the kitchen, which have to be outfitted with extra refrigerators.

McDonald's USA President Chris Kempczinski said the company has put in place rigorous food safety protocols to ensure the beef is properly stored and handled from the processing plant to the restaurants. A third-party auditor will perform food-safety audits at the restaurants.

Mr. Kempczinski said the company hasn't determined whether to extend fresh beef to the chain's Big Macs and other burgers. "We will continue to make moves on the burger line. Whether it's this move exactly I'm not sure but you should expect we'll continue to elevate and meet customer expectations about what we can do with our burgers," he said.

The chain has been taking other steps to win back customers since Steve Easterbrook became CEO two years ago. The company began serving breakfast all day in response to customer demand, removed artificial preservatives from several menu items including chicken nuggets and switched to chicken not treated with antibiotics important to human medicine.

The company is also testing delivery, rolling out mobile ordering and payment and offering table service in some restaurants as part of its efforts to modernize customers' experience.

Write to Julie Jargon at julie.jargon@wsj.com

(END) Dow Jones Newswires

March 30, 2017 11:12 ET (15:12 GMT)

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