McDonald's to Switch to Fresh Beef in Quarter Pounders -- 2nd Update
March 30 2017 - 4:23PM
Dow Jones News
By Julie Jargon
McDonald's Corp. is switching to fresh beef after using frozen
meat for more than four decades.
The change, which will involve just its Quarter Pounders for
now, marks 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, as well as from upstarts
like Smashburger Master LLC and Habit Restaurants Inc., which serve
bigger burgers made with fresh beef and gourmet toppings.
The move also comes after the company said earlier this month
that it wants to return to its burger roots following several
failed attempts to broaden its customer base with offerings like
salads and sandwich wraps. A large customer survey completed last
year revealed that McDonald's was losing customers mostly to other
fast-food chains -- not to fast-casual rivals serving healthier
fare. And McDonald's executives told investors that they would
focus on improving its core products, like the Quarter Pounder,
which has been on the menu since 1973.
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.
The switch to fresh beef Quarter Pounders alone isn't likely to
move the needle for McDonald's, experts say, and may add complexity
to a chain that has been trying to simplify its menu and
operations.
"Ultimately I don't think it's going to change the quality
dramatically and there could be higher costs involved because it's
fresh," said Darren Tristano, president of restaurant consulting
firm Technomic Inc.
McDonald's executives acknowledge that the company's success
isn't riding on the fresh-beef switch. "We're just getting
started," McDonald's USA President Chris Kempczinski said in an
interview Thursday. "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."
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, 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.
Previous efforts to make better burgers to compete with
fast-casual chains, however, led to higher price tags that didn't
go over well with McDonald's cost-conscious customers. As recently
as two years ago, McDonald's introduced a sirloin burger topped
with sautéed mushrooms and peppercorn sauce for $5, but it didn't
sell well.
While the "better burger" places charge a premium for their
gourmet offerings, Wendy's and Restaurant Brands International
Inc.'s Burger King have been luring in customers with low-price
offers such as four items for $4. McDonald's has experimented with
a number of different "value" offers that have failed to stick and
confused price-shopping customers.
While the fresh-beef Quarter Pounders were being tested in Texas
and Oklahoma, McDonald's didn't change the price, but said once the
burgers are rolled out nationally, franchisees will be able to
determine whether to charge more for them.
Mr. 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.
The chain's plans for being more competitive aren't all about
the beef. McDonald's 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.
More recently, the company began testing delivery, rolling out
mobile ordering and payment and offering table service in some
restaurants.
Write to Julie Jargon at julie.jargon@wsj.com
(END) Dow Jones Newswires
March 30, 2017 16:08 ET (20:08 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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