McDonald's President: We Will 'Go Big' On Fresh Beef Marketing

After years of preparation, McDonald's is ready to serve fresh, cooked-to-order beef in many of its burgers, backed by what promises to be a lot of marketing. It's the latest signal the world's largest restaurant chain is responding to what customers want. The Golden Arches is gearing up for the national debut of fresh (as opposed to frozen) quarter-pound beef patties, which comes one year after McDonald's announced its "hot off the grill" plans and four years since the world's largest restaurant began working on it. Fresh quarter-pound patties are now in about 3,500 U.S. restaurants and most of the rest of the Golden Arches' 14,000 U.S. locations should have them by early May. That's when major marketing will debut. The patties taste noticeably fresher and juicier than regular McDonald's patties yet have the size and consistency customers have come to expect from the chain. (Ad Age tasted the patties Monday at a McDonald's press event.) McDonald's has been on what McDonald's calls a food "journey," with tweaks over the past few years including committing to using only cage-free eggs, removing artificial preservatives from Chicken McNuggets, and making breakfast items like the Egg McMuffin available all day. Now, it's time to put the spotlight back on what it's best known for. "At the end of the day, McDonald's is a burger company," Chris Kempczinski, president, McDonald's USA, told reporters gathered at a restaurant in Oak Brook, Illinois on Monday. Smaller competitors from Wendy's to Shake Shack pride themselves on using fresh, not frozen, beef. The switch could help McDonald's win over diners who have headed elsewhere for what they perceive to be better burgers and might help the massive chain win more visits from existing customers hungry to try something different. In Dallas and Tulsa test markets, the cooked-to-order fresh patties got 90 percent customer satisfaction from those who ordered the burgers and a 90 percent intent to repurchase, executives said. "We are on a burger journey," says Linda VanGosen, VP of menu innovation, who joined McDonald's in 2017 from Starbucks, and says the fresh beef patty "brightens" the taste of the burgers. While the fresh beef rollout is big news for McDonald's, it is somewhat limited. The fresh beef patties are being served on the Quarter Pounder, Quarter Pounder with Cheese, Double Quarter Pounder and the newer Signature Crafted Recipe burgers with upscale toppings. Fans of Big Macs and regular hamburgers and cheeseburgers will still get the frozen stuff for now. But don't rule out a larger switch. As Kempczinski pointed out, McDonald's 2015 introduction of All Day Breakfast began with a limited number of items and later expanded based on its success. "We'll follow what the customer tells us in terms of the response," he said in an interview. McDonald's doesn't break out what percentage of burger sales come from quarter pound-patty sandwiches. "I think it's an incremental positive" as it shows McDonald's is responding to consumers seeking out "cleaner, fresher ingredients," says Morningstar analyst R.J. Hottovy. Limiting fresh beef to the quarter pounder patties makes sense because it is "deliberate and measured," rather than disrupting the company's entire supply chain, says Hottovy, who thinks the patties taste "noticeably" better and should help boost McDonald's perception. "You're making some tweaks to the taste for the better and hopefully something that will continue to leave a favorable impression on the brand," he said. McDonald's is also introducing a new Signature Crafted flavor, Garlic White Cheddar, with garlic aioli, crispy garlic chips, a slice of tomato, iceberg lettuce and cheddar cheese. "We will have recipes that do these patties justice," says VanGosen. Like other Signature products, it can be served on a burger (yes, the fresh one) or as a chicken sandwich. Garlic White Cheddar will replace one of three existing Signature Crafted recipes on the menu, with restaurants choosing which to remove. At the same time, McDonald's is busy marketing its $1 $2 $3 Dollar Menu to appeal to value-conscious diners. "One of the things that works on our menu is when you can talk about both premium and value, because they're two different customers who are interested in those products and so I think, for us, there's always going to be an element of talking to different customers with different needs," Kempczinski said in an interview. At first, at least, the introduction may hurt competitors like Wendy's or Burger King as patrons head to McDonald's to try out the new patties, especially with what's expected to be a heavy dose of marketing. "We will go big against the rollout of this," Kempczinksi said of ad plans for May, without discussing the details of the marketing for fresh beef. Rival Wendy's has tried to get ahead of the launch with its own ads focused on fresh beef, including during last month's Super Bowl. We Are Unlimited will handle advertising and Golin Harris will field PR. Not a simple switch Since McDonald's is a behemoth with 14,000 U.S. locations that are mostly franchised, switching to fresh is not so simple. After finding a recipe, McDonald's had to convince franchisees it's worth the effort, and get workers ready to make the burgers. It has taken four years to go from the idea of serving fresh beef patties to making it a reality across most of the company's U.S. restaurants. The burgers won't be available in Alaska, Hawaii or U.S. territories. Joe Jasper, a McDonald's franchisee whose Fort Worth restaurants were among the first to serve fresh beef, said he first tasted them in February 2015. While the taste met his and others' desires, they needed to ensure that making the burgers wouldn't slow down operations, especially the drive-thru lanes where McDonald's takes a majority of its orders. Kempczinski recalls tasting it for the first time in the fall of 2015 and loving it. "What we obviously had to get comfortable with is that we could deliver it consistently and that we could do it in a way that didn't impact service times," he said. So McDonald's aimed to reassure franchisees it had the process worked out well enough that the impact in the kitchen and, most importantly, to customers' wait times, was minimal. The burgers actually cook 20 to 40 seconds faster than frozen patties, depending on the grill used. They're pulled from a two-drawer refrigeration unit made especially for McDonald's that features a different compressor to ensure the proper holding temperature of the fresh beef, says Christa Small, senior director, new development and business integration. Workers pull on blue gloves before taking each patty from a special blue holding container in the fridge unit, before placing them on the grill. "We teach our crew people blue means beef," Small said as workers prepared the burgers in Oak Brook. Pricing is not expected to change meaningfully but is at the discretion of the franchisees. "The cost difference is not significant enough that it really would require a price increase," Kempczinski said.

McDonald's President: We Will 'Go Big' On Fresh Beef Marketing

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