Why McDonald's Hasn't Cut the Fat

Fast-Food Leader Fears Negative Reactions Among Fry Fans

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CHICAGO (AdAge.com) -- When McDonald's corp. announced it would move to a trans-fat-free oil, the impact was immediate as consumers flooded the fast feeder with complaints that its fries didn't taste as good. But in actuality the taste was the same -- the company hadn't yet switched oils -- and some four years later it still hasn't.
Pressure is mounting on McDonald's as rivals such as Wendy's and KFC cut trans fats from their menus.
Pressure is mounting on McDonald's as rivals such as Wendy's and KFC cut trans fats from their menus.

2002 promise
Now the share leader is still struggling to make good on its 2002 vow as the pressure mounts from rivals such as Wendy's and KFC, which have cut trans fats from their menus and Burger King, which will start testing new oil within 90 days. McDonald's, meanwhile, has yet to put an end date on its super-secret tests.

It's understandable that McDonald's would be ambivalent about changing its signature fried potatoes, which helped shape the Golden Arches. Fries rank second only to beverages as the chain's margin-leading item and are the undisputed leader in quality and taste among McDonald's peers, said executives close to the marketer.

Fries key to brand
"In a category where there are low quality ratings of food, the fries are always rated high, and they are inexorably linked to the brand, perhaps more than any other product," said one executive, comparing McDonald's trans-fat conundrum to New Coke. "That would be the one thing you wouldn't want to mess with if you didn't have to."
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Yet McDonald's has to, unless it wants to go toe-to-toe with municipalities mandating that it has to go trans fat free.

And that raises the specter of a public-relations nightmare -- no matter what McDonald's does. If it changes its oil, the company will likely encounter the same kind of consumer push back it felt in 2002. If it keeps trans-fat oil, the chain could get lambasted by health advocates. "Which is the lesser of the two evils?" asked an executive in McDonald's circle. "What is the inflection point?"

Testing other oils
"We've tested more than a dozen different oils and we're very encouraged by what we have seen in test," said a McDonald's spokesman.

Market researchers support that McDonald's has a legitimate reason to be gun-shy about changing its formula. Since the 2002 fry flap, new research on the placebo effect reinforces that there's more to taste than flavor and more to smell than aroma.

Even McDonald's critics see the dilemma. While Stephen Joseph -- the president-CEO of BanTransFats.com -- disagrees that zero-trans-fat oils significantly change taste or texture, he admits that the placebo effect creates a major PR issue. By talking about the change, instead of people shoveling in the fries like usual, they "start tasting them slow like tasting fine wine," he said. "If they never said anything [consumers] wouldn't have noticed."

Flavors and emotion
How a company handles communications around the trans-fat issue can affect the taste of the food, according to Baba Shiv, associate professor-marketing at Stanford University's graduate school of business, and a leading researcher on marketing placebos. He said flavor comes from a combination of the flavors picked up by your taste buds along with a host of factors including the emotions a person has toward the brand.

Therefore, he disagrees with the strategy of quietly changing products and then telling consumers about the alteration after the fact. A better way "is to frame the change positively rather than allowing the public and media to frame it for them," he said.

Likewise, while KFC hasn't committed to advertising its trans-fat-free food, it may want to consider doing so. Mr. Shiv cited Miller Brewing's "Tastes Great, Less Filling" that positively positioned its reduced-calorie Miller Light. Rather than seeing the calorie cut as a negative, Miller framed it as better tasting and healthier.
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