McDonald's News

It's not often that Consumers Union praises a fast food company, but the policy and advocacy division of Consumer Reports says McDonald's deserves a pat on the back for meeting its pledge to stop selling chicken that had been given medically important antibiotics.

In fact, the group says the fast food company met its commitment sooner than it had promised.

In praising McDonald's, Consumers Union called on Yum Brands to take the same step, demanding that meat and poultry suppliers limit or discontinue antibiotics use. It says the Centers for Disease Control and Prevention (CDC) has warned that too much use of antibiotics makes the drugs less effective against bacteria.

'Reckless overuse'

“The reckless overuse of these critical medications on healthy livestock is contributing to our antibiotics resistance crisis,” said Jean Halloran, Director of Food Policy Initiatives for Consumers Union.

She said McDonald’s has proven that it’s possible to eliminate antibiotic use on a large scale without affecting supply.

“We urge Kentucky Fried Chicken and other fast food restaurants to follow McDonald’s lead and make the same commitment to public health,” she said.

McDonald’s is several months ahead of schedule. When it announced it would phase out antibiotics in its chicken, it promised to do so by March 2017. Chik-fil-A, which sells more chicken than any fast food chain, says it will stop sales of poultry raised on antibiotics by 2019.

Animals given 80% of U.S. antibiotics

Consumers Union says about 80% of all the antibiotics used in the U.S. are not consumed by humans but by animals. The drugs are used to make the animals grow faster, and also to help keep them free of disease. When humans consume the meat, they're getting some of the antibiotics.

The CDC is leading efforts to reduce the use of antibiotics, both by prescription and in livestock. The health agency says at least two million people a year in the U.S. become infected with bacteria that are resistant to antibiotics. Of those, it says at some 23,000 people die.

The last Disney Happy Meal promotion will be this summer, with the release of "Cars and Pirates of the Caribbean: Dead Man's Chest."

Disney isn't giving a specific reason for the breakup, but the Los Angeles Times quotes a number of high-ranking company sources as saying Disney would like to put some distance between itself and McDonald's menu offerings, increasingly being blamed for obesity.

The Times also quotes a source at rival studio DreamWorks as saying studio executives are having second thoughts about a deal with McDonald's to promote "Shrek 3," set for release next year. Shrek is, after all, a little on the hefty side.

McDonald's, feeling the heat from nutrition advocates, recently launched a campaign to educate its customers about healthy food choices.

Eric Schlosser, author of "Fast Food Nation," told the Times that McDonald's has it within its power to reduce the flak it's receiving. "The obesity issue would be irrelevant if the food in the Happy Meals was healthy," he said.

McDonald's has lost a high-profile obesity lawsuit, with a Brazilian court ordering the fast food giant to pay $17,500 to a former manager who says he gained 65 pounds while working at a franchise.

The employee, whose identity was not made public, said he went from around 155 to 231 pounds during his time with the company. The plaintiff said that the random presence of "mystery clients" -- who are tasked with visiting franchises and evaluating their food quality, cleanliness and customer service -- made him feel obliged to sample the food every day.

He also scolded McDonald's for offering free lunches to its employees, charging that those meals -- which consisted mostly of hamburgers, French fries and ice cream -- increased his daily caloric intake.

Follows CPSI suit

The suit is further evidence that obesity-related litigation is still going strong, despite criticism that such suits absolve consumers of the responsibility of making healthy choices. In June, the Center for Science in the Public Interest (CSPI) served McDonald's with notice that it would file suit against the company unless it stopped selling its famed Happy Meals, which CSPI called "unhealthy junk food."

CSPI said that McDonald's "make[s] parents' job nearly impossible by giving away toys and bombarding kids with slick advertising," and compared it to a "stranger in the playground handing out candy to children."

In a sharply-worded response written in July, McDonald's CEO Jim Skinner said that "the public does not support [the] lawsuit," adding that "parents, in particular, strongly believe they have the right and responsibility to decide what's best for their children, not CSPI. It really is that simple."

True to its word, CPSI announced last month that it was proceeding with the suit.

Previous class actions

In 2005, McDonald's agreed to pay $7 million to the American Heart Association as part of a settlement concerning its use of trans fats in its food. It also agreed to pay $1.5 million for a public advertising campaign telling the public of the dangers posed by those fats.

And in 2008, a judge allowed a class action by consumers who alleged that McDonald's food made them obese to proceed, overturning a lower court's dismissal of the case. That action, Pelman v. McDonald's, alleged that "certain [McDonald's] foods [are] substantially less healthy than represented."

The lead plaintiffs in that case, Ashley Pelman and Jazlyn Bradley, both minors, brought suit on behalf of all consumers who bought and ate McDonald's food from franchises in New York. Their suit alleged that the food increased consumers' chances of developing "obesity, diabetes, coronary heart disease, high blood pressure, elevated cholesterol intake, and/or other detrimental and adverse health effects and/or diseases."

McDonald's is considering whether to appeal the Brazilian ruling, which was issued by Judge Joao Ghisleni Filho in Porto Alegre, in southern Brazil. In a statement, the company stressed that it "offers a large variety of options and balanced menus to cater [to] the daily dietary needs of its employees."

Perhaps the plaintiff should have spent more time taste-testing the salads.

Since our name is Consumer Affairs rather than Corporate Affairs, we generally focus on offering [hopefully] useful advice to consumers, and let the marketing departments of wealthy multinational corporations fend for themselves.

But today we’ll make an exception just long enough to advise McDonald’s: “Your attempts to sell yourselves as the go-to place for health-enhancing, educational kidstuff are getting embarrassing.”

Get this: a couple weeks ago, McDonald’s announced that it would stop advertising soda as the default drink option for children’s Happy Meals. Instead, it would try pushing milk, water or juice alongside a new marketing campaign to include “packaging innovations and designs to generate excitement for fruit, vegetable, low/reduced-fat dairy, or water options for kids.”

That, presumably, has something to do with this week’s announcement that McDonald’s will start handing out children’s books along with its Happy Meals.

This won’t be the first time McDonald’s has used books as Happy Meal promotions. In the early 1980s they gave out Little Golden Books, fun titles like Tom and Jerry’s Party and The Monster at the End of this Book. We actually had some of these books as children, and remember them being extremely funny by childish preschool standards—though we’ll admit that, for parents, the books probably lose their allure around the 357^th or 358^th time your kid demands you read them.

Fortunately, that shouldn’t be a problem with the latest round of Happy Meal book offerings. Rather than already-popular children’s stories, this time McDonald’s will offer self-published books emphasizing the importance of good nutrition.

Here’s what Ad Age had to say about them:

One book, "The Goat Who Ate Everything," is about a goat who has a big appetite and struggles to eat well but eventually learns to eat smart. Another, "Deana's Big Dreams," shows how Deana, the world's smallest dinosaur, grew tall by eating well.

Maybe McDonald’s would be better off reprising its early-1970s “You deserve a break today” campaign and aiming it at kids, who already have their parents, teachers, school cafeteria billboards and First Lady Michelle Obama constantly reminding them to eat right and worry about getting fat. Sometimes kids deserve a break, too.

Pre-emptive disclaimer: It’s very very important to eat a healthy, balanced diet containing all necessary vitamins, minerals, simple and complex proteins, sufficient levels of dietary fiber, and other nutritional stuff. Our own personal kitchen is chock-full of healthy ingredients used to cook healthy meals eaten in accordance with a healthy lifestyle. There’s also a big bag of jellybeans, and we’re eating some even as we type this.

Flavored sugar is all they are, with nary a vitamin or mineral to be found in them, and if we tried subsisting on an all-jellybean diet we’d surely develop horrible health problems before too long. But we’re not going to do that; we eat a generally healthy diet, and know that “eating healthy” doesn’t mean “everything you eat has to be Healthy with a capital H.”  So in general, we eat balanced, nutritious meals consisting of capital-H Healthy stuff — and sometimes we indulge on jellybeans, ice cream or greasy, salty fast food.

Meanwhile, McDonald’s is trying to add more capital-H foods to its menu while reducing the number of indulgence products it offers. That’s why it publicly announced its new intention to stop listing soda as a beverage offering on its Happy Meal menu.

Instead, store menus will offer water, milk and juice, and Happy Meals and other foods will feature “packaging innovations and designs to generate excitement for fruit, vegetable, low/reduced-fat dairy, or water options for kids.”

Humans in general — and children in particular — evolved to crave fat and sugar when we were still hunter-gatherers roaming the prehistoric African savannas. Fatty, sugary foods are extremely rare in the wild, and craving these rare, high-energy, high-calorie foodstuffs (along with our ability to turn excess calories into body fat), helped our ancient ancestors survive the epochs when food shortages were a constant threat.

Blame industrial farming

Only in the modern era of industrial-scale farming and food production has the average person needed to worry that their diet might contain too much fat or sugar, or too many calories; for most of our time on Earth, humanity’s main dietary problem was getting too littleof these things.

So, anyway, if McDonald’s thinks a marketing campaign can undo five billion years of evolutionary development and make kids crave water and vegetables in lieu of fatty, sugary yum-yums when they’re in the mood for a treat, we wish McDonald’s the very best of luck.

When AdAge wrote about the new McDonald’s soda-downplaying initiative, it quoted a spokeswoman from the Center for Science in the Public Interest who said “Getting soda out of Happy Meals is historic progress that should immediately be adopted by Burger King, Wendy's, and other chains. Soda and other sugar drinks are leading promoters of obesity and diabetes and one day it will seem crazy that restaurants ever made this junk the default beverage for kids.”

Perhaps. Or perhaps one day it will seem crazy that a grown adult makes no distinction between “drinking soda” and “drinking nothing but soda.” It’s just like jellybeans: neither is a capital-H Healthy food, but both can certainly exist in a healthy diet.

Of course, the CSPI has been opposed to McDonald’s and other fast-food outlets for a long time. In 2010, it tried (unsuccessfully) to sue the company and force it to stop handing out toys along with its Happy Meals.  CSPI spokesman Michael Berman insisted that putting toys in a Happy Meal (or doing anything else which might convince a child to eat something that isn’t Healthy with a capital H), is “as inappropriate and anachronistic as lead paint, child labor and asbestos.”

See? If it’s not Healthy with a capital H, it may as well be outright poison, and thus according to the CSPI, the next time your kid asks you for a Happy Meal so she can have the cool toy inside, it is not inappropriate to feed her lead paint instead. They’re practically the same thing.

Change is coming to McDonaldland. Last month, when we mentioned McDonald’s then-new plan to pass out self-published pro-nutrition kids’ books with its Happy Meals, we were rather skeptical of the idea that the program would prove successful.

But successful or not, it didn’t last long. Now, barely more than a month later, McDonald’s is unrolling another new Happy Meal promotion: NFL-themed toys to tie in with the children’s Rush Zone show on Nickelodeon, in addition to McDonald’s status as the NFL’s “official restaurant sponsor.”

The company is also investing an additional $3 billion (that’s “billion” with a “B”) to remodel its famous Golden Arches – or, rather, to remodel the restaurants which bear them. 

The scheduled enhancements are to include extra drive-thru windows (a “Fast Forward Drive-Thru,” where customers can go if their order isn’t ready by the time they reach the regular pickup window).

McDonald’s is also branching out into the grocery-store-coffee business; AdAge reported the company’s intention to start selling its McCafe coffee in grocery stores next year.

AdAge quoted a McDonald’s executive who noted that 70 percent of American coffee consumption is at home, yet the chief purpose of the grocery store sales is supposed to be the creation of “greater awareness and [to] sell more coffee in our restaurants.” To that end, the company has also admitted that its customer service record needs improvement, especially when handling lunchtime crowds.

So, to recap the week in McDonald’s improvisations: more coffee sales, hopefully faster coffee sales, football-themed kids’ toys and a third drive-thru window called “Fast Forward” where customers go to wait when the first two drive-thru windows haven’t finished filling their orders yet. We’re assuming they still sell burgers and fries, too.

It isn't enough for fast food restaurants to offer healthier fare for children. They have to present the healthier food in ways that kids can recognize it.

So says a new study by researchers at the Dartmouth Hitchcock Norris Cotton Cancer Center. The study gathered a group of kids, age 3 to 7, and showed them screen grabs from a number of fast food TV commercials.

The commercials for McDonald's and Burger King promoted kids' meals that included healthier contents -- things like milk and apple slices.

Not sure what they're seeing

But the researchers discovered that was completely lost on many of the children viewing the advertising images. Some were unable to recognize the milk in the McDonald's ad.

Others consistently misidentified the apple slices in the Burger King ad as French Fries, as graphically illustrated in the video below.

The reason for the children's confusion is understood when you look closely at the apple slices container. While it bears the picture of an apple, it is nearly identical to the container traditionally used for fries. The point is driven home by the last child in the video, who identifies it as “French fries in an apple bag.”

Trying to be helpful?

But maybe the fast food companies consciously designed the apple slices to look like fries to make them more palatable to children. After all, kids like fries – maybe they'll like apple slices if they look like fries.

The study's authors aren't buying it.

"Burger King's depiction of apple slices as ‘Fresh Apple Fries' was misleading to children in the target age range," said Norris Cotton's James Sargent, MD, the principal investigator for the study. "The advertisement would be deceptive by industry standards, yet their self-regulation bodies took no action to address the misleading depiction."

Push for healthier food

Both McDonald's and Burger King have offered healthier food choices in kids meals since 2010 amid pressure to take steps to help reduce child obesity. The researchers began studying the television ads for those products that same year.

They say that of four four healthy foods depicted in the ads, only McDonald's apple slices were recognized as an apple product by a large majority of the target audience. The other three depictions, they say, were poorly communicated.

Fast food companies might react to this criticism with an air of exasperation. After all, they've altered their menus to offer children a healthier choice and promised to de-emphasize toy giveaways, long a staple of marketing to children.

But Sargent and his colleague say children need to be aware of the choices, and pictures of apple slices that are confused with French fries don't help.

"The fast food industry spends somewhere between $100 to 200 million dollars a year on advertising to children, ads that aim to develop brand awareness and preferences in children who can't even read or write, much less think critically about what is being presented," Sargent said.

Self regulation

A 2013 study funded by the Robert Wood Johnson Foundation, which also funded this most recent research, was sharply critical of the industry's voluntary approach to advertising regulation. The Children's Food and Beverage Advertising Initiative (CFBAI), formed in 2006, is a voluntary program run by the Better Business Bureau.

CFBAI includes 17 food and beverage companies that have promised to devote all of their child-directed advertising to healthier foods and lifestyles.

The study, however, found that fast-food restaurants tended to emphasize toy giveaways and movie promotions when marketing to kids on TV, a move counter to the industry's promise.

McDonald's wants you to know that, despite preliminary reports suggesting the hamburger chain would supplement its decade-old ad slogan “I'm lovin' it” with the complementary slogan “Lovin' beats hatin',” the company is not – repeat, not – actually planning to adopt “Lovin' beats hatin'” as its new slogan.

Instead, the new slogan is to be “Lovin' is greater than hatin',” also spelled out mathematically as “Lovin' > Hatin'.”

The Wall Street Journal blog first reported the incorrect “Lovin' beats hatin'” rumor last week, but only yesterday did BurgerBusiness.com discover that the actual intended catchphrase is slightly different: last week, McDonald's filed U.S. federal trademark registrations for “Lovin' is greater than hatin'” and “Lovin' > hatin'.”

Overwhelmingly negative

In other news, American students continue to score below the worldwide average on mathematics proficiency tests. So maybe McDonald's could promote its new campaign as an attempt to increase kids' familiarity with mathy concepts, but at what cost to proper writing skills?

Of course, it might not actually matter. Given the overwhelmingly negative response to both reported ad campaigns, and given also that the theoretical purpose of advertising is supposed to be “Make people like your company enough to spend money there,” McDonald's might eventually decide to abandon the campaign after all. Advertising professionals must surely know it doesn't bode well for any promotional campaign, when a search for the slogan on Twitter brings up typical remarks like this:

.@McDonalds's new "Lovin' > Hatin'" slogan to reach Millennials might as well be "I'm a cool mom, right?!

Despite recent trends toward healthier foods, U.S. consumers still love hamburgers. A large beef patty piled high with garnish and condiments has never fallen out of favor. In fact, its popularity may be growing.

That fact was underscored this week when Shake Shack, a small chain featuring gourmet burgers and thick, creamy milk shakes, surprised Wall Street with blowout earnings.

The New York based firm, which enjoys a “health halo” among foodies who value its antibiotic-free beef but overlook the massive calories, reported sales jumped nearly 13% in the second quarter. Analysts were looking for an 8.6% rise.

Shake Shack vs. McDonald's

Shake Shack is immensely popular with hip, urban consumers whereas McDonald's, the long-time fast food burger champion, is not. McDonald's has struggled in recent years as it has tried to add healthier fare to its menu and removed some of the lower-priced “value” items that many of its customers like.

But there is evidence that McDonald's is ready to up its game in the burger wars. This week, Wall Street trader Tim Seymour, a regular on the CNBC program Fast Money, filed this video report from a Manhattan McDonald's location that is experimenting with a customizable gourmet burger.

Using a touchscreen kiosk, Seymour was able to create a burger to his liking, including being able to select the type of bun and gourmet condiments he wanted. The kiosks are being added to select McDonald's locations in the roll out of what the company calls the“Create Your Taste” burger.

Game changer

By the time Seymour had created his burger, his custom toppings had pushed the price up to $10, but he seemed to be satisfied. He called the “Create Your Taste” a “game-changer” for the iconic burger franchise.

Technomic's latest Burger Consumer Trend Report says 57% of consumers eat a burger at least once a week. It notes that all burger restaurants, not just those offering high-end, gourmet burgers, are prospering in spite of health concerns and rising beef prices.

"Utilizing value beef cuts and incorporating non-beef proteins can help lower costs and broaden the range of needs burgers can satisfy," said Sara Monnette, Technomic vice president. "Specialty ingredients like pretzel buns can enhance the value perception, and unique toppings and sauces, stuffed patties, and premium sides can add to craveability and brand differentiation."

The report, based on interviews with more than 1,500 consumers and restaurant operators, suggests McDonald's might be on the right track with its “Create Your Taste” feature. It found 61% of consumers think it is important to be able to customize the toppings and condiments, with 43% prioritizing build-your-own burgers.

On a weekly basis, 39% of consumers get their burgers from fast-food restaurants and 39% make them at home.

There is little question that younger consumers have strong feelings about the food they eat. They tend to be as concerned with how it's produced as how it tastes.

Some manufacturers and restaurant chains have been able to profit from this trend by adapting to Millennials' value and preferences. McDonald’s, because of its vast scale, has had more difficulty.

But the fast food giant is signaling that it “gets it,” announcing that it will fully transition to cage-free eggs for its nearly 16,000 restaurants in the U.S. and Canada over the next 10 years.

Where food comes from

“Our customers are increasingly interested in knowing more about their food and where it comes from,” said McDonald’s USA President Mike Andres. “Our decision to source only cage-free eggs reinforces the focus we place on food quality and our menu to meet and exceed our customers’ expectations.”

Small chains and independent restaurants have won youthful followings in recent years by stressing “fresh” and “locally sourced” food. McDonald’s, with thousands of restaurants around the world and a vast supply chain, has sometimes found implementing those concepts challenging.

Additionally, McDonald’s built its empire at a time when different food values prevailed. Much of McDonald’s success was because it was convenient, affordable and predictable. Also, kids loved going there.

But in the age of childhood obesity, McDonald’s has been forced to dial back its appeal to children. Sales slumped and its stock price suffered.

New direction

In March, McDonald's took a step in a different direction when it announced that it would stop using chickens treated with antibiotics that are also used to treat humans. Some activist groups reflexively critical of the company expressed skepticism, but The New York Times noted that McDonald's is one of the largest buyers of chicken in the U.S., and the decision would likely have a major impact on how poultry is raised.

This time, there may be fewer skeptics.

“This is a watershed moment in a decades-long effort to eliminate the cruelest confinement from our food supply,” said Humane Society of the United States (HSUS) president and CEO Wayne Pacelle, in a statement emailed to ConsumerAffairs. “McDonald’s admirable move makes clear that egg productions’ future is cage-free.”

That's because McDonald's scale is huge. On an annual basis, U.S. stores use approximately two billion eggs and McDonald’s Canada purchases 120 million eggs to serve on its breakfast menus.

McDonald's also took pains to point out that it already sources some of its eggs from cage-free suppliers, pointing out for good measure that one supplier – Herbruck’s Poultry Ranch in Michigan – is “family owned,” another trait prized by Millennial consumers.

Marion Gross, senior vice president and Chief Supply Chain Officer of McDonald’s North America, says the company has been working toward going 100% cage-free for some time, calling the latest announcement a big milestone “building on our work with industry experts and suppliers to improve the treatment of animals.”

McDonald’s has been attempting to go back to the basics to rework its fast food image. Earlier this month, the company announced that it would be catering to existing customers by focusing on hamburger sales, instead of selling wraps and other healthier products to draw in new customers.

Now the chain is doubling down on its burger approach. In an announcement made Thursday, the company said that it would be transitioning from using frozen patties to fresh beef in the majority of its restaurants by mid-2018. The change will augment other modernization efforts, such as using ordering kiosks and providing mobile payment options.

“Today’s announcement is part of a continuing food journey for McDonald’s,” said McDonald’s U.S. President Chris Kempczinski.

Fresh beef

This isn’t the first time that McDonald’s has talked about using fresh beef to make its burgers. About a year ago, the company started testing the idea in 14 restaurants in the Dallas area, saying that if consumers liked it then they would consider rolling it out nationally.

That program eventually expanded to hundreds of restaurants in the Dallas area, and consumers were happy to see that the change did not overly affect prices, according to the New York Times. While McDonald’s spokeswoman Becca Hary pointed out that prices will ultimately be set by franchise owners, she stated that the company did not expect consumers to feel much burden.

“We do not anticipate there will be any significant impact on price when this sandwich rolls out nationally,” she said.

Catering to customers

While they may be responsible for setting future prices, some franchise owners have expressed concerns about switching from frozen patties. They point out that freezing their product is a good way of killing pathogens like E. coli, and that using fresh beef increases the risk of possible contamination.

Despite that risk, McDonald’s seems to be running with its new identity of giving the customers what they want. Hary said that if the fresh beef change goes well, then changes to other items could be just around the corner.

“[McDonald’s will] continue to look at the rest of the menu based on what the customers are asking for,” she said.