McDonald's president reveals how the chain is managing a potential fast-food identity crisis

Hollis Johnson/Business InsiderMcDonald’s has quietly made a major change to its burgers.
  • McDonald’s quietly removed artificial preservatives and flavours from all of its classic burgers.
  • The chain’s president said that the change is part of a journey in “improving customers’ perception of McDonald’s.”
  • McDonald’s has been forced to juggle both improving its reputation and keeping prices low to win over budget shoppers, without alienating customers on either side.

McDonald’s has quietly made a major change to its burgers.

The fast-food chain announced on Wednesday that it has cut artificial preservatives and flavours, as well as artificial added colours, from all of its classic burgers. According to the company, nearly two-thirds of all burgers and sandwiches have cut artificial ingredients (as long as customers hold the pickle, which has yet to make the change).

The menu tweaks are part of what McDonald’s executives call a “journey” in trying to change how people see the chain, which has long been painted as a villain of the fast-food industry.

“We do believe it’s improving customers’ perception of McDonald’s,” McDonald’s USA President Chris Kempczinski said on a call with media on Wednesday.

In addition to cutting artificial ingredients from food, McDonald’s has been remodeling restaurants, adding table service, and installing kiosks.

“Some of the things we are announcing today … are going to be more relevant to some customers than others,” Kempczinski said. “But all of these moves are intended to be building on one another in combination.”

At the same time, McDonald’s cannot lose customers who are focused purely on value when eating at the chain’s restaurants. According to Kempczinski, cutting artificial ingredients was not exorbitantly expensive, and McDonald’s absorbed any extra costs instead of raising prices.

Slashing prices while fixing reputations

McDonald's Value MenuHollis Johnson

According to industry insiders, attention to nutrition and “clean” menus is necessary to compete in the mainstream restaurant industry, even as chains struggle to maintain super-low prices.

“We are in the age of new commitments to standards we haven’t seen before,” Mizuho analyst Jeremy Scott told Business Insider. Speaking more generally of industry trends, Scott said that chains have seen a waterfall effect of one chain after another coming forth and making pledges like reducing sugar, removing artificial ingredients, or cutting antibiotics.

“You’ve got Baby Boomers watching the diets,” said John Hamburger, the founder of industry trade publication Franchise Times Corp. “You’ve got younger people coming up who were taught at a young age to watch their diets and be careful what they put in their mouth.”

At the same time, fast-food chains have been battling to win over budget shoppers.

“Deal customers, who are people that love fast food, but they will go to several different outlets based on who’s got the best deal,” McDonald’s CFO Kevin Orzan said in a call with investors in July. “I think that’s the area where we haven’t been as competitive as we’ve needed to be because some of our competition has stepped up on their deal side.”

McDonald’s rolled out its $US1 $US2 $US3 menu in early 2018, in an effort to provide a consistent value platform that the chain lost with the death of the iconic Dollar Menu. A more upscale McDonald’s could seem at odds with these efforts.

Kempczinski, for his part, disagrees. On Tuesday, he said value and quality are “two sides of the same coin.”

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