MCDONALD’S GOLDEN ARCHES may have marched into 119 countries, but the quintessentially American company still resides in a quintessentially American suburb. At its headquarters in Oak Brook, Illinois, low brick buildings are linked by bucolic trails. In Hamburger University managers learn McDonald’s lore and way of doing business. Hallways are named after items on the menu; you may find yourself in McNugget Aisle 2. Even French masterpieces have been Mac-ified. In a reproduction of Georges Seurat’s “Grande Jatte”, the woman in the foreground holds not just a parasol but a McDonald’s take-away bag.No company has so embodied the shift in America’s diet as McDonald’s, and no company has been more vilified by health advocates, yet until recently no fast-food company has done better. Last year McDonald’s was America’s leading fast-food restaurant, with sales of $34.2 billion–more than those of Subway, Starbucks and Wendy’s combined. But in November the company reported the first dip in monthly sales for nine years, and soon afterwards it announced it was replacing its American president. The new boss, Jeff Stratton, has a delicate task ahead.
McDonald’s is used to being attacked. In 2004 “Super Size Me”, a documentary, recorded the sickening result of eating solely at McDonald’s for a month. (McDonald’s has since scrapped its super-sized fries and sodas.) In January the company said it had stopped using ammonia-treated beef, also known as “pink slime”. It has been the target of a number of lawsuits. Most it recently it was sued over the seductive use of toys in Happy Meals, the McDonald’s meal pack for children. A judge dismissed the suit in April. Yet despite the hoo-ha 25m Americans visit a McDonald’s each day.
Even so, the company has made a big push to give itself a healthier image. It has cut levels of sodium in its offerings by 11% since last year. In March it announced that it would offer apples and smaller fries in its Happy Meals. It has also introduced other healthy items, such as its Fruit & Maple Oatmeal. Cindy Goody, the company’s nutritionist, boasts that this accounts for two servings of whole grains (the government recommends at least three a day). In September the company said it would begin posting calorie counts on its menus, earlier than required by a new law introduced by Barack Obama.
But will consumers buy the healthier meals they claim to want? There is the cautionary tale of the McLean Deluxe, a less fatty burger that tested well in the 1990s but failed miserably in the market. “They said they wanted it, we gave it to them and they didn’t eat it,” says Greg Watson, McDonald’s vice-president for menu innovation. Consumers still love the core McDonald’s menu. When executives went on a listening tour earlier this year to hear consumers’ thoughts, many mothers asked McDonald’s to improve nutrition but also told the company not to change the recipes for favourite foods such as Big Macs or French fries. “Some items just need to be left alone,” says Mr Watson.
Today McDonald’s introduces new items cautiously, trying them in just a few restaurants or markets for a limited period. An experiment to add blueberries to its oatmeal will not be repeated next year. Dan Coudreaut, the head chef, is more optimistic about an egg-white sandwich on a wholegrain bun. One benefit of healthier items, explains Mr Watson, is that they make customers feel better about the McDonald’s brand. Some of them will order the healthier food and some will still order their favourite burger but be happier about it, in the knowledge that the company also does salads.
Other changes are being introduced, slowly. Ms Goody says the company may reduce the size of its biggest soda from 32 ounces to 30 ounces. In the past year Mr Coudreaut’s kitchen tested a newer, better veggie burger. “It was delicious,” says Mr Watson, “but there is no way our customer would order that today.” The burger never made it out of the test kitchen.
At the McDonald’s staff restaurant, the head chef proudly points to a new burger being launched in the American market. The Cheddar Bacon Onion Angus Third Pounder weighs in at 41g of fat, or 62% of an adult’s recommended daily fat intake.
Click here to subscribe to The Economist
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.