Unable to pull out of a record sales slump, McDonald’s is facing an uncertain future.
Dan Coudreaut, the chain’s director of culinary innovation, thinks he understands the problem: consumers equate McDonald’s with junk food. "A lot of our guests don't believe our food is real," Coudreaut admitted last year.
Yet McDonald’s execs feel like they can change that outlook, and get their sales back on track, with fixes not directly associated with the most prominent thing on their menu—the food. Can the use of digital music mixes or fancy Iron Chef style meals that reimagine McDonald’s existing fare really help this fast food giant stay alive without real food innovation?
Fast Food, Junk Food
Everyone from your next-door-neighbor to Squawk on the Street’s Jim Cramer has an opinion on the state of the food selections offered at McDonald’s, and it’s very rarely good news for the burger chain.
Cramer points out that fast food joints like McDonald’s and Yum Brands’ Taco Bell and KFC are slowly dying out as consumers opt for healthier food options.
People want antibiotic free meat and organic vegetables, not just yogurt cups or salads.
Cramer goes a step further to predict the rise of food companies such as WhiteWave Foods, aka the anti-McDonald’s, where plant-based, organic foods are the main focus. For McDonald’s, according to the food world, the only salvation would be to completely overhaul their menus—a monumental task of food innovation.
What Can McDonald’s Do?
For McDonald’s, the current focus is to update the marketing and advertising efforts. The corporation recently brought in Julia Vander Ploeg, formerly of Ticketmaster, in hopes to create a revamped Global Digital Team.
In addition to improving the company’s digital delivery of media, the team is supposedly working on a digital music mix plan that will be offered as a reward (and incentive) for frequent diners. Across the nation McDonald’s teams are arranging foodie events, such as the recent celebrity chef faceoff in Tribeca that was “billed as ‘a transforming dining experience of 'fast food' to 'good food served fast.'”
The hope is that by stepping up digital efforts and working with food icons, the company will be able to rebrand itself as “cool” and recapture the business of Millennials and other tech-savvy diners.
And while building a connection with this increasingly influential demographic is certainly a good first step, it can’t be the only step that the franchise takes.
As today’s food trends show, diners care as much about where food came from and how it was prepared as they do about perks and experience. They want healthier, fresher options. And while McDonald’s has expanded its line of salads, added premium Angus burgers, and improved their yogurt parfaits, there are still more steps that McDonald’s must take before they can entirely disassociate themselves from their image of cheap, fast food that has been, by association, seen them labeled as junk food.
But, luckily, there’s an easy way McDonald’s can add substance to their new image—and further draw in Millennials—plug into the health and local food movement.
McDonalds Can Make the Most of Digital Efforts by Plugging into Nation Food Trends.
Some fast service chains have already taken the first step into local sourcing—turning fresh, high-quality ingredients and supporting local producers into a selling point— and it’s an example that McDonald’s would do well to follow.
At Smashburger, for example, diners are able to enjoy specialty burgers that showcase favorite regional flavors thanks to local sourcing practices. The Bluegrass Burger, a Kentucky-only specialty, features BBQ sauce made from Wild Turkey bourbon distilled in Lawrenceburg, Kentucky.
When the company marries its digital revamp with a concerted effort toward fresh food innovation like this, offering an extensive menu of artisan and health foods, McDonald’s may just be able to reverse their slumping stocks and reclaim their spot as America’s favorite fast service restaurant.