Riding a 35 percent surge in profitability in the most recent quarter due to the successful shift to an all-day breakfast menu, McDonald’s is boldly taking a step into the new millennium by responding to consumer demand for more healthy options. Since November, the burger giant has been quietly testing fresh quarter-pound patties instead of frozen ones at 14 locations in the Dallas market. The test includes the Quarter Pounder with Cheese, Homestyle Burger, Bacon Clubhouse Burger, and the Double Quarter Pounder with Cheese.
The possible change to fresh beef is not as simple as it sounds. The company’s success from the start has been based on validated mass production processes and a reliable supply chain based on the use of frozen burger patties. In addition to potentially changing a core component of its bread and butter business model, McDonald’s is also testing the addition of low-calorie breakfast items at hundreds of locations in Southern California. These items include Chobani Greek Yogurt as an alternative to the existing sugar-laden yogurt parfaits and smoothies, as well as breakfast bowls featuring egg whites, turkey sausage or chicken chorizo, and kale or spinach. Not only is the company betting on consumers embracing the change to a healthier menu, it must show their franchisees that the changes are attainable within operations that must function like clockwork to meet profitability expectations.
Company spokeswoman Lisa McComb indicated that it is too early to tell whether fresh beef or healthier breakfast items will become a permanent element in the company formula, or if it will even expand to other restaurants outside the test markets, since the company often caters to regional tastes.
“Like all of our tests, this one too is designed to see what works and what doesn’t within our restaurants by considering the operational experience, customer response, price points and other important information, which may inform future decisions. … It’s very premature to draw any conclusions from this test,” McComb said.
This must all sound very promising to Wall Street as shares are at an all-time high, having gained 10 percent year to date.
