McDonald’s now claims to be in the “informal eating out” category. Riiiight.
By Danielle Wiener-Bronner, June 24, 2019
New York (CNN Business) – Fresh beef is helping McDonald’s sell more burgers and gain market share.
Last year, the burger chain switched to fresh beef quarter-pound burgers from frozen at most of its stores in the contiguous United States.
That change has led to a 30% spike in sales of quarter pounders on average over the past 12 months, the company said Monday.
It also helped McDonald’s (MCD) burgers gain market share in what the industry calls the “informal eating out” category for the first time in five years, the company said.
McDonald’s made the change to appeal to consumers’ growing interest in ingredient transparency. Buyers today want to know where their food comes from, Marion Gross, the company’s chief supply chain officer for North America, told CNN Business.
“Our customers are changing at a super fast pace,” she said. “As a result, we’ve had to change, too.” The company has also made commitments to reduce the use of antibiotics in its beef and switch to cage-free eggs.
McDonald’s said sales of the fresh quarter-pound burger were especially strong in May 2018, when it was first introduced, thanks in part to marketing efforts. More recently, the company included the fresh beef burger in its 2 for $5 deal for the first time.
The promotion performed well, CFO Kevin Ozan noted in an analyst call discussing first-quarter earnings.
Going from frozen to fresh beef was a challenge.
“There was a huge transformation that was required” to make the shift, Gross said. Suppliers needed new packaging equipment and more refrigerators, among other things, to make sure the fresh beef was handled safely, she said … Read more.
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