McDonald's gets real about beef as burger battle escalates 8:20 AM ET Tue, 6 March 2018 | 01:26
McDonald's is no longer testing fresh beef, it's launching it.
The burger giant said Tuesday that it has already brought fresh beef Quarter Pounder patties to about 3,500 domestic restaurants so far and it plans to reach some 14,000 U.S. locations by early May. Locations in Hawaii and Alaska are not included in this rollout.
While fresh beef has been in the works for years, it comes at a time when fast food restaurants are battling for consumers' attention and their wallets. Dollar menus, quirky, limited-time menu items and beverage discounts have all been launched in an effort to woo diners.
McDonald's has tried to walk the line between cheap deals and better quality food over the last few years. The burger chain has been working to upgrade the quality of its menu and its transparency around how it sources its ingredients. The Golden Arches has ditched antibiotics from its chicken nuggets, added fruit options and removed soda from the Happy Meal.
'No better place to start than with our burgers'
"McDonald's is a burger company and there is no better place to start than with our burgers," Chris Kempczinski, president of McDonald's U.S., told reporters ahead of the announcement.
McDonald's fresh beef launch has been in the works for more than 4 years, helped along by Joe Jasper, who has been with the company for more than 40 years. Jasper owns 20 McDonald's locations in the Fort Worth area of Texas and was the very first franchisee to test out fresh beef.
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Jasper, who has been part of McDonald's food and menu innovation team for about 15 years, was tasked with finding ways to elevate the company's burgers.
"I talked to my staff and I asked them 'what do you think we should do?'" Jasper said. "They said 'Well, Joe, we can't let the drive-thru slow down. So that got us to thinking, the only way to make a burger fast is from a fresh steak. So, we started experimenting with fresh beef."
In fact, the fresh beef patties actually cook 20 to 40 seconds faster than a frozen patty, according to McDonald's.
When McDonald's sought to expand the fresh beef test to more locations in Texas, Jasper handpicked several franchisees that he thought would be resistant to adding fresh beef to the menu.
Fresh beef testing
The fresh beef test at McDonald's was met with skepticism from franchisees, investors and even members of the McDonald's team. Many feared that adding fresh beef would slow down productivity and create unnecessary food safety risks.
It was important to Jasper to show franchisees how fresh beef could work in the restaurant and get them to rally behind it, rather than push them into adopting it. He said that about a third of McDonald's leadership visited his locations in Texas to taste the fresh beef burgers.
After the test of fresh beef in more than 400 restaurants in Texas and Oklahoma, the company said it received a 90 percent satisfaction rating from customers as well as a 90 percent intent to repurchase rate.
A costly decision
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The decision to bring fresh beef to the majority of McDonald's domestic locations was a costly one. McDonald's suppliers spent upwards of $60 million updating their supply chain to transition from frozen Quarter Pounder patties to fresh ones.
Changes were also made in the McDonald's kitchen. To prevent food safety issues, the company has created a separate drawer for the fresh beef patties that keeps them at the right temperature and staff must handle the meat using blue plastic gloves. This ensures that food preppers on the line do not handle any uncooked meat.
To promote the launch of fresh beef nationwide, McDonald's is adding a new Signature Crafted Recipe to its menu. The Garlic White Cheddar burger features the fresh Quarter Pounder patty and is topped with lettuce, tomato, garlic chips, creamy garlic aioli and white cheddar cheese.
Fresh beef may not be a silver bullet for McDonald's, however. Analysts in the last week have worried that the company may be cannibalizing its own sales with the number of promotions it has been launching.
Last Friday, David Palmer of RBC Capital Markets said that McDonald's new Dollar Menu could pull customers away from its popular breakfast foods. He also said that he thinks the new Dollar Menu doesn't have a "hero" item on it, something that will woo diners to McDonald's over other fast food options.