McDonald’s Gain Burger Market Share In US Because Of Fresh Beef Quarter Pounders

The fast food giant McDonald’s is befitting after all the trouble it took to stage the turnaround from cow to beef patty.

It was more than four years that the company had been attempting to launch fresh beef at McDonald’s. This change also cost more than $60 million to pull off for the meat suppliers of the fast food company.

Many analysts and experts also viewed the change to be a risky one for the company. However now it seems that the risks and the logistical hindrances were worth taking.

For the first time in five years, McDonald’s managed to gain burger market share in the informal-eating-out category in the United States, the company said on Monday. The credit of this gain was partly attributed by the company to its US wide launch of fresh beef.

Fresh beef for its Quarter Pounders was launched by the company across most of its stores in the US in May of 2018. McDonald’s stores located locations in Hawaii, Alaska or US territories do not have the fresh beef on their menu.

In recent years, the fast food industry has seen intense rivalry with all companies vying for gaining a greater number of customers. Wendy’s – the closest rival of McDonald’s in the US, has for long touted that its beef patties are never frozen and that quality has been leveraged by it to take a dig at its Chicago based rival McDonald’s. With the increase in the efforts to gain more customers and increase footfall in stores by fast food companies, the radical and different approach of going for plant-based meats have been taken by other restaurant companies such as Burger King.

Offering its customers better quality food has been the a part of the most recent business strategy of McDonald’s despite the fact that the strategy has the potential to create greater complexity to its kitchen as well as in its supply chain. Kitchen utensils for handling fresh beef and refrigerators designed to maintain the right temperature had to be created by McDonald’s to fulfill that strategy. Use of 100 per cent cage-free eggs by 2025 is also being planned by company.

“We’re proud that taste and food quality drives sales,” Chris Kempczinski, the chain’s U.S. president, said in a statement.

During the first quarter of 2019, 40 million more quarter-pound burgers compared to the same period a year ago was sold by it, McDonald’s said. According to the company, 30 per cent more Quarter Pounders was sold by the fast food chain in the first year of the nationwide launch.

“I think it’s a better product, and I think consumers have noticed,” Mark Kalinowski, CEO of Kalinowski Equity Research, said.

It still remains to be seen whether the fast food chain would try out launching fresh beef in some of its overseas markets or for other burgers such as the Big Mac, Kalinowski said. a fresh beef version of the Archburger, which was an updated version of its unsuccessful 1996 Arch Deluxe, was tested by the company in several stores in Texas and Oklahoma in early 2018.

(Adapted from CNBC.com)

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