McDonald’s (MCD) announced this morning that it will serve fresh rather than frozen beef in its Quarter Pounder burgers across all of its restaurants by mid-2018. The burgers will be cooked when they are ordered, instead of in advance and kept warm—the current procedure intended to speed up service.
The move from flash-frozen to fresh beef is just the latest step by McDonald’s, one of the biggest buyers of beef in the U.S., to lure in consumers who increasingly say they want fresh, unprocessed food and are giving less weight to fat and calories when considering health and more to sourcing and provenance. The decision by the fast food giant follows its commitments to cage-free eggs and stricter antibiotics polices. It also has removed artificial preservatives from its McNuggets and nixed high fructose corn syrup from some of its buns.
But the alteration to the burger has a different level of significance. “We’ve been serving the burger we serve since 1973, and now we’re changing it,” McDonald’s U.S. President Chris Kempczinski told Coins2Day. “That is big.” The company must convert from a frozen supply chain for its beef to a refrigerated one, a change he put on par with what it took to begin serving all day breakfast in 2015. “Doing that at the scale of McDonald’s is not a minor undertaking,” Kempczinski said. One small change, for example: Operators will have to install a refrigerator next to the grill.
McDonald’s food push comes as it battles for market share against both fast food rivals like Wendy’s as well as higher-end burger concepts like Smashburger and Shake Shack. At its investor day earlier this month McDonald’s said that since 2012 it had lost 500 million customer transactions in the U.S.
Before making today’s announcement, McDonald’s tested fresh beef in 325 restaurants in the Dallas/Fort Worth area and in 77 restaurants in Tulsa. Kempczinski said the company has “spent over 18 months on this journey to really get comfortable bout the food safety question” and hired a third-party auditor to help. He noted that the switch to cooking when ordered added only a few seconds to customers’ wait times and that most didn’t notice the increase. The initiative resulted in a rise in sales and perception of the brand, value, food, and quality, he said.
McDonald’s is not the only company relying on changes to its food for a sales lift. Earlier this week Chipotle (CMG) announced that its tortilla was now free of preservatives and additives, with CEO Steve Ells taking a swipe at the quality of Panera (PNRA) and McDonald’s food.
“I really don’t worry about what our competitors have to say,” Kempczinski says. “When you’re the leader you play your own game. And we’re playing our our own game.”