Milling & Baking News -- July 3, 2018 - 7
McDonald's and the rising bar for convenience
t was in the 1970s that the fortunes of the grain- to consume McDonald's food. The first is digital inbased foods industry and McDonald's first be- teraction, including mobile ordering. Currently, the
came linked, a time when the fast-food revolution company has 20 million users of its app, a figure
was dubbed the "bun revolution." Developments at Mr. Easterbrook said the company is committed to
the world's leading hamburger chain are watched growing. Home delivery, using Uber Eats and other
closely in milling and baking circles to this day.
delivery services, is the second initiative. The third is
Over the past few years McDonald's has under- an updating of the company's stores. The makeovers
taken numerous initiatives to stay in step with con- include self-order kiosks.
sumer desire for foods with more sustainable or apTo whatever degree one may wonder about the
pealing ingredients, including a move to cage-free desirability of home delivery of a hamburger, french
eggs, taking antibiotics out of its poultry supply fries and a beverage, McDonald's executives have
chain and the introduction of fresh beef (rather than described delivery business as "great" because it is
frozen) in its Quarter Pounder hamburgers. Per- highly incremental and is used most heavily during
haps even more powerful than what McDonald's slower times of day.
has done to "clean up" its menu has been the com"It's generally a daypart, primarily in the evepany's embrace of technology aimed at another key ning, that we have capacity in the delivery," said
demand driver - convenience.
Kevin M. Ozan, a McDonald's
Grain-based foods companies executive vice-president and
The seriousness with which McDonald's views convenience as an
have been trailblazers for
chief financial officer.
important objective was described
This thinking is finding its
more than 100 years when it
in recent comments by the compaway into the consumer packaged
comes to introducing everny's president and chief executive
foods segment. While home meal
more convenient products.
officer, Stephen J. Easterbrook.
delivery pioneer Blue Apron
A little more than three years since he has taken the Holdings, Inc. has struggled since its initial public
helm, Mr. Easterbrook has drawn high marks for lift- offering, Nestle USA in 2017 took a stake in Freshly,
ing McDonald's out of an extended funk. In marked a company that prepares and delivers meals each
contrast to the woes of the Subway restaurant chain week that consumers simply heat and serve. More
chronicled recently on this page, McDonald's has en- recently, SnackNation, a direct-to-consumer snack
joyed top-line growth for 11 straight quarters.
delivery service, raised $12 million in Series B fundAt the Sanford C. Bernstein Strategic Decisions ing. The company delivers better-for-you snacks to
Conference in late May, Mr. Easterbrook said McDon- offices around the country.
ald's long has been the benchmark for dining conveLike food companies, food service operators are
nience "with 14,000 restaurants here in the U.S., a lot competing for share of stomach at a time of scant
of long trading hours, many 24 hours and affordable." growth. Mr. Easterbrook described the restaurant
"That makes you very accessible, very conve- industry as "slightly oversupplied" at the present
nient," he continued. "But that consumer landscape time. "Whatever growth is coming out there typichanges with the arrivals of the Amazons and the cally is coming from new unit additions," he said.
Ubers. People's definition of convenience changes, "That means people are losing volumes, and that
and suddenly our somewhat historic business model equation never ends up in a happy place."
is looking a little tired."
Grain-based foods companies have been trailHaving updated its menu and how McDonald's blazers for more than 100 years when it comes to
interacts with customers, the company has launched introducing ever-more convenient products. Findthree initiatives, all of which involve technology ing ways to climb still higher on the convenience
and all of which seek to make it more convenient ladder will be crucial for continued success. MBN
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July 3,/ 2018