A drink that has proved popular in McDonald’s fast-food restaurants around the world, is finally making a debut appearance in a few select stores stateside. The McFloat is a combination of Dr. Pepper and soft-serve ice cream, and it will be selling for $1.99, at least for now, in the McDonald’s in Park Slope, Brooklyn and in San Francisco. The introduction of the McFloat is part of McDonald’s larger exploration into a more direct satisfaction of local tastes, such as offering garlic fries in San Francisco and Chobani Greek yogurt in 800 California branches.
“As part of our journey to build a better McDonald’s, our franchisees have more flexibility than before to offer new menu items like breakfast bowls, Gilroy garlic fries and yes, the Diet Dr. Pepper Float,” McDonald’s spokesperson Terri Hickey.
Across the globe the McFloat has taken on a variety of personas. Most international locations offer a Coke McFloat, but in the Philippines a thirsty customer can get a Green Apple Sprite McFloat. In Indonesia the locals love Iced Coffee McFloats.
McDonald’s is also considering the introduction of fresh beef, and is currently testing this item in 14 of its restaurants. If fresh beef is a hit, McDonald’s, floats or no floats, will never be the same.
As business at McDonald’s plummets the globally ubiquitous fast food chain is looking for ways to halt the downward spiral and retrieve a bit of their former glory. Sales are in the doghouse, and increased competition from fast-casual restaurants is making it even harder for McDonald’s to get back on track. In addition, McDonald’s is dealing with worker unrest and trouble from the franchises. McDonald’s announced this week a 3.3 percent decline in sales last quarter.
CEO Don Thompson is ready with a plan of action to turn his brand around.
• Create menus more in tune with the local consumer
• Lose some menu items: this reduces waiting times and improves the worker environment
• Allow customers to personalize their food
• Get there reputation as unhealthy and bad for the environment rehabilitated
“Conveying the facts and adjusting misperceptions about the freshness, quality and integrity of our ingredients appeals to our customers and supports the work we’re doing to offer greater menu choice,” Thompson said.
As Americans look to save money, more and more people are going out to eat at fast food restaurants. Three companies are good examples of fast food companies whose stocks have increased as of late.
McDonald’s (MCD) has been on a tear over the last year, rising from 72.14 to 90.45. It has had steady growth overall and sees no sign of stopping. The company, led by Jim Skinner, saw excellent second-quarter earnings. McDonald’s reported a 15% increase in profits. Much of its profits has been through beverages at the McCafe.
Although it’s stock stands at 51.51, YUM! Brands (YUM) range this year has been from 41.35 to 57.75, a significant increase and a sign of continued growth. Whether it’s KFC in eastern Africa or other Yum! brands in China and Japan, Yum! Brands is in it for the long haul, both in the USA and abroad. EVA Momentum created by Bennett Stewart of EVA Dimensions give YUM! an EVA growth rate of 1% placing it in the top 50 percentile of the Russel 3000. This makes YUM! a great long term buy.
Krispy Kreme Doughnuts
Krispy Kreme Doughnuts (KKD) may not be your choice of eateries, but it’s share is expected to post a report second-quarter profit of 6 cents a share by the time markets closed Thursday. This is double last year’s earnings of 3 cents a share. Shares are currently holding at 7.79.
It seems like McDonald’s has finally caved in to pressure. The word on the street throughout the western world has changed from enjoying every morsel one eats no matter how unhealthy it is, to fighting obesity with every bone in our bodies. McDonald’s has pretty much had no choice but to chime in and has done so in a very dignified way with its new Happy Meal, due out this coming September.
The portion of French fries will be significantly smaller, but will be supplemented by a quarter cup of apple slices. The apple slice addition has sort of been offered recently. But it was called Apple Dippers as it came alongside a caramel dip. The dip will be discarded in the new meal. Still in the Happy Meal will be the choice of cheeseburger, Chicken McNuggets or hamburger but the new meal beverage choice will include fat-free chocolate milk and 1 percent low-fat milk.
By the first quarter of 2012, McDonald’s hopes these happy meals will be available in all its 14,000 restaurants around America. There are more goals ahead. According to an article in AdAge, in the next nine years, McDonalds is going to be putting in significantly less sugar, fat and calories via “varied portion sizes and what the company called reformulations.” Indeed, already the foods offered made from chicken have undergone a 10 percent decrease in sodium and by 2015, the company hopes its sodium in general goes down by 15 percent.
On average, these changes will result in a 20 percent calorie reduction of the chain’s “most popular” Happy Meals. This is a huge change since Happy Meals comprise 10 percent of all of the chain’s orders.
It’s one thing to play dirty marketing tricks on the average man in the street, but quite another to do so on kids. Well, apparently, that’s exactly what’s been happening with corporations such as McDonald’s which is using online games “to take away parental control.” The thing is, we keep seeing studies that show that if this kind of marketing was lessened, so would the bad health of our next generation.
Parents Fight Back
But finally there has been an outcry from angry parents. Adults from the New York and San Francisco areas are trying to “curb this marketing by setting nutritional requirements for kids’ meals with toy giveaways.” Of course, McDonald’s isn’t going to take this lying down. It is in a battle against these parents through legal channels as well as enacting “pre-emptive bans of similar legislation in other states.”
The bottom line is, it’s just too easy for large corporations such as McDonald’s to access kids. Indeed it has been said that there has never been a better time for this, since they are able to “bypass parents so successfully.” Further, “online games are just the tip of McDonald’s $3 billion global marketing iceberg.” The only way that we can ensure the way food is marketed for the future is geared by parental and nutritional experts is by “demanding that McDonald’s stop marketing to kids.” It needs to be serious nutritionists – not “fast-food executives” directing how these foods are sold.
Marketing Gone OTT
It could be said that marketing has just gone over the top in recent years. It’s no longer just TV commercials (that of course can be ignored quite easily) but the interactivity of marketing techniques that will grab the attention. One example is of a Kraft Web site that asks consumers to “send a custom video to your friends to show how much you love KD [Kraft Dinner].” If you have not received a video, you are anyway able to view the whole “gallery” of videos that others have submitted. Individuals are able to log on to a whole host of commercial web pages and create their own avatars, “play with virtual pets and interact with their favorite movie, comic book and TV characters.”
This all makes it increasingly tough to fight this new, successful marketing guru. But it seems evident from the research above that parents are not going to take this lying down anymore. The question is, who is going to win? McDonald’s is an extremely large, successful corporation that is definitely going the legal route with all of this, and it thus might not be so easy for parents to fight it.
Only time will tell. But in the meantime, McDonald’s is working fearlessly to ensure it still has the upper hand when it comes to its McNuggets and cheeseburgers.