According to a memo from a top McDonald’s franchisee, only one in five millennials have tried a Big Mac, the fast food empire’s flagship burger. We imagine some Gen Xer is shaking their fists at the sky at this very moment, screaming “back in my day, we ate Big Macs! So many Big Macs! All the Big Macs!”
McDonald’s burger sales overall have flatlined over the past few years, and before that only grew at a rate of 1 to 2 percent annually. A study from earlier this year showed that fast-food consumers prioritize quality of products over “healthy” options, and McDonald’s isn’t exactly known for its fresh ingredients. Establishments like In-N-Out Burgers, which boasts never-frozen products, beat out McDonald’s on the quality front, and that’s what consumers care about.
McDonald’s has built its fast-food empire on the tenets of low cost and speed, and that just isn’t going to cut it anymore. The corporation has put together a “sensory panel” to refocus on flavor and is exploring alternate cooking strategies. McDonald’s is also considering taking a page out of In-N-Out’s book by switching from frozen to fresh beef, although a change like that will likely take years to implement. And goals like that are also at odds with McDonald’s goal delivery time: The powers at be believe that a customer shouldn’t have to wait longer than a minute and a half after ordering to have their burger in their hands.
Plus, recent attempts to offer higher-quality burgers at a higher price haven’t panned out for McDonald’s. That screaming, fist-shaking Gen Xer might recall the Arch Deluxe, a burger with a potato-flour bun and mayonnaise-mustard sauce introduced in the mid-1990s that cost 32 cents more than a Big Mac and never took off. It was phased out in 1998. A McDonald’s line of Angus beef burgers similarly failed in 2009.
Meanwhile, other burger companies like Five Guys, Smashburger, and Shake Shack are all growing much faster than McDonald’s, especially among millennials. Smashburger is but a speck in the fast burger industry compared to McDonald’s, with only 370 outlets across 37 states and 9 countries, but the percentage of millennials who visited Smashburger more than once a month grew by 11 percentage points from the end of 2013 to the second quarter of this year, while McDonald’s saw only a 6.5 percentage point increase. As McDonald’s experiments with new strategies and products, it will have to keep millennials—who have overtaken baby boomers as the nation’s largest demographic group—in mind. And letting them design their own burgers, as the New Zealand McDonald’s branch discovered, is not the answer.
[via Wall Street Journal]