Between 2012-2016 McDonalds lost 500 million transactions to competitors. In an interview with Fast Company last week, CEO Steve Easterbrook said the reason was because the company had ‘lost a meaningful connection with customers’. Rather than eating at McDonalds, people were going elsewhere, both to traditional rivals and to new fast-casual restaurants including Sweetgreen (est. 2007) and Shake Shack (est. 2004).
The answer to the problem, according to Easterbrook, is to introduce a new Quarter Pounder made with a fresh beef pattie instead of a frozen one, and to have the meat cooked on the spot upon ordering. For a company known for its predictability, this is a significant move and one that will involve major changes to its supply chain.
As I read this story last week, it made me reflect on whether the proposed change would be enough to fix the problem.
There are two questions that came to mind. Firstly, does a fresh beef pattie cooked upon ordering create a more meaningful connection with consumers compared to offering a frozen one? The answer is partly yes. Research shows people are seeking to include more fresh foods more often and are looking for convenient ways to do this.
The second question was whether the potential uplift in meaning would be enough to shift behaviour and prompt consumers to choose McDonald’s over its competitors. The answer to this question is likely not.
Creating a meaningful connection with consumers that is strong enough to influence behaviour today requires more than a change from frozen to fresh. This is a good start, however more needs to be done. It's an argument I put forward in my new book, Food for a Better Future, along with offering a potential solution.
So, other than the fresh food, what is it about food chains such as Shake Shack and Sweetgreen that has these outlets maintain a meaningful connection with consumers, and as result experience growth rates of up to 41% in 2017?
The answer may lie in the fact that they stand for something more than selling 'better for you' burgers and fresh, locally sourced salads. In fact their brand personifies a sense of ‘positive rebellion’, and this connects them with the growing number of people who are seeking to ‘rebel’ for the greater good of society. Food that is better for you is part of it. But it's not the full picture.
According to Larry Fink, head of the world’s largest investment firm Blackrock, the mood of society has changed and now demands that businesses, both public and private, serve a social purpose. This is a clear signal that doing more than simply selling goods and services is also good for business.
For those in the food sector, the most congruent way to demonstrate this is to develop values that serve a purpose connected to food. And these values often mean rebelling against the traditional, business as usual approach to food production, marketing and retailing.
Shake Shack do this through their umbrella commitment to ‘stand for something good’. This is demonstrated by the type of ingredients they use, their transparent supply chain and their environmental commitments. For Sweetgreen it’s that they are always looking for ways the business and its customers can be a positive force in the world and on the food system. The company’s food ethos includes a commitment to scratch cooking, transparency through working with farmers who are doing the right thing and sustainability from store design to waste management, local sourcing and food safety.
A key distinction is that by taking a stand and voicing their beliefs, both Shake Shack and Sweetgreens lead customers, rather simply following them.
In the article in Fast Company, the Menu Chief at McDonald’s Corporation, responsible for keeping an eye on food trends and determining when to adopt them, states that a key insight she’s learned is that what consumers say they want and what they actually buy are two different things and that this is a challenge. “That’s kind of the secret sauce,” she says. “What’s an emotional need you can answer?”
When looking to create greater brand meaning, that emotional need could be the need to do good. People are looking for a greater sense of meaning and are seeking ways to spend their dollars with companies that share their values. Creating greater brand meaning by developing values that are centred on your food, and which are supported by genuine actions over a long period of time, is a key way forward for brands looking to build and maintain future relevance.