Thursday, March 5, 2015

McDonald's from fast to sustainable: Too late?


Source: McDonalds


McDonald's, the worlds largest and probably one of the most iconic symbols of USA outside USA is struggling. McDonald's is struggling not just to get new customers to eat at its chains across the globe but also to keep its current customers. Much of this customer attrition is a result of consumer awareness of the perils of fast food. The perils that has been televised in Super Size Me and Fork Over Knives. So where are the McDonald's customers eating now? The truth is they are still eating at fast food restaurants! Panera bread, Chipotle, and Subway to name a few. The question is now why did someone who loved Big Mac and fries is eating a Burrito at Chipotle? Is this a change in taste or something else? Are customers eating fast food for its speed and taste or is there another key to this puzzle?

The answer is not very difficult to find and customers are choosing Chipotle, Panera Bread etc. because their food is healthier and they source from suppliers who are NOT using artificial chemicals or anti-biotics for their produce (chicken, beef, and pork). This is termed as socially responsible or sustainable sourcing of food materials and the newer generation (the millennial) are really buying this (pun intended).

McDonald's shareholders are not too pleased with what is going on and its CEO suffered a resignation due to major revenue losses. The question is: Is it too late for McDonald's to change its sourcing strategy to sustainable rather than a cost effective/efficient supply chain?

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