Revealed: How McDonald’s got just a little bit fancy

The head of marketing consultancy Growth Mantra has revealed how McDonald’s revamped its menu as part of a bid to return to growth – but rejected one of the country’s fastest growing food categories when it said “no” to noodles.

create-your-tasteSimon Corah, founder and CEO at Growth Mantra, was speaking that the Mumbrella Finance Summit in Sydney and said the fast food giant had adopted a “left brain, right brain” approach to investigating how it needed to evolve its offer.

“The left brain and right brain play really important roles at different times,” Corah said.

“McDonald’s came and asked me a simple question: ‘what should we be selling for growth?’,” Corah said.

“We said we will take you through a process. But you never start a process knowing the answer. All you know is you’ve got faith in the process.”

Corah said the process involved using the sensible analytical left braid to delve into the data,  then brought in the right brain to develop a creative solution based on the findings of the data.

Simon Corah says a left brain/right brain approach led to McDonald's gourmet burgers.

Simon Corah says a left brain/right brain approach led to McDonald’s gourmet burgers

“If we look at the big trends in food and the big trends in food service and fast food and who is winning in fast food around the world, what is it that they’re doing that McDonald’s is not doing that they should be doing,” he said.

Looking for growth opportunities, the data revealed noodles were the fastest growing food sector in the country, but McDonald’s strength still resided in burgers and there was a growth opportunity at the gourmet end of the market.

The key factors were fresh ingredients, personalisation, involvement, a great experience, healthy, nutritious and still offering value.

“If you are a fast food chain and you are in the burger business it’s very difficult to do a lot of those and that’s a challenge for fast food generally.

“If all you are ending up giving is value and none of these things you are in a challenged world because the consumer is becoming so fussy about what we eat and the things that matter to us in food.”

McDonald’s looked at five sets of data including its own data, point of sale data, Crest data, ABC data and merged them together to paint a picture of where things were heading.

Eleven beat out

It also looked who was driving the market by life stage and the ‘informal eating out’ market of well off people who are time poor – a segment in which Australia leads the world.

The IEO is $41b with Corah saying Growth Mantra modelling will see it grow to $46b by 2023.

He said the IEO market was filling a gap between traditional restaurants and fast food, creating an entirely new sector, driven by the growth in seniors and the continued importance of families.

“It just shows there are big movements in terms of the profiles of our communities and its importance on things like food consumption.

“Noodles is booming, 30% per annum,” he said.

He said McDonald’s was open to moving into noodles if that is what the data said it needed to do.

However, having come to the conclusion that rather than branch into a new area such as noodles, the chain focused on its strength, then looked at the growth of chains offering bigger, messier, made to order burgers.mcdonald's rio olympics

He warned that the dessert sector was under pressure, while pies had winter resurgence and Pizza was too competitive to consider.

“For each of the categories in gourmet burgers we looked at who in the world was growing fastest and was the most innovative – I didn’t care whether is was on individual store or a chain.

Brands that were investigated included Smashburger, Grill’d, Burger Fuel, Honest, Gourmet Burger Kitchen and Umami Burger.

“The left brain guys just went in and worked out how to make money – what margins are they making?”

The right brain workers then moved using the in data which had been gathered to support the proposition of launching gourmet burgers designed to attract consumers back.

The result was the launch of the “little bit fancy” line followed by the ‘Create Your Taste’ menu where customer use digital kiosks to create their own burger combinations.

Sales have risen 9.9%, year-on-year, in 2016 and McDonald’s has found a new line of success.

“It was absolutely the polar opposite of the traditional McDonald’s burger,” he said.


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