BrainTrust Query: Will An Apple a Day Grow Sales?

Discussion
Sep 07, 2011
Jonathan Marek

Through a special arrangement, presented here for discussion is a summary of a current article from Applied Predictive Technologies’ Food For Thought blog.

McDonald’s recently announced that it is going to fill its Happy Meal boxes with apple slices and smaller portions of French fries starting in September as part of a bid to meet the new, rigorous Council of Better Business Bureaus Food Pledge nutrition standards. I see McDonald’s move as both innovative and smart.

McDonald’s estimated that providing apples in every Happy Meal will lead to an estimated 20 percent reduction in calories of the most popular Happy Meals while also reducing fat. It also made new commitments to reducing added sugars, sodium, saturated fat and calories.

Here are five thoughts on why this move makes sense:

McDonald’s can own the healthy-options space in QSR: McDonald’s has already taken many steps to create healthier QSR options (salads, yogurt, McCafe, etc.), and they have proven they can do it while growing their brand and their sales. Putting apples in more Happy Meals represents another step on that path. Competitors are left copying, or trying to create their own space with intentionally-indulgent backlash items, or in some cases perhaps both.

Changing defaults changes behavior: By changing the "default" composition of a Happy Meal, McDonald’s will certainly sell more apple slices, for the same reason "opt-in" and "opt-out" marketing programs have very different penetration rates. Most people will choose what they believe is expected. McDonald’s will then be able to tout that change in behavior.

But the option is still Mom’s: McDonald’s isn’t actually changing what you can get in a Happy Meal. So there’s no reason to complain — you can still get the fries and soda if you want them. Or Mom can say, "That’s just the way the Happy Meal comes now, sweetheart."

PR is great but the bigger prize is sales growth: Some have implied that McDonald’s was "forced" into this move by impending regulation or, at least, that it is more of a PR stunt than a profit-oriented decision. The reality, though, is that this program could improve sales if some parents are willing to make incremental visits (or give in to the kids’ pressure one more time) because they feel better about the health of the meal.

A committed testing approach ensures success: Listen to McDonald’s USA President Jan Fields: "We did one test without fries, and that did not go well at all. We also looked at reducing the number of chicken nuggets to three from four, and that didn’t go well either. Parents bring their kids there as a treat, and fries are important."

So they have clearly tested various options and learned where the balance should be. The same Test & Learn approach can be applied as they roll the program out to learn even more, since they are planning a phased rollout through next spring.

Discussion Questions: Do you agree with the author that McDonald’s has made sound business decisions in with their new Happy Meals plan? Is offering increasingly healthier options a winning long-term strategy for Mickey D’s?

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20 Comments on "BrainTrust Query: Will An Apple a Day Grow Sales?"


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Dr. Stephen Needel
Guest
8 years 10 months ago

They’ve made sound business decisions if their tests show they’ll sell more Happy Meals and the profits are better by cutting fries/adding apples. Offering increasingly healthier options is only a good long-term strategy if it increases their business and their profits.

Let’s be honest – they were forced into this in the same way they were forced to change their oils. McDonald’s is good enough to market it well – their issue is, have they appropriately tested it and does the data support the decision?

Steve Montgomery
Guest
8 years 10 months ago

McDonald’s struck a good balance between meeting customers’ legacy expectations of what constitutes a Happy Meal and the nutritionists’ desires. Based on the research mentioned in the article, it would seem they have found the happy middle point. Their fallback position allows the parents to make the decision to get a Happy Meal with their original format. Sounds to me like they are allowing the customers to “Have it your way.”

Dan Berthiaume
Guest
Dan Berthiaume
8 years 10 months ago

McDonald’s is the option parents use when they are on the road or in a hurry and the kids are hungry. Sales to small kids are based on convenience/necessity for parents more than the nutritional value of the food. I’m not sure this change will have any big effect in either direction on sales.

Liz Crawford
Guest
8 years 10 months ago

In my view, McDonald’s is simply bowing to public pressure. These kinds of changes have been inevitable.

What impact will it have? My prediction is that sales of Happy Meals will decline even as McDonald’s is applauded. Mikey D’s may not lose trips, instead, sales of some of their other menu offerings will increase. Smaller size burgers and regular fries will fill the gap for many kids. Meantime, Happy Meals may become a favorite choice for women who are looking to limit calories.

Marge Laney
Guest
8 years 10 months ago

Parents who frequent McDonald’s with their kids will probably like having the healthier options, but will it increase sales? I don’t think so.

“Have it your way” will only work as long as Johnnie and Jane can’t read the menu board. It’s a rare kid that will choose the lean and nutritionally superior item over tastier items laden with salt, sugar, and fat.

I see this as a ‘forced’ move that will have little effect on attracting parents who have rejected McDonald’s as a healthy food choice.

David Biernbaum
Guest
8 years 10 months ago

Good for McDonald’s with all good intentions to make the Happy Meal healthier. Time will tell if this is indeed a good business decision or not. Some children actually have been raised to enjoy healthy foods, but overwhelming most will demand fries over apples, if given a choice. But I’m glad McDonald’s is giving this a try and I wish them nothing but success for a lot of reasons.

Max Goldberg
Guest
8 years 10 months ago

MCD is doing what it needs to do in an attempt to offer healthier meals, while giving consumers what they want. As the world’s leading QSR, they are in a unique position to steer customers towards a healthier lifestyle. At the same time, if they can make it all right with parents to visit McD, they can increase revenue, as every kids meal brings an additional, adult register ring.

Warren Thayer
Guest
8 years 10 months ago

Incredibly, Liz Crawford said, verbatim, exactly what I was going to say. At one point, I had planned to use a semi-colon instead of a comma, but that’s all. How does this stuff happen?

Ryan Mathews
Guest
8 years 10 months ago

The proof is in the sales — or lack of them. Liz is right, they are yielding to public pressure. But, that said, sometimes a good offense is the best defense.

Camille P. Schuster, PhD.
Guest
8 years 10 months ago

Adding apple slices and continuing to provide a smaller portion of fries is a small step toward a healthier meal. However, it is a step whether or not they were forced to make it. If the sales are good maybe there will be more steps toward providing healthier meals by McDonald’s and other fast food outlets.

Anne Howe
Guest
8 years 10 months ago

I think it’s a good move, and does offer better choices that we need to put in front of our kids and ourselves when it comes to QSR dining. I’m with Liz on ordering a Happy Meal with apples for adults who are limiting calories. McDonald’s has always restricted orders of Happy Meals for adults, so I wonder if they will loosen the restrictions and sell a healthier smaller meal to any adult that chooses to “have it their way” under the golden arches.

Doron Levy
Guest
Doron Levy
8 years 10 months ago

McD’s has been offering the apple option here in Canada for quite some time and the usual protocol with my girls is, one gets fries and one gets apples and they both share. Now offering these choices is great PR considering most authorities blame McD’s for America’s obesity problem. Up north, they have even unveiled a new Select Wrap menu which also positions itself as a healthy alternative. The bottom line is that the core menu items including everything you get along with the apples in a Happy Meal is still awful. It’s like seeing the person who is overweight ordering an upsized double Big Mac combo but gets Diet Coke to ‘control calories and sugar’. What’s the point? Cheap processed food will still always be cheap processed food no matter how you garnish it.

Richard J. George, Ph.D.
Guest
8 years 10 months ago

One of the keys here is the gatekeeper function of today’s moms. Childhood obesity and the related type 2 diabetes issues are front and center for mom’s who I believe will look at the option as a positive thing. I am always reminded that when “taste and nutrition collide, taste wins every time.” Keeping the smaller portion of the fries, allows both taste as well as nutrition to win. I believe McD’s will win as well in terms of PR and sales.

Jack Pansegrau
Guest
Jack Pansegrau
8 years 10 months ago
This is only a very small step for Americans. I realize America and its corporations are ‘all about the bottom line’ but sadly, the USA leads with its waist line in obesity levels worldwide by a large margin — 30.6% vs Mexico in 2nd at 24.2%, way ahead of the Euro/Japan/Korea-Zone [Germany-12.4%, France-9.4%, Japan-3.2%] and a forecast published yesterday sees USA at 50% obesity by 2030. And if we add those that are overweight [an additional 33.2% for a total 63.8%!] The USA is so fat, it’s no wonder our budget will never balance, nor will our scales, lipid screenings, sugar levels and so on. Whether ‘PC’ to say this or not, I for one am sadly disappointed that this is the ‘best’ McDonald’s can do as the leader in the industry that had so much to do with America’s ever-expanding waistlines. This is why there is an oft-told joke among Europeans “Feeling overweight, need to go on a diet? No worries, just take a trip to the US and you’ll feel skinny.” I for… Read more »
Ed Rosenbaum
Guest
8 years 10 months ago

I agree with two previous responses. Yes, this is a sound business decision. But I agree it is done in order to reduce the pressure applied for healthier fast food eating habits. Not being a fast food eater, this will do little to change my eating habits.

Craig Sundstrom
Guest
8 years 10 months ago

We all seem to be on the same page this was “bowing to public pressure,” but less so on whether/not that’s a good thing (and less still on why or why not sales will go up or down) My question: if sales tank, then what? (If not doing this would have been bad PR, reversing direction might be even worse.)

James Tenser
Guest
8 years 10 months ago

It is indeed a sad state of affairs when highly-processed fast foods make up such a large proportion of the American diet that a few apple slices are viewed as some kind of public health breakthrough.

Of course McDonald’s has bowed to pressure here. It would be a much simpler and more profitable world if it could simply continue to turn out the same menu items heedless of market changes. Process complexity is the enemy of any business. Who would have suspected that decent salads or pieces of fruit would be so darned hard to deliver?

John Karolefski
Guest
8 years 10 months ago

Of course, McDonald’s bowed to pressure here. If they had it their way, there would not be any apple slices in the Happy Meal.

Having said that, this move is a good one because it is one step in the direction of smarter eating. Give it up for Mickey D’s. They have taken the high ground. Other QSRs will follow unless Happy Meal sales decline. And if they do, we’ll see how long apple slices replace extra fries in the meal.

Mark Burr
Guest
8 years 10 months ago
This will do very little for McDonald’s either positively or negatively. The only positive outcome is for orchard growers gaining a contract to supply more than 2.5 million apples per year by the nearest estimate I can find. In the short term it could even drive up the price of apples in the supermarket. Nevertheless, there will be smiles on orchard growers faces and grumbling among the potato farmers. McDonald’s still faces concerns and obstacles in many ways beyond just apples in becoming a healthy place to eat or being perceived as that by consumers. It starts with clean restrooms, a clean dining area, a clean beverage service area, and service associates not handling money and food together with their bare hands. I could go on, but I think you get the picture. This is a perception battle they are losing and will continue to lose until perception changes about their total environment. Healthy eating goes way beyond an apple in the bag. It’s a start, but just barely. It’s almost embarrassing, but until McDonald’s… Read more »
Mark Price
Guest
Mark Price
8 years 10 months ago

I will never complain about McDonald’s improving the health of their meals; while people do have free will, the amount of sugar, fat and salt in typical McDonald’s meals do not help America’s health in any way.

The goal of this initiative is to improve McD’s overall perception in the community, and also to increase frequency among Happy Meal heavy users. By making the HM slightly more healthy, McD will seek to reduce guilt among busy Moms and thereby increase frequency of a highly profitable menu item.

In general, reducing cognitive dissonance among highly frequent purchasing customers can be very successful. They are already engaged with the brand, and seeking any outside justification for their behavior. I believe that this initiative will help among the core audience; whether adding apples changes the overall brand perception has yet to be seen.

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