Photo by Marcus Ganahl on Unsplash
What If McDonald’s Became More Upscale?
McDonald’s is set to make more than 50 changes to its burgers this year, and since the company seems to be evolving its brand’s language, it might be time to consider a more enhanced image to its name.
For starters, the brand is boosting its burger game. It announced changes to its burger preparation, promising softer buns, perfectly melted cheese, and enhanced flavors from onions cooked with the patties. The Big Mac is seeing an increase in its tangy Mac sauce as well.
Celebrity collaborations also made a comeback last year, and the company continued its tradition of limited-edition launches. New sauces were introduced, popular sandwiches were upgraded, and fan-favorite items made a comeback. Although McDonald’s has done well with these changes so far, the fast-food chain might be poised for even more virility and profit if upgraded with an element of luxury.
Also, if you’ve ever noticed that Coca-Cola tastes better at McDonald’s, you’re actually correct. There’s a science behind those superior sips, and McDonald’s goes to great lengths to ensure its Coke is top-notch. It all starts with meticulous cleaning of the soda fountains using filtered water. Next is the extra step of pre-chilling the filtered water and the Coca-Cola syrup before it hits the fountain dispensers. This ensures a perfect balance of syrup and frozen water when ice is added to your drink. Maintaining cold temperatures is critical to preserving the soda’s carbonation. High carbon dioxide levels are easier to maintain in colder conditions, thereby keeping the soda fizzy for longer.
Furthermore, McDonald’s gets its Coca-Cola syrup delivered in stainless steel tanks, which helps keep the syrup fresh and safeguards it from changes in temperature and air exposure, both of which could alter the flavor. Most other restaurants receive their Coke syrup in plastic bags, a method that doesn’t protect the syrup flavor as effectively as steel tanks. McDonald’s enjoys this luxury of using stainless steel tanks thanks to a special partnership between Ray Kroc, the man behind the golden arches, and Coca-Cola, established as far back as 1955.
Last but not least, the size of the straw also contributes to the enhanced Coke experience at McDonald’s. The straws used by McDonald’s are slightly wider than typical ones, allowing more Coke flavor to reach your taste buds. If this restaurant is only perceived as a cheap fast-food option, why go through all this trouble? Why not find a way to sell Coca-Cola at a higher premium instead?
Another interesting case in point is the idea of a more “upscale” and luxurious McDonald’s restaurant.
Back in 2015, McDonald’s Japan tried a fine dining experiment titled “Restaurant M.” Aimed at celebrating its new “Fresh Mac” summer menu, the usual quick bites associated with McDonald’s turned into a gourmet extravaganza in the Roppongi Hills branch in Tokyo.
The restaurant rolled out a white tablecloth and fancy tableware and opened its doors to 20 lucky individuals chosen from a pool of over 8,300 applicants. McDonald’s teamed up with renowned chef Masayo Waki, who gave a new edge to the menu. The five-course meal unveiled a unique range of dishes, including a Vichyssoise McFry Potato, several kinds of patty pincho, and a salad encapsulated in gelatin. For mains, customers had a choice between the Fresh Mac bacon lettuce burger, Fresh Mac Chicken Filet-O, and the Fresh Mac Filet-O-Fish. The meal ended on a sweet note with a Mixed Berry McFlurry, followed by McDonald’s Premium Roast Coffee.
McDonald’s Australia first pioneered this kind of fine-dining concept in 2013 in eight outlets in the Illawarra region. Customers ordering a Grand Angus, Big Mac, or chicken deluxe meal had the option of having it served on a plate with cutlery. In the same year, McDonald’s hosted a gourmet dinner in New York City where renowned chefs used basic McDonald’s ingredients to create extravagant dishes.
Currently, McDonald’s has several unique and luxurious locations worldwide, such as the 1795 Mansion in New York and a Greek Revival-style house in Freeport, Maine. In Melbourne, Australia, there’s an art deco McDonald’s that was once known as the United Kingdom Hotel. In Rome, Italy, there’s a McDonald’s located by the Spanish Steps, filled with marble and mosaic accents. Orlando, Florida, is home to one of the world’s largest and most entertaining McDonald’s outlets, while a quaint McDonald’s in Yangshuo, China, offers magnificent views of karst peaks and a historic 19th-century town hall in Bray, Ireland, houses a unique McDonald’s branch.
Additionally, a different approach to this fast-food chain arrived in Hong Kong in 2016 called McDonald’s Next, which is an “evolved version of the brand that strives to be ‘modern and progressive,’” according to CNN. Some people refer to it as the world’s fanciest McDonald’s in the world due to its elevated interior design and healthy, gourmet menu.
Although making McDonald’s an entirely luxurious chain of restaurants would go against the very fundamentals of the company, it might do well to have a balance that offers the best of both worlds, upscale and cheap, going against the notion of these factors being mutually exclusive.
Discussion Questions
How would the introduction of premium elements impact the brand image and customer perception of a traditionally low-cost, fast-food chain like McDonald’s?
Considering the meticulous process McDonald’s employs to serve the perfect Coca-Cola, what could be the implications and potential profits of offering this as a premium beverage, and is there a precedence for such a strategy in the beverage sector?
In the context of McDonald’s attempting upscale experiments and unique restaurant locations, how feasible is it for a large-scale fast-food chain to sustainably and successfully operate in such a dualistic model, offering both upscale dining experiences and low-cost fast food? Would this not confuse or dilute its brand identity?
Poll
Loading …BrainTrust
Allison McCabe
Director Retail Technology, enVista
John Karolefski
Editor-in-Chief, CPGmatters
McDonald’s does not need to change its general market position and it would be a mistake to do so. The bulk of McDonald’s business comes from people who want fast-food options at reasonable prices. They do not want a premium experience and, if they did, they have many other options to satisfy those needs. Of course, being great value does not mean low quality, which is why McDonald’s invests a lot in ensuring that it optimizes processes and ingredients. Neither does this preclude adding occasional premium menu items where it is appropriate to do so. Of course, one-off premium pop-up concepts and the development of an entirely new premium concept are different and both are things McDonald’s can explore.
I spent a few hours walking NRF’s Foodservice Innovation Zone; first with a Grocery Retailer interested in “new ideas for their in-store (food) production” and then with a few ex-QSR execs looking to see “how far their industry has come and can still go”. The experience was underwhelming for both parties; they quickly turned cynical about the AI-hype, and almost tuned it out. There was discussion during these tours about experiments both with tech, but also with changing the core proposition.
Lessons learned from those visits:
QSR saw its essential status during COVID change into ingestion of tech advancements in 2 years that otherwise would have taken the better part of a decade. McDs can experiment all they want with the higher brand – it works in some parts of the world (I have a dining experience in my local McDs back in Greece), and perhaps in some parts of the US. But they still need to get order accuracy, quality, and speed right at the core set of stores. It’s still about improving the tech around the MUT (make-up table), yet we seem to be focused on the drive-thru, pick-up and dining when we can’t the orders straight.
Maybe inadverdantly, but Dennis likely provided the answer to his own question: a search for the photo – it’s in Lugano, Switzerland – turned up this caption “Lovely McDonald’s exterior. Service inside horrid.” Would this not confuse or dilute its brand identity > Certainly yes to the first question (sufficiently so that I won’t bother with the second).
With over 90% of McDonald’s locations run by franchisees, the big question is, How do franchisees feel about it? The food choices, quality, service levels as shown are all very interesting, even compelling. However, the cost of goods and delivery for this offering is dramatically higher than their traditional model. Getting consistent compliance at scale would be very difficult, if not impossible to achieve with a franchise model. If the intention is to operate multiple offerings to co-exist as they have with the experimental locations, then this is worth pursuing. However, for it to meaningful to McDonald’s shareholders, it needs to scale. With over 39,000 locations world-wide this will be a challenge.
There is certainly space for McDonalds to explore an alternate or upscale format while leaving it’s classic heritage intact.
In my opinion, McDonald’s has not pushed hard enough on an alternate format. They are still stuck on their core menu but in a fancy place. Their expertise is burgers and fries. They should look at this unconstrained and then pair down to a truly unique, unexpected, experience that inspires trial beyond their normal customer base.
For now, it seems like they have been conservative with the target audience for Restaurant M: push harder. Foodies love nothing more than rare, exclusive and unique experiences. With more unconstrained creativity they could be on to something.
Obviously, this is not a concept for scale but it could open up new revenue streams from new consumers in new markets. It could also provide real-life, real-time labs with customer feedback on new concepts.
Ultimately, branding will be key as there is no value is compromising their heritage to pursue this; so there would need to be a clear delineation of brands, purpose and consumers. With that, upscale or alternate formate could be a worthy venture.
Never change a winning game. McDonald’s has been a great hamburger franchise for decades. However, there is something that should be said to reflect changing tastes. For many locations, because McDonald’s is a global brand, it is adapt or perish, so that local McDonald’s reflect the wants and needs of their clients, on an international scale. Upscaling might be appropriate for this in certain locations.
Did McDonald’s learn nothing from New Coke? If it ain’t broke, don’t fix it.
I am all for new food offerings and nicer spaces to enjoy your meal, but tweaking the Big Mac? That’s blasphemy.
I agree entirely. The fundamental propostion of McDonald’s is just fine. We do not have to “fancify” everything. What next? A Balenciaga department at Ross Dress for Less?
Disaster! You can’t even get the shopping carts out of the door. LOL
Those Ross carts are a retail classic! The poles are so long I think they can pick up signals from outer space…
My semi annual McDonald’s experience is the same order at a pick up price from a drive through anywhere in the country. Always know what I’m getting for the extremely convenient guilty pleasure which includes a Coke. If McD’s wants to provide an alternate experience, that’s up to them, along with the marketing to attract a customer for the journey. R&D is always a good thing, but don’t forget the longstanding customer.
About 70 million hungry people visit McDs daily in the U.S. Surely, it is not because they serve great burgers.
Before a company changes what it is, it should know why 70 million people visit despite mediocre offerings.
While this discussion is interesting & the noted product enhancements are attractive, care needs to be exercised in positioning the brand. For example, better coffee has realized strong market acceptance, however, it’s not a formula for complete brand repositioning.
I’m always reminded of the directive, “You make it with class or make it for the mass, but you can’t do both.”
As I read this article, before Coke, was mentioned, I was thinking, “is this going to be like the New Coke?” I love upgrading the experience and introducing new offerings, but be careful when you play with legacy successes.”
It’s interesting that McDonald’s is branching out into upscale offerings without looking at the accessibility of its existing offerings. Case in point: McDonalds fries use dairy and McDonalds is one of the last holdouts not to offer a veggie burger.
Three-fifths of U.S. households follow a plant based diet at least some of the time (https://vegnews.com/vegan-news/top-performing-diets-for-2024-report). As next gens continue to gravitate towards a plant based lifestyle, McDonalds continued reluctance to provide veggie offerings stands out.
I immediately thought about the halo effect that Target has accumulated over the years from its many collaborations with upscale brands. And then I thought about how many decades it has been since I last ate a Big Mac. It’s been several. And would some new and improved Big Mac peel me away from Five Guys at this point? Highly doubtful. But absolutely McDonalds should be testing and evolving with the market. Target’s collaborations didn’t really change their core DNA of being the new moderate department store. But they definitely made Target a more interesting store to shop. Big Macs and Quarter Pounders have a lot of upside available for an enhanced burger experience. Bravo to McDonald’s for pushing the envelope a little.
The nice thing about having a well-known, well-established Brand is that your customers know what to expect. If you wander too far from that expectation, you end up with confused customers. That’s why Brand extensions can be so difficult. If McD’s starts to infuse a “high price/premium” aspect they risk losing their core customer. How about that $16 inflation burger story?
What if you could also purchase a brand new Kia at a Mercedes Benz dealership? Good luck to them, but I do not see it. Stick to what made you great in the first place, and make sure you are consistently operating at that level.
Although I have not dined in an upscale McDonalds, I must say, my expectations would not be very high. As others have mentioned, customers don’t go to McDonalds to be wowed by the ambience or impressed by the menu, they visit for consistency, affordability (but that equation has certainly shifted in recent years), and speed.
Now, could McDonalds branch out from their standard fare and offer something unique in certain cities (as they have experimented in several locations)? Yes. But I would not tie it to the McDonalds’ branding nor fast-food personality. Imagine a restaurant called “Golden Arches” that offers a more opulent environment and upscale menu. I would visit that format as long as they are not serving Big Macs on ceramic plates.
McDonald’s customers appreciate their consistency of execution. When you eat at McDonald’s, almost anywhere in the world, you get exactly what you expect every time. When they innovate- McRib, McFlurries, etc.- they do so in a way that’s consistent with their value proposition- fast, convenient, and acceptable meals. They don’t have to be great; they just have to be good enough.
That said, the brand is strong enough that there is room to experiment and take some risks. I like this idea because it’s extending McDonald’s offer, taking a measured risk and still staying in the lines of the core product. I hope it works.
Disclaimer- I’m a big fan, I believe I have enough reward points on the McDonald’s app for my own franchise.
It is already good to experiment and given differences in international market positioning, I don’t see an issue McDonalds trying different segments given the brand perception is different. Let’s not forget in Japan KFC is a Xmas staple as “american traditional” and no one in America has heard of it 😉
McDonald’s in Japan is exactly what I want of them in the States – quick, convenient, clean, intentionally trying promotional tweaks to the menu every month but executing perfectly on the core menu every time. An upscale McD’s in the US runs smack into Culver’s, and if my bill is $20 I’m picking Culver’s because the choices & flavor are far beyond the McD’s capabilities.
McDonald’s, the brand, is so ingrained in the public consciousness. An upscale McDonald’s would take away from that brand identity, which customers either love or dislike. People who love fast-food low-price McDonald’s would not want to pay more for an upscale version. People who dislike the well-known McDonad’s would definitely not try upscale McDonald’s.
I think it will be very difficult for fast food chains to reposition themselves as upscale. It didn’t work for Taco Bell. By being even more absurd, they have introduced Doritos Locos Tacos, which have proven even more successful. Established companies have a hard time pivoting in this manner. The best way for Taco Bell to succeed is to be itself, not to try to be Chipotle.
McDonald’s probably has the best chance of pulling it off. No other company in the world has tweaked its business so much to fit dozens of local markets around the world. The McDonald’s brand has plenty of experience finding markets where burgers and fries alone won’t make a great business and developing appropriate menu items.
It’s certainly possible for the company to adapt if the United States is in some sense becoming a “foreign” market where the company can’t compete with burgers and fries. -Db
The concept of an upscale McDonald’s raises intriguing questions about the evolution of fast food and consumer expectations. While it’s easy to dismiss the idea as contradictory, it also reflects broader trends in the industry. As consumers increasingly seek elevated dining experiences, it’s natural for fast food chains to explore ways to meet these demands. However, one wonders about the authenticity of such endeavors and whether they truly align with the core values of these brands. Are upscale McDonald’s outlets simply a reflection of changing consumer tastes, or do they signify a deeper shift in our relationship with food and dining? It’s a conversation worth having as we navigate the intersection of convenience, quality, and culinary culture.
I agree with the comments, only McD ought to improve and upscale the seats and tables and whole eating area. I see most customers use the drive thru. Maybe they would go inside if the store was actually nice and comfy, instead of hard dull plastic. I dont consider it a real restaurant. It’s a store.