Waiting in line at the McDonald’s drive-through, just think 90 seconds.
The most you are supposed to wait, 90 seconds is one half of the McDonald’s formula. Always aiming for speed, years ago McDonald’s experimented with un-toasted buns. They also tried to extend the warming cabinet time for pre-made burgers and did some microwave cooking. Although “degradation” was a problem, the speed was sometimes worth it.
The other half of their success story is price. In 2015, demand never surged for the $5.00 sirloin beef burger (with white cheddar cheese and peppercorn sauce). They also could not generate a following for their $4 to $5 Angus beef burgers. More typically, when the double cheeseburger was added to the Dollar Menu in 2003, sales soared.
The Missing Ingredients
In a 2014 Consumer Reports taste survey, McDonald’s was last:
In addition to taste, McDonald’s missing ingredients include sales growth and millennials. Because only one in five millennials has even tried a Big Mac, McDonald’s is now looking at new grinds, cook times and temperatures. Who would have thought that by toasting their buns five seconds longer, their burger is 15 degrees warmer?
Our Bottom Line: Creative Destruction
To grasp what is happening, McDonald’s might look back at Ford’s Model T.
Hugely popular for years, both the Model T and McDonald’s depended on mass production for speedy output and low cost.
The leading auto maker until the 1920s Ford made it possible for the average consumer to own a car. Almost always black, the Model T was not beautiful. And yes, year after year, the new cars looked like the old ones. But they were affordable and consistent. Similarly, depending on an assembly line approach, McDonald’s has had an affordable, consistent product that catered to the masses.
But then General Motors came along with different models and colors that catered to individual taste. And McDonald’s competition does “made-to-order” burgers.
Commenting from his grave, economist Joseph Schumpeter (1883-1950) would remind us what propelled capitalism. Calling the process “creative destruction,” he said that economic growth depends on the entrepreneurs who develop the innovative business ideas that make old industries obsolete.
Like the Model T, perhaps the Big Mac has begun to experience creative destruction.
My sources and more: Telling all you could want to know about McDonald’s Big Mac problems, this WSJ article was excellent.
