Happy meals: Why McDonald's has been a positive force for change
Thursday 13 May 2010
The great philosopher John Travolta once observed that, in France, a Quarter Pounder with Cheese is known as a "Royale with Cheese", while they call a Big Mac "Le Big Mac" and allow you to wash it down with beer. That's the "funniest thing" about Europe, he concluded, during the often quoted opening scene of Pulp Fiction: its people have embraced American culture without entirely losing their soul. "A lot of the same shit we got here, they got there. But there, they're just a little bit different."
Another thinker, Thomas Friedman, has also used McDonald's to riff about globalisation. In his bestselling book The Lexus and the Olive Tree, Friedman famously ventured that: "No two countries that both had a McDonald's had fought a war against each other since each got its McDonald's." Once a nation dines under the golden arches, he argued, it buys into freedom, democracy, and the American way. Children who grow up eating Happy Meals would rather spend their lives scoffing mass-produced burgers than making war.
On Saturday, the golden arches that provided Friedman, Travolta and legions of other modern opinion-formers with food for thought will reach an important milestone: their 70th birthday. On 15 May 1940, two brothers, Richard and Maurice (Dick and Mac) McDonald, opened their first restaurant, in San Bernadino – an unlovely city fringed by mountains, an hour's drive east of Los Angeles. Today more than 32,000 outlets in 117 countries bear their name. Three new ones open each day. China has over a thousand. The company that dreamt up "Le Big Mac" has managed, in the span of a single human lifetime, to devour the world.
Somewhere along the way, of course, McDonald's picked up quite an image problem. In fact, the ever expanding burger brand became a byword for Yankee imperialism. Critics accused the firm of exporting factory farming and obesity to an unwitting world; books such as Eric Schlosser's Fast Food Nation (2001) and films such as Super Size Me (2004) raised public scepticism about where junk food comes from and what it does to you. It became an unfeeling corporate villain, giving us McLibel, along with one of society's creepiest clowns, and seemed to be sending humankind the way of those lard-arsed caricatures in the film WALL-E.
Yet despite the PR difficulties, McDonald's kept on expanding (much like the world's waistbands) and in the past couple of years it has entered a sort of golden era. The other day, its shares touched an all-time high of $74, up from $12 in 2003. Across the world, its sales are sky-rocketing. The UK, where its brand was widely considered dead and buried in 2005 – with sales that had been flat for five years, and profits that had just collapsed by two thirds – is now the most successful foreign market in the US firm's history, with sales up £450m in 2009. This trend lays bare a long-standing fact: it's easy to knock McDonald's and everything it stands for, but when you hold your nose and peel back the greaseproof paper a surprisingly progressive institution sometimes emerges.
In the UK, for example, the firm puts its recent financial success down to a £95m "re-branding" exercise to reinvent itself as a touchy-feely retailer, where customers can now use free wi-fi , drink rainforest-friendly coffee with organic milk, and eat free-range eggs. Many of its 1,200 British restaurants are now painted green. In the US, meanwhile, recent years have seen a different kind of McMakeover. Here, your average suburban drive-thru now pays lip service to the very un-American concept of sensible eating, selling a vast range of vegetable wraps, salads, yoghurt, bottled water and fruit along with the usual salty fries and lardy burgers. In a departure from tradition, some of these supposedly healthy new meals even require customers to be able to handle a plastic knife and fork. Today, its biggest growth area is not beef patties or chicken nuggets, but gourmet coffee.
Again it worked. Sales last year grew, in the US, by just under 5 per cent. In a recession where eating out has declined, McDonald's has both stolen market share and safeguarded its image for years to come. In public, the firm trumpets its interest in issues like animal rights, and recycling, and obesity. It also banned GM spuds, and after the campaigning group PETA started moaning about its suppliers' slaughterhouses it brought in animal rights advocate Temple Grandin to make them more humane. Some of their noisiest critics will admit to being grudgingly impressed.
"They've become extremely good at reading where the public is on different issues," says Michael Pollan, the green activist behind the film Food, Inc, and author of The Omnivore's Dilemma. "They'll move just enough to appear progressive, but not so much that it actually costs them too much money. A couple of years ago, for example, they stopped using battery chickens, and crates for pork. They also got rid of those nasty Styrofoam cups. Once they change, they're so big that it alters the landscape of the entire supply chain. That's the plus side, I suppose, of having an over-concentrated, monopolistic food industry." Pollan, who has stood in the toxic fields where the potatoes for McDonald's French fries are sprayed with pesticides, and watched their cows being marched to the abbatoir, isn't going to be scoffing up McNuggets any time soon. But progress is progress. Meanwhile Jamie Oliver, the high priest of healthy-eating campaigners, announced last month that the firm had (in the UK at least) improved its "ethics and recycling" to a degree that "puts quite a lot of gastro-pubs to shame". Its recent financial success, he said, in a news-paper interview, is "proving that being commercial and caring can work. Actually, it's the future."
Should this sudden modishness be a surprise? Actually, no: explore the 70-year trajectory of McDonald's, and you'll realise that it has always had an uncanny knack of staying ahead of the game. From its very earliest days, the firm's achievements have been built on the most basic principle of successful capitalism: that you must shift, like the wind, when the market tells you to (even if that means taking a short-term financial hit). Over the years, while other fast-food empires have waxed and waned, it has stubbornly endured.
When Dick and Mac they opened that first restaurant on the old Route 66 they didn't have any delusions of grandeur. They were just a couple of entrepreneurs who thought they could make a living from a "barbecue pit", using a platoon of waiters to serve motorists who sat in parked cars. It was, at the time, no different from hundreds of other "drive-in" joints springing up in southern California's rapidly sprawling suburbia. Food historians are divided about who invented the hamburger. Some credit the Tartars, an Asian tribe which became part of the Mongol empire under Genghis Khan, with the first version: warriors were said to soften uncooked steak under the saddles of their horses by day, before eating it raw (hence "steak tartare") at night. Others say it was created by residents of Hamburg, beef capital of 19th-century Europe, to get rid of unlovely cuts of meat with the help of newly invented mincing machines.
All we know for sure, though, is that by the start of the 20th century, burgers had become America's staple snack. Pavement vendors who had recently arrived from Europe began selling them from their street carts as a more satisfying alternative to the hot dog. In the absence of plates, the grilled patties were stuck between slices of bread. On the East Coast, that was your hamburger. In California, punters occasionally added a slice cheese and the odd bit of lettuce before eating it.
In the interwar decades, the burger became institutionalised. The growth of railroads and motor transport led to the emergence of several "chain" restaurants that specialised in serving travellers visiting strange towns, who wanted familiar food in familiar surroundings. A brand's big selling point was reliability: an outlet's name that you'd heard of inspired trust, and stopped you worrying about food poisoning when you ate there. The most prominent chain, founded in 1921, was called White Castle – a name designed to reflect the supposed purity of its product.
The McDonald brothers did not invent the idea of the restaurant chain, then. Neither, contrary to popular belief, did they come up with "fast food" – the concept by which meals are assembled using relatively unskilled and interchangeable staff on a Henry-Ford-style production line. That was also the work of White Castle, which had run its kitchens along such lines since the mid-Twenties. Instead, Dick and Mac simply copied their rival's big idea, improving on it where they saw fit.
To that end, 1948 saw the brothers make perhaps the most seismic business decision in the history of modern eating. They closed the barbecue pit, sacked most of their workers, and opened a new McDonald's. The kitchen was remodelled along White Castle lines, with innovations like specially designed burger flippers, capable of turning four patties at once, and ketchup squeezers that applied completely uniform dollops of sauce to dozens of burger buns at a time. They decided to sell only burgers, quickly and very cheaply.
They succeeded in turning the kitchen into a perfectly oiled machine, where meals could be assembled at a pace by a handful of untrained cooks. Overheads were minimal. Its selling point was ruthless, factory-like efficiency: each customer ordered at a counter (rather than via waiters), and would be served within 50 seconds. Dick and Mac called their new way of doing business the "speedy-service system", and it was one of the most profitable means of food production that restaurants had ever seen. Within years, they were wealthy men.
"It's a common misconception that the McDonald brothers invented the idea of applying Henry Ford's principles to food," says Andrew F Smith, author of Hamburger: A Global History. "But they did perfect it. They mapped out the kitchen so that they knew, for example, exactly how many steps it took to get from the stove to the counter and back. They refined everything, and mechanised anything that would make the system work faster."
If you study McDonald's, as food historians often do, this story is part of a very similar pattern which emerges throughout its history. The firm has never been run by inspired inventors. Its people seldom come up with completely new ideas. Instead, it devotes itself to being a sort of commercial magpie: pinching other people's brilliant innovations, improving them, and cashing in. Even the company's name is a mildly misleading: for much of its extraordinary rise, the firm does not have Dick and Mac to thank. The man behind the legend was instead a canny Chicago businessman called Ray Kroc.
Kroc first came across McDonald's during a trip to California selling milk shake mixing machines in 1954. Intrigued by their steadily growing business, he convinced them to go into partnership with him and swiftly opened up an outlet in Des Plaines, Illinois, where he was a franchisee. By 1959, he'd helped the company expand to 100 locations. Two years later, he bought the entire firm, for $2.7m. By the time Kroc died, in 1984, it was the biggest restaurant company in the world.
Though he believed deeply in McDonald's and all it stood for (and had a statue of himself put in every new branch), Kroc also had a keen sense of his own limitations. So he constantly pinched good ideas from rivals. When Burger King began offering indoor dining, Kroc swiftly followed suit. When In and Out began making a success of microphone-operated drive-thru, he decided to follow (today, "drive-thru" accounts for half of all the firm's sales). The Big Mac, introduced in 1967, was also a "borrowed" idea: it had been inspired by a rival sandwich, the Whopper.
Kroc's initial mantra, when building the firm, was uniformity: he wanted every dining experience, in every US branch, to be more or less the same. New franchisees had to sign 250-page contracts which stipulated in extraordinary detail exactly how they would run their businesses (in the UK today, opening up a new franchise costs between £100m and £300m, and needs a 20-year commitment to the firm). Kroc's burgers became a perfect symbol of postwar orderliness: so neat, so self-contained in their little individual boxes; so reliable.
He also had a commendably intolerant attitude towards corporate baloney, which persists to this day. Where other companies pack their boardrooms with high falutin' Harvard MBAs (the kind who've virtually bankrupted the world's economy), McDonald's is still largely run by men who worked their way up from the shopfloor. Kroc's successor, as CEO and then chairman, was Fred Turner, who'd operated the grill in his first restaurant. Today, 20 of its 50 top managers, including current CEO Jim Skinner, have flipped burgers. One in eight Americans have at some stage in their life worked for the firm, so it has a vast talent pool to draw from.
While McDonald's is often accused of exporting plastic US mundanity, the firm actually realised, when it came to venturing overseas, that imposing a completely star-spangled business model on Johnny Foreigner wouldn't work. When it went international (by way of Canada in 1967, and the UK in 1974) it made a counterintuitive decision: in each new market, it let the locals adapt its concept, tweaking it and adding new menu items to suit its particular clients.
"When we go in somewhere, we want operations in the hands of local people," says Walt Riker, the firm's vice-president of corporate communications. "A French person is going to understand that market far better than a pack of Americans. Today, we have 1,000 outlets in France, and we make a point of one thing: that every single item they sell is made by French farmers. In France, with their food culture, that's what customers have told us is a priority."
Each of the 117 countries with a McDonald's is allowed to take the concept where it sees fit. In the Middle East, they sell kebabs alongside Big Macs and ban pork. In India, beef is verboten. Milk shakes aren't on the menu in Israel, since kosher law prevents dairy being prepared in the same kitchen as meat. And France, with its patriotic fervour, metric weight system, and instinctive mistrust of Americanism, makes sure its quarter-pounder "Royale with Cheese" is made from French beef.
While Friedman's cute anti-war thesis no longer quite works (Russia saw to that by invading Georgia's South Ossetia region in 2008), this adaptability surely demonstrates how McDonald's represents some of the best of global capitalism, as well as the worst.
True, they may never find a way to stop customers getting fat. Neither, in all likelihood, will the firm find a way to sell 60m burgers a day without killing lots of mass-produced animals. But if their last 70 years have taught us anything, it's that if there does happen to be a solution to the fast-food industry's problems out there, McDonald's will probably be the ones to take credit for finding it.
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