Kicking off a new a week in the hamburger business!
We are so excited to start the new season with our producer Chris Higgins and an updated format for the podcast:
- News
- My Hamburger Restaurant
- Case Study Review
We recap and add a little context on each of these sections for you in the newsletter below but then we also have:
- Finance
- A Review of the Chicken Big Mac
- Some Political Reflections
Let’s get into it…
News
As we prepped for recording this episode we were still reeling from the news of E. coli cases related to the Quarter Pounder. The story continued to develop but it was the perfect tie-in to our case study about supply chains.
At the time the CDC was reporting 49 confirmed cases and one death. The investigation was looking at the possible culprit being either the slivered onions or the beef with cases spiking the most in Colorado.
CNN then reported, “McDonald’s supplier Taylor Farms has removed yellow onions from the market ‘out of an abundance of caution.’”
Then on October 24th AP News reported the official word from McDonald’s:
Taylor Farms, of Salinas, California, sent onions to one distribution facility [in Colorado], which led the fast-food chain to remove Quarter Pounder hamburgers from restaurants in several states. McDonald’s didn’t say which facility it was.
The story has continued to develop as we recorded so we created this video timeline using various news reports:
What Does This Mean for the Quarter Pounder?
In a New York Times article economics professor Jay Zagorsky said:
“I don’t see this as really affecting McDonald’s dramatically. And I think Wall Street agrees with me because the stock is only down about 5 percent.”
The Quarter Pounder is a big deal to McDonald’s, and was highlighted as an important brand itself in the 2023 Investor Update event. The NYT article closes with the following endorsement:
After McDonald’s made the switch from frozen to fresh beef, which boosted sales by 30 percent, even a Food & Wine critic was impressed.
“The Quarter Pounder, if you’re asking, was pretty good, in the muted way that Quarter Pounders generally are — a classic, simple thing, with enough heft to make you feel like you’ve had a meal, without having to order fries or guzzle sodas,” David Landsel wrote. “Sometimes, simple is good.”
My Hamburger Restaurant
Probably the biggest change to this season of HBR is that Mike is now working at a hamburger restaurant in southern California. Our producer Chris Higgins interviews Mike about why he chose this and what his first few weeks have been like.
Mike compares his memory of working at a hamburger restaurant now and when he worked part-time at McDonald’s back in high school. He has developed a fan-theory that the world of Star Trek is actually the result of McDonald’s being the last global organization after an apocalyptic event that destroyed capitalism. But we’ll save the details of that theory for another time.
Case Study
Our case study today is all about sustainability and supply chains, but obviously food safety was very much on our minds as we analyzed it.
You can pick up a copy of McDonald’s Corp.: Managing a Sustainable Supply Chain by Ray A. Goldberg and Jessica Droste Yagan at the Harvard Business Review store for $11.95. Both Zach and Mike agree that this is one of the best case studies they have ever read.
The case study is a Shakespearean story of two warring brands — McDonald’s and Greenpeace — and how they came together to fight the clearcutting of the Amazon rainforest. While the focus of the piece is on McDonald’s and its willingness to work with Greenpeace, we were far more fascinated by the complexity of the supply chain logistics required to run a global operation like McDonald’s.
Greenpeace was able to use people dressed in chicken suits to elucidate every otherwise invisible connection that makes up the supply chain — how the chicken in McNuggets is fed soy that is grown on farms that are built on the recently deforested tracts of land within the fragile ecosystem of the Amazon.
Next Up: McDonald’s China: The Expired Meat Scandal
That’s the first episode of the second season! We have more information to share below, and stay tuned for the next episode where we are planning to look at the The University of Hong Kong’s case study McDonald’s China: The Expired Meat Scandal.
If you enjoy Hamburger Business Review you can support us by subscribing, buying merch, or even just buying us a burger.
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Finance
Even before the E. coli outbreak that caused the share price to drop we had CEO Chris Kempczinski say in early October that he expects 2025 to be “another challenging year.” This was in reference to the rising costs of providing so much beef to customers.
Kempczinski said on Thursday that McDonald’s will aim to offer more affordable meals by including chicken-based items on the menu since poultry is more than half the cost of beef on a per-pound basis.
Which explains the launch of the Chicken Big Mac from an economic point of view.
This shift in the focus on protein and the concerns about 2025 being difficult have been largely overshadowed by all the political shenanigans as well as the recent E. coli outbreak which has had a major impact on the share price.
Should Hamburger Business Review Do Food Reviews?
We are a business podcast, but as my mom says, everyone’s gotta eat. In the burger business, new products are a great marketing strategy. But is the new take on an old favorite really any better? Can it move the needle?
And the real question is, should HBR do food reviews? Do you care what we think about the Chicken Big Mac? Should we compare smash burgers across LA? What about blind taste tests of French fries? We’re no Doughboys, but if you’d like our take on “product”, let us know:
Response to October Surprise
Mike was surprised the response to the T@McD event at his hamburger restaurant was… nothing. No one said a word about it. Of course the online discussions in the of McD employees had a lot to say. Here are some highlights from Reddit:
“I’d like to see him running headset while running fryers and making multiple mcfrappes at once, during a rush.. I doubt he figured out how to use the cash registers..”
“w/Trump there is always a certain irony, a playfulness, where he knows you are in on the joke and you’re both having fun. You both know who he is, who he is pretending to be, and it’s not at all malicious.”
“This is cosplay and insulting to people who have actually worked any amount of time in their lives.”
And one of our favorite hamburger writers, Marcia Chatelain, author of the incredible Franchise book, wrote a great NYT Opinion piece and was on CNNdiscussing how political theatrics block political change.
In the grand scheme of everything that is lining up to happen for the next four years this event might seem small. But we believe it remains the second most iconic image of the campaign and it highlights our theory about how McDonald’s touches everything.