British beef, reduced salt, lower sugar, free range eggs, roast coffee — is thisPity poor Steve Easterbrook. The boss of McDonald’s UK has just presided over the company’s most successful year since it opened its first outlet in Woolwich in 1974, achieving double-digit like-for-like sales growth — but all anybody wants to talk about is the salt content of its fries and child obesity.
When I confess that I avoid taking my children, aged two and four, anywhere near a McDonald’s because of my own perceptions, a pained look crosses his face. Then he delivers a patient and measured response.
"Well, that doesn’t put you in the majority," Mr Easterbrook says. "I’m not going [to say] you’re wrong or anyone else is wrong in not coming. All I can do is offer up information on what we’ve done with the business. Everyone will make their own decision on what suits them and their family and their lifestyle.
"But it’s good-quality food at affordable prices and if that works for families then they’ll keep on coming back. On average, our customers come three times a month. So out of 90 meals a month, three will be at McDonald’s. I’m perfectly comfortable with that fitting in to anyone’s diet."
The changes have gathered pace in the three years since the former Watford Grammar School pupil was promoted to president and chief executive of McDonald’s UK. Such is his confidence, he has launched an advertising campaign based on the provenance and quality of its food.
To some, the bucolic scene in the television ads, featuring an idyllic farm with families working together in a field, comes across as faintly ludicrous. Mr Easterbrook insists that it is a fair representation of how far McDonald’s has come.
"We felt that over the last three or four years, as we’ve continued to broaden the range of food we offer and invested in ingredients, we had established a strength and a credibility. We wanted to run an ad that effectively celebrated our support of British farming and reinforced the quality of the products we use."
He estimates that about 70 per cent of its food is sourced in the UK, including all beef, pork, dairy products and potatoes, and that in some cases the country idyll of the ads is representative of the reality. "For beef, we have 16,000 different farmers and we can buy as few as five to ten head of cattle from some. This isn’t like the feed-lots in the US, where you can see bobbing heads as far as the eye can see."
The group has also upgraded its coffee, investing £6 million in a switch from filter to freshly ground. The beans are all Rainforest Alliance certified. It has also moved to organic British milk and buys 5 per cent of the organic milk market. The results, no doubt also boosted by the move to free wi-fi in its stores, have been impressive. The company sold an extra ten million cups of coffee last year. Other food improvements include a shift to free range eggs. But what about the levels of salt and sugar in its meals, an issue raised so damagingly in Super Size Me, the documentary made by Morgan Spurlock?
Mr Easterbrook says: "We’ve reduced salt by 25 per cent in our fries over the past four years. You’ve got to make small changes. People’s palates can adapt to small changes incrementally, but if you cut something all at once all you do is disenfranchise the customer and they won’t buy it.
"We’ve reduced sugar from our buns and added fibre. We’ve reduced fat in many key ingredients, like Chicken McNuggets where we’ve also moved to only breast meat. It’s all about making continual small changes across the menu. We will continue to change recipes, but not at the expense of taste. There’s no point in preparing food that doesn’t taste good."
The former accountant also responds forcefully to accusations that the fast food behemoth, famous for its Happy Meals, has played a role in the increasing obesity among children, insisting that it is largely a problem with society. He believes that the role of McDonald’s is to give customers sufficient menu options to be able to eat more healthily while acknowledging that many regard a visit as a treat.
"Five or six years ago, a Happy Meal would only include a fizzy drink. Now parents can have water, or organic milk, or orange juice. Half of the drinks we serve with Happy Meals are now non-carbonated."
Mr Easterbrook believes that the new, open strategy is changing perceptions about the company. "Members of the public can become ’quality scouts’ and visit its suppliers and processing plants, or they can post quesions and comments on a website, makeupyourownmind.co.uk. "I have looked to address some of the challenges head-on and be totally open and transparent," he says. "I’m not suggesting we’re perfect, but we can’t allow things to circulate that patently aren’t true and I think it’s the responsbility of management to address that. We’d allowed some of the myths to circulate longer than we should."
Which brings us to the so-called McLibel Trial in the 1990s, between McDonald’s and a former postman and a gardener from London, which became the longest trial in legal history. McDonald’s claimed a partial victory but was criticised by the judge and vilified in the press. "I think I’d handle things differently today," Mr Easterbrook says. "My approach is just to open things up so opinions are based on facts. We will talk to anyone. I don’t think I’d be taking that course of action again, it’s not my style."
It is no coincidence that the sea-change wrought at the business under Mr Easterbrook, who also has responsibility for Northern Europe, has produced 12 consecutive quarters of like-for-like sales growth, as it has attracted two million extra customers every month. He admits that the economic downturn is helping, as consumers seek out value propositions, but he is adamant that it is largely "the culmination of lots of small changes and lots of investments starting to come together".
Mr Easterbrook believes that the group’s determination to keep investing in its restaurants and staff training will give it an advantage over rivals that are forced to cut costs that affect customers’ experience. It has resumed its opening programme, which had halted as sales stalled, and will open 20 restaurants this year as part of a £90 million investment programme. The company runs 1,200 restaurants, of which 60 per cent are franchises.
He said the sales momentum of last year had continued into the first few weeks of 2009, and he appears to be relishing the tough challenge ahead.
"This is a true test of how good we are both as individuals and as a business. The success with which we navigate the next 12 to 18 months could really establish the long-term success of the business, way beyond our time. That is a responsibility I take seriously, but it’s also quite exciting. It’s a challenge that doesn’t come around very often."
They’re lovin’ it
Average customer spend: £4.05
Company turnover: £1.9 billion
461 million customers in 2008 (434 million in 2007)
100 million Big Macs sold in 2008 (92 million in 2007)
69 million coffees sold in 2008 (58.5 million in 2007)
74 million breakfasts in 2008 (67million in 2007)
really McDonalds?
