The world’s largest hamburger chain is keeping close tabs on 14 of its own locations in Texas—the ones experimenting with what could be McDonald’s next big idea.
Imagine: The globe’s most successful burger joint flipping beef patties… only fresh.
Executives at McDonald’s are evaluating the use of fresh beef in the Dallas-Fort Worth area, curious about consumer response and how the idea could be scaled. On the sidelines, Wall Street analysts are salivating, wondering breathlessly if a broad move to fresh beef could be as successful as the chain’s recent push to serve all-day breakfast, which quickly made for a meaningful improvement in sales.
“We don’t know if it will happen, and if it does happen, we don’t know when—nor do we know just how widespread such a move could be (U.S.-wide? Globally?) but we think this has the potential to be a big, big deal,” wrote Nomura analyst Mark Kalinowski in a June 2 report.
Why so big? Consumers have been putting a premium on fresh menu options. That trend, along with increased interest in local and organic choices, ushered Chipotle Mexican Grill into its initial success, and has manifested itself in many other restaurants since.
McDonald’s CEO Steve Easterbrook noted June 1 at the Bernstein Strategic Decisions Conference that expanding fresh beef from 14 restaurants to the nearly 14,000 McDonald’s locations in the US would require tinkering with supply chains and re-outfitting kitchen equipment.
And at the moment, the available supply of fresh beef would not meet demand, Easterbrook said. However, that could be dealt with much the same way the chain announced its switch to cage-free eggs, which is to phase in the change over several years. The other obstacle comes down to a matter of physical space in each restaurant.
“We have got to work out whether we have the chillers or refrigerators with the necessary capacity [to] store that degree of fresh beef,” he said. “And we know the footprint of every restaurant, so we are working through that type of stuff.”
All-day breakfast was a similar story. It began in a handful of McDonald’s locations in the San Diego area before the company figured out how to manage the space constraints that prevented it from adopting the idea more broadly. And that proved well worth the effort.