Smith Brain Trust / April 16, 2019

How McDonald's and Burger King Will Change How We Eat

And why everyone will 'essentially have to follow'

How McDonald's and Burger King Will Change How We Eat

SMITH BRAIN TRUST  Burger King already is testing its meatless “Impossible Whopper,” and if all goes well, it could roll out the vegetarian, environmental patties at its 7,200 locations nationwide. Meanwhile, McDonald’s is working to rid its global beef supply of antibiotics in a separate, but equally audacious move.

In both cases, these giants of fast-food are responding to the changing concerns and palates of the consumer, particularly the millennial consumer.

These aren’t simple modifications to make. They are massive undertakings for the companies’ supply chains, says Maryland Smith’s Suresh Acharya.

For McDonald’s, which doesn’t raise its own animals, the move has been years in the making. In 2017, the chain updated its Global Vision for Antibiotic Stewardship in Food Animals, promising to “preserve antibiotic effectiveness in the future through ethical practices today.” A year later, it pulled antibiotic-fed chicken from its menu. Now, its focus is beef, says Acharya, professor of the practice at the University of Maryland’s Robert H. Smith School of Business. And it may prove more complicated, he says.

Burger King’s move also takes aim at the problems of antibiotic resistance. And it could also fight global warming by reducing the number of methane-producing cattle that are bred for carnivores.

BK is adding the Impossible Whopper to its menu as the Impossible brand’s fake meat is beginning to grow in popularity. The mock-meat doesn’t crumble like most vegetarian discs. It’s moist and “bleeds” like real meat. And without all that methane output, it’s way better for the environment.

“From a consumer perspective, there’s a whole area that is starting to really get attention, called the ‘ethical supply chain,’” says Acharya, in an interview with Spend Matters. “And it has a fairly broad umbrella around anything that is environmental or sustainability-related.”

He says there’s simply more focus now on how animals and humans are treated throughout the supply chain. For example, he says, consumers say they are 60% more likely to eat at restaurants or are willing to pay more if they know that antibiotics are not used in those products. They see it as an investment in public health.

Acharya specializes in statistical optimization solutions for supply chain management problems, blending his academic research with hands-on experience.

He says McDonald’s may face challenges in ensuring that it’s buying only antibiotic-free beef, though blockchain technology could play a role. Unlike the poultry industry, which has relatively few suppliers, the beef industry is “very fragmented,” Acharya says.

“The biggest challenge is to ensure that all of the beef suppliers actually comply with the new policy. It is one thing to have them pledge and say that they will comply, but that results in the question of whether there will be an audit process and what kind of mechanisms are in place to ensure that the suppliers are living by their words. Technologies such as blockchain may be able to help both audit as well as to track violators.”

Nonetheless, he says, the move is likely to spark a trend that will spread, widely across the quick-serve and fast-food industries.

“When you look at some of the surveys, it’s really the millennials who are willing to pay extra and buy things that they perceive as being healthier, more environmentally friendly, more humane, all of that,” he says.

“I think everyone would essentially have to follow.”



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