MCDONALD’S TARGETS $1BN CHICKEN BRANDS FOR GROWTH

Global fast-food operator McDonald’s Corporation has set its sights on growing its chicken business in the coming years as demand continues to increase.

The company, which is the world’s leading foodservice retailer with over 40,000 locations in over 100 countries, relies on its core meat-based menu items like the Big Mac, Quarter Pounder, and Chicken McNuggets, plus its famous fries, to drive about 65% of sales. These lines also ensure profitable growth.

However, McDonald’s claims to be gaining share in the fast-growing chicken category, which is regarded as a significant opportunity. Today, the size of its chicken business is on par with beef, and the company continues to aggressively expand its billion-dollar chicken lines which include McNuggets, McChicken, McCrispy, and McSpicy.

McCrispy to go global

In particular, there are plans to offer McCrispy in nearly all markets around the world by the end of 2025 – and to expand McCrispy into wraps and tenders. These timescales and innovations in new-menu offerings reflect the company’s ability to test and scale quickly to serve customers.

In total, 17 classic McDonald’s menu items are each billion-dollar brands in their own right. The company says it is building on its historic strength with burgers, but also evolving these longest-standing menu items. One example is the deployment of the Best Burger initiative to nearly all markets by 2026.

Fast, sustained growth expected

These meat-led initiatives, and a string of others, mean that McDonald’s is bullish on its future performance, claiming they will “usher in the fastest period of growth in the brand’s history”.

Among some of the other initiatives are targeting 50,000 restaurants by 2027 by expanding one of the world’s largest loyalty programmes from 150 million to 250 million 90-day active users by 2027. Meanwhile, from the beginning of 2024, the company will also connect thousands of restaurants worldwide with Google Cloud technology to improve operations and the customer and staff experience.

McDonald’s ambitious new growth targets are part of its “Accelerating the Arches” strategy. CEO Chris Kempczinski described the programme as having had “exceptional execution” and added: “It has delivered tremendous results across our key growth pillars. There has never been a better time to be part of brand McDonald’s.”

He added: “We have a clear trajectory for future growth as we continue to build on the brand strength, global footprint, and digital ecosystem that have cemented McDonald’s as one of the world’s leading consumer-facing brands.”

Since 2019, the company has generated 30% comparable sales growth through the “Accelerating the Arches” programme underpinned by the three so-called M-C-D growth pillars to:

• Maximise marketing
• Commit to the core
• Double down on the 3Ds of delivery, digital, and drive-thru, with a fourth D (development) added earlier in 2023

Building relevance among customers

Market research group Kantar recently named McDonald’s one of the world’s top five most valuable brands, for the first time, driven, it said, by culturally relevant creativity that drives growth. For its part, the fast-food retailer said that it was building emotional connections based on a “feel-good” marketing approach.

An example is the “Raise Your Arches” campaign which demonstrated the brand’s agility in creating and scaling its marketing outreach activity that feeds McDonald’s global fandom and inspires closer brand affinity. Originally developed in the UK, the campaign was quickly picked up by more than 35 markets around the world.

Another way in which McDonald’s connects with its customers is through personalised value and digital offers, like those available on the brand’s mobile app. One reason the company’s venues continue to be a destination of choice is that they are recognised by customers as affordable places to eat versus competitors in the sector.

Moreover, by doubling down on technology – by deploying new, universal software that all McDonald’s customer and restaurant digital platforms will run on – McDonald’s is set to double down on attracting younger tech-savvy consumers through mobile ordering which has become a popular and growing choice.

During the third quarter of 2023, hundreds of millions of mobile orders were recorded, and the company plans to increase its active loyalty user base via digital platforms and deliver $45 billion (€41.79 billion euros) in annual sales to loyalty members by 2027.

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