Nut controversy puts cracks in McDonald’s breakfast plans
Consumer concerns over allergies cloud all-day meal promotion
McDonald’s Canada has TORONTO found itself in the awkward position of trying to trumpet its all-day breakfast rollout as it faces a public relations storm over its changed nut procedures.
Set to debut at McDonald’s 1,400 restaurants across Canada on Feb. 21, the announcement of all-day breakfast was confirmed Wednesday. Already highly anticipated, news of the rumoured breakfast rollout leaked two weeks ago after customers noticed a handful of Canadian restaurants offering a daylong menu of Egg McMuffin, hotcakes, sausages and hash browns.
In the interim period last week, a public relations blizzard arrived in the form of a Skor McFlurry.
The new dessert’s introduction on Jan. 17 was accompanied by a message from the quick-serve food chain that it would be the company’s first product to contain nonpackaged peanuts or tree nuts.
McDonald’s Canada warned consumers all of its dishes “may contain” peanuts, tree nuts or other allergens.
The backlash was swift from those who had viewed McDonald’s as a fairly safe haven among large chains for those with food allergies.
Food Allergy Canada, a non-profit consumer advocacy group, penned an open letter to McDonald’s Canada president John Betts this week expressing disappointment and a request for greater clarity about the potential for allergen cross- contamination on products as needed. A Change.org petition from the group has since collected more than 5,000 signatures, and consumers have been taking to social media in droves, signing their displeasure with the hashtag #NotLovinIt, while some calling for a boycott.
McDonald’s Canada had never claimed to be nut-free, noted Laurie Harada, executive director at Food Allergy Canada, a non-profit consumer advocacy group.
“It was how the community has perceived them,” said Harada, who said an estimated 7.5 per cent of Canadians, some 2.5 million people, identify as having food allergies.
“And McDonald’s understood that people referred to them as ... a place they could trust because of the way they managed peanuts,” she said. “As a diner, there is always risk. But it had a big reputation with these families, and they are loyal customers. They feel let down.”
The resulting imbroglio touched on a complex intersection of sometimes-conflicting issues including food safety, business efficiency, marketing, corporate liability and customer perception.
McDonald’s Canada, in response to the outcry, released a further statement this week saying it “take (s) very seriously the concerns expressed to us by families and individuals with allergies.” It also noted its policies are consistent with that of other food service companies. “To hold McDonald’s alone to this standard is unreasonable and beyond anything required of any other brand in our industry,” the statement said.
Industry experts note that the long-standing kitchen procedures at McDonald’s Canada, individually packaging nuts for its sundaes and salads, for example, were likely motivated by the company’s desire for food safety and efficiency rather than an overt concern about allergens. Putting peanuts in a packet make good sense from a cost perspective if it gives you a firm control over how many nuts go on a sundae.
Those measures in turn helped foster the notion that McDonald’s was a safer environment for people with allergies.
“You can’t expect restaurants to guarantee a safe environment for everyone, and from a business perspective, it would not be financially viable to do so,” said Sylvain Charlebois, dean of management at Dalhousie University in Halifax. “On the one side, you have a com- pany trying to make their menu more efficient from an operational perspective. I believe McDonald’s took a calculated risk. But given the market that they have been aiming at for decades — families with children, some of whom will have allergies — they are exposing the brand to some criticism.”
McDonald’s Canada’s business strategies, which have tripled its coffee sales in less than a decade and more than doubled its breakfast sales to account for 21 per cent of its $4 billion in annual revenue, appear to be aimed at millennials more so than families, Charlebois said, including the introduction of a host of customizable menu items.
“This is a marketing issue,” he said. “McDonald’s was viewed as a safe place to go for families who live in fear, a kind of a bubble. This burst that bubble.”
McDonald’s Canada president John Betts spoke with the Financial Post in advance of the launch of all-day breakfast last week before the consumer food allergy outcry.
“The most-asked question last year that I got was when are you going to do all-day breakfast,” he said. “We spent the last few years working on a number of things, and we made changes inside our kitchens to be able to do those things and prepare for all-day breakfast.”
Betts was not available for comment this week, and company officials referred to their most recent statement that noted the operational changes require an accurate and transparent allergen policy.
Alan Middleton, a marketing professor at York University, said the company mishandled its initial statement about the Skor McFlurry to customers. While sound from a corporate liability standpoint, Middleton said, the company “violated PR 101” by not appearing to demonstrate much sympathy for those with allergies, and being slow to respond with the subsequent message that it was listening to its customers’ allergy concerns.
“They should have responded more aggressively,” Middleton said. “You need to say right away, “we care, we do understand, we will make it clearer about what we are going to do about it’.”
In the meantime, Middleton noted, all-day breakfast might not be the saviour it once seemed to McDonald’s U.S. business, which has not experienced the sales growth trajectory of its Canadian unit. The company’s U.S. sales surged for a year after introducing all-day breakfast in U.S. outlets in the fall of 2015, but that stalled in the fourth quarter of 2016, when U.S. samestore sales fell 1.3 per cent.
“McDonald’s is going to play this down for now, because they want to promote all-day breakfast in Canada, but they will have to come up with a better response,” he said. “This nut issue is not going to go away.”
As a diner, there is always risk. But it had a big reputation with these families ... They feel let down.