McDonald's gets health conscious

Changing tastes trigger a change of menu at the global burger chain. Is this a sign of the times to come for fast food brands across the country?

With more and more consumers, especially the young, becoming health conscious; one of the world's largest QSR (quick service restaurants) chains is turning down the fat in its food across its outlets in western India. Driven by research that shows the young millennial fast food consumers to be healthy and adventurous eaters, McDonald's, the world's poster boy for 'fast food', which is often synonymous with food that caters to our palate but not health, has been working hard on its recipes and menu choices. It has made several nutritional improvements: the sodium content across sauces, buns and McNuggets is down by 10 per cent and in its fries by 20 per cent. The oil content in the sauces has come down to 25 per cent from 67 per cent, which practically brings down the calories by up to 40 per cent in the sauces.

"Today we are proud to have pioneered the low-fat mayonnaise in the Indian QSR space," says an emphatic Aditya Kharwa, director, business operations (rest of west), Hardcastle Restaurants Pvt. Ltd (HRPL), a master franchisee for west and south India operations of McDonald's Restaurants. It is a subsidiary of Westlife Development Limited (WDL).

Work on a new and improved menu began around 2013. As Kharwa explained, "We've worked hard on our recipes and menu choices to make nutritional improvements through reformulation and reduced fat, salt and sugar." McDonald's dairy products too (soft-serves) have less than three per cent fat. It has also introduced options on the bread that goes into the burger buns. Customers can choose between focaccia and masala buns if they want to eschew the regular white bread burger buns. In India, one of the early fast food chains to do this was Subway, which offers a wide range of choices for its breads.

McDonald's' move to add value to its offerings, be it through adding nutritional value, or by making more premium offerings, did not happen just like that. Research has shown that there is actually a shift in consumer preference towards 'premium-isation'.

According to an internal study conducted by McDonald's last year, consumers today are increasingly seeking a 'wholesome and filling meal'. They prefer products that are 'premium and satiating', the company spokesperson said. The new low-fat, low-salt products at McDonald's cater to their tastes. "We have seen a jump of over 10 per cent from 2012 to 2015 in the consumption of premium offerings from young consumers," she added.

Another trend that McDonald's is keeping an eye on is the increasing preference for vegetarian fare. In fact, consumer research agency Technomic's recent report, 'Center of the plate: Seafood and vegetarian consumer', shows that about 30 per cent of consumers said they eat vegetarian or look for substitutes (for non-vegetarian food) at least once every 90 days, compared to nearly 40 per cent of 16-34 year-olds. McDonald's feels that as these consumers age and become their core consumers, it will be increasingly important to satisfy their demands for vegetarian options.

The millennial buyer, the centre of attention for a range of brands today, is also a part of what is called the 'foodie generation'. Particular about what they put on their plates, McDonald's feels that these consumers are tastemakers who dictate and predict food trends. According to global research agency Mintel, nearly 75 per cent of millennial consumers say they want to experience more flavours at restaurants. The research further highlights that 24 per cent of fast food consumers are interested in burgers made using premium bread and ingredients. About 62 per cent describe themselves as 'adventurous eaters' and prefer diverse flavour profiles.

Driven by the changing trends among the new gen consumers, many QSR brands have introduced adult and gourmet sandwiches to their menus. They have also experimented with flavours and exotic ingredients and condiments to draw in the adventurous customers.

Based on the insights from such research reports, McDonald's deep dived to innovate and address the evolving needs of its customers. It has till date locally developed over 70-80 per cent of its menu to address the taste preferences of its customers. For that matter, India is the only country in the McDonald's system where approximately 50 per cent of the menu has vegetarian options. In fact, ever since the Big Mac brand was introduced in 1967, for the first time it was expanded beyond beef and chicken for India when McDonald's introduced the Veg Maharaja Mac this year.

Kharwa informed that, "We are around 7 per cent of the $121 billion Informal Eating Out (IEO) market in India." Of this, the QSR segment is around $18.9 billion which is further divided into Indian fast food ($17.8 billion) and western fast food ($1 billion).

Kharwa adds that there is huge opportunity in this growing market. HRPL plans to invest Rs 700-750 crore to add 175-200 new restaurants in three to five years. It already operates 52 McCafe's across six cities (this is another endeavour to offer healthier drinks options apart from carbonated beverages at its restaurants) and has served over one million customers. It plans to add 50-60 McCafe's by FY17.