Lebanon Reporter

Features

October 18, 2012

In hard times, hungry consumers still flock to the Golden Arches

(Continued)

McDonald's understands the wellsprings of its success, which is why it has seen its stock rise more than 500 percent in the past decade. The top burger brass has learned to listen to the mothers who called for salads, snack wraps, oatmeal and apples. And McDonald's listens to Wall Street, where the message is just as clear: Drive down costs. Make efficiency your god. Deliver value. It has jettisoned other chains such as Chipotle, Boston Market and Pret A Manger, which means no more distractions from border skirmishes with Panera, Burger King and manifold franchises. And though 7 percent of Americans ate at a McDonald's yesterday, there are a lot of Chinese folks who haven't had the pleasure. So the Golden Arches announced last year that it plans to open 700 new restaurants in the Middle Kingdom by 2013. Plus, in these tough economic times, it's hard to hate a company that hires an estimated 1 million Americans each year.

Of course, tough times lie ahead for ingredient purchasers of all stripes, as agricultural futures spike for the third time in five years and speculative profit-grabbing takes over grain markets. But MCD's global risk-management acumen matches its global purchasing power. U.S. and Russian grain may be scarce this fall, but Brazil will post a great harvest — and no hamburger bun I've ever seen has noted its point of origin.

There will be headwinds, for even fast-food giants rely on inputs subject to the whims of climate change, speculation, biofuel mandates and flavors of the month. But while mango pineapple smoothies and a tanking euro may come and go, the human body's demand for cheap, tasty food endures — recession or no recession. Today, there's a percolating spring of profit in McCafé lattes — not to mention a quarter of the daily calories a human being requires in a single chocolate chip frappé. Macroeconomics is one thing; stomachs another — and that may be the most important reason the ghost of founder Ray Kroc can sleep easy.

Ronald and friends fight hard on behalf of their customers' wallets, in good years and bad. The day a Big Mac costs $20 isn't the death of the McDonald's business model, nor the demise of the brand. The day a Big Mac costs $20 will be the end of the world.

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Frederick Kaufman is the author, most recently, of "Bet the Farm: How Food Stopped Being Food."

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