McDonald's Burger War Salvo; Is 'Made for You' the Way Folks Want to Have It?

O.K., so McDonald's has a taste problem. The company says a solution is in the works. The only question is whether people will notice it.

At a McDonald's restaurant near the corner of 34th Street and Eighth Avenue in Manhattan recently, they apparently did not -- and that means the fast-food giant also has a marketing problem on its hands. Asked if they thought the fare had improved of late, several customers put on puzzled looks. It was only after they were told that the company had revamped its cooking methods that they perked up.

''It seems a little bit better,'' allowed Nicole Jung, a college student in Manhattan, who was tucking into an Arch Deluxe hamburger. ''The bacon looks like it's just been cooked.''

At a nearby table, Leon Williams said that come to think of it his Chicken Selects strips did seem fresher and tenderer than ones he had ordered in the past. ''When they had a slow day, they might hold it too long,'' Mr. Williams, a postal clerk, said. ''This is the way it should be.''

Competitors knock the new food-preparation system as too little, too late. But McDonald's says it could become one of the defining innovations of its half-century of corporate existence -- ranking right up there with the introduction of indoor seating, drive-through windows, breakfasts and play areas.

Continue reading the main story The key element of the new approach is keeping the bread, lettuce, onions, and all other nonmeat sandwich ingredients fresh -- and thus away from the wilting heat of the holding bins and the zap of the microwave oven. Whereas before, fried meat and toppings were assembled on a bun, then tossed under a heat lamp and finally microwaved just before serving, now the cooked meat is kept warm all by itself. Once an order comes in, it is placed with fresh ingredients on toasted bread and put on a tray -- bypassing the microwave.

Not only do the sandwiches taste fresher under the new method, called ''Made for You,'' the company says, but customers can ask servers to hold the pickles or ketchup without having to wait several extra minutes.

All 13,500 McDonald's outlets in North America are to be overhauled by the end of next year at a cost of up to $380 million, the company said. (McDonald's will take a charge of up to $190 million this quarter to pay for half of the cost, while franchisees will pick up the rest.)

The process has begun slowly, with only about 600 kitchens remodeled in the last year. But the company believes the initiative will help reverse its sagging share of the American market. ''It's got to be the centerpiece of the growth in the U.S business because I don't think it's practical to get growth solely out of new stores,'' Jack Greenberg, the company's president and chief executive officer, said in an interview at his corporate headquarters in Oak Brook, Ill. ''I think sales momentum, the changes we made, the trust and confidence of the operators, all that combined over the last several months has given people a better feeling about the U.S. business.''

The company is counting on the new system to increase same-store sales by at least 1.2 percent, as well as to save as much as $100 million a year in food costs, largely because only meat, and no longer the buns and other ingredients, will be discarded when sandwiches do not sell fast enough. (In theory, even that should happen less often because a computer will now estimate the amount that should be cooked instead of having a manager guess based on how many cars are in the parking lot.)

Of course, such projections could prove to be wishful thinking. Last year, the company's share of the hamburger business in the United States fell by one-tenth of a percentage point, to 42.2 percent, while archrival Burger King's portion surged to 19.4 percent from 18.2 percent and that of Wendy's, a unit of Wendy's International, rose to 11.3 percent from 10.7 percent, according to Technomic Inc., an industry consulting firm in Chicago. Overall sales at McDonald's restaurants open for at least one year have been stagnant, although the results have improved lately, helped in part by last month's promotion of Beanie Babies. Overall domestic revenues, meanwhile, were flat last year, at $4.6 billion. Burger King is a unit of Diageo, formerly Grand Metropolitan.

The core problem is no secret: McDonald's has struggled with complaints about the freshness of its burgers. ''I think our customers were telling us over the years that our food was not up to speed,'' said Irwin Kruger, the owner of six McDonald's in Manhattan and a franchisee for more than 30 years.

Mr. Kruger said the company had neglected its domestic operations in its aggressive attempt to expand overseas. Now, though, he thinks it is back on track, ''refocusing its energy and having more of a strategy and making sure the taste stays first.''

Competitors take a different view, saying McDonald's is simply playing catch-up because it was slow to realize its old procedures had become outdated. Moreover, they contend that the new system lacks the potential to deliver the freshest food in the industry.

''Ours is a truly made-to-order system,'' boasted Denny Lynch, a Wendy's spokesman. ''McDonald's is an assembled system. They pre-cook their meat and it can sit there for 10 minutes. That's not a freshly made hamburger hot off the grill.''

Mr. Lynch added that the founder, Dave Thomas, ''has said one of the reasons he created Wendy's was because of the way McDonald's made hamburgers with batch cooking and pre-select condiments put in heat bins.''

''He calls those mistakes,'' Mr. Lynch added.

Likewise, Burger King crows that in letting customers choose their trimmings, McDonald's has essentially adopted the approach that it has long touted under its slogan, ''Have it your way.''

''It's nothing new to us,'' a Burger King spokesman said.

McDonald's is less concerned about its rivals' digs than about the job ahead. It still has to convince customers that its burgers really do taste better. As important, it must train thousands of workers to use the system, and service could suffer during that learning curve.

''It is going to be painful,'' said Ron Paul, president of Technomic, the consulting firm. ''It's not an easy thing to impose a new system on that many restaurants. McDonald's is basically a factory and now what they are saying is 'run the factory a different way.' ''

Painful or not, the strategy could reap big dividends. It already seems to be paying off at the midtown Manhattan restaurant where customers were only dimly aware of a change in the taste of their food. Mr. Kruger, the owner, says food costs there have declined by about $100 a month while sales have increased 7 percent in the year that the outlet has been using the new system.

And elsewhere, some customers have noticed the change in cooking methods. ''It seems like the Quarter Pounder is juicier,'' declared Rosemary Frigo, a nurse from Downers Grove, Ill., as she devoured an Extra Value Meal at the McDonald's in nearby Darien. ''The Quarter Pounder used to be thrown in the microwave sometimes and they would overcook the meat,'' she added.

Mrs. Frigo, who is also a regular at Burger King because her 17-year-old son Michael prefers Whoppers, also praised the service. ''It seems since they have this set up here it is pretty fast,'' she said. ''They kind of picked up on the competition's system.''

Mike Paleczny, a 19-year-old worker in the Darien restaurant's kitchen, thinks the new method is more efficient than the old one. ''Before, you had to put the bun on a tray and dress it and microwave the meat and wrap it and put it in a bin,'' he said. ''Now you just dress and wrap it and it cuts out like two steps.''

Some analysts question whether the system can hold up during a busy lunch rush or when a packed school bus shows up, but McDonald's says not to worry. Food will arrive in about the same time as before, it says, because it has shaved seconds off the assembly process to keep production moving.

For instance, the company developed a toaster that browns buns in 11 seconds instead of half a minute. Bread suppliers had to change the texture of the buns so they could withstand the additional heat. Someone even figured out that workers could save two seconds if condiment containers were repositioned to apply mustard to sandwiches with one motion instead of two. And cabinets with controlled temperatures and humidity levels were added to keep meat hot and moist without having to be zapped in a microwave.

Mr. Greenberg thinks the remodeled kitchens -- and the company's new-found emphasis on improving existing domestic stores rather than aggressively opening additional restaurants -- will give McDonald's an advantage against competitors. But he concedes it will be a struggle.

''The U.S. business is going to continue to be tough,'' he said. ''Our competitors are not going to go away tomorrow and they are going to keep getting better.''

In one of the latest shots in the burger wars, McDonald's is now testing a burger it calls the Big Extra that looks and tastes surprisingly like a Whopper. The move came after Burger King introduced the Big King last year, a burger that consumers would be hard pressed to distinguish from a Big Mac.

For all the hopes McDonald's is placing on its new food-preparation system, the revamping effort has built-in limitations. Because the meat continues to be precooked, there will still be some waste from beef or chicken that sits too long. And the promise of a cooked-to-order burger every time is a bit of a stretch. The computer that serves as the operation's nerve center in each restaurant will still try to anticipate business, placing advance orders when it spots an uptick in sales. As a result, some customers will still get sandwiches made a little before they pull into the drive-through.

''Let's face the reality of what the system can do and what it is going to do at crunch time,'' Mr. Paul of Technomic said. ''They are not going to act like nobody is going to order a cheeseburger.''

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McDonald's Burger War Salvo; Is 'Made for You' the Way Folks Want to Have It?