Transcript McDonald`s Corporation And The Issue of Health and Nutrition

McDonald’s Corporation
And
The Issue of Health and Nutrition
An Arthur Page Society case study in
issues management
The Issue
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Obesity is a pervasive problem in America, and
as people increasingly become overweight, their
health suffers
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64% of all Americans overweight and 30% are obese;
the percentage of children age 6 to 19 that are
overweight has doubled in the last two decades
Health risks: heart disease, Type II diabetes,
high cholesterol, high blood pressure
Targeting McDonald’s
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The nutritional content of fast food--high in fat,
sugar, and calories--is linked to weight gain and
consequent health problems. McDonald’s bears
the brunt of criticism because:
McDonald’s is a powerful multinational
corporation and the fast food industry leader
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McD’s has more than 31,000 restaurants in 119
countries
McD’s feeds more than 46 million customers per day
McD’s employs more than 1.5 million people
The Opposition
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There are organizations,
associations, government
agencies, consumer groups,
activists, bloggers, etc. critical
of McDonald’s on the issue of
health and nutrition
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This case study focuses on
major attacks occurring
from 1994 to 2006
McLibel 1994-1999
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McDonald’s sued two protestors for allegedly libelous
statements made in a pamphlet, “What’s Wrong with
McDonald’s”
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PR disaster that made McDonald’s look like a bully
Built the media agenda on issues unfavorable to McDonald’s
Appellate court ruled that the defendants were justified in claiming
that regular customers of McDonald’s did face a heightened risk of
heart trouble
Pamphlet later reproduced on the Internet to massive international
audience
Court case cost McDonald’s over a million dollars
Court case provided the material for a full length documentary
released in 2005, McLibel
McLawsuit 2002-2003
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A group of obese teenagers who ate at McDonald’s 3-5 times per
week sued McDonald’s for causing their weight problems. They
alleged that:
 McDonald’s advertising and promotional representations create
a false impression that its food products are part of a healthy
lifestyle
 McDonald’s said it would have nutritional information available
to customers but it wasn’t
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The court ruled in favor of McDonald’s but the resulting press
coverage put the issue once again in the forefront. This case was
what gave Spurlock the idea for Super Size Me.
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2002 first time McDonald’s posted a quarter loss in its history.
Fast Food Nation 2001, 2006
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A book highly critical of the fast food industry
New York Times best seller
Version directed to children 11-15 years old,
Chew on This, published in 2006
Fast Food Nation released as a movie in
November, 2006
Movie tag line: The Truth is Hard to Swallow
Super Size Me, 2004
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“One man’s journey into the world of weight gain,
health problems, and fast food.”
Morgan Spurlock’s documentary account of his
personal experience over a 30-day period of
eating nothing but McDonald’s food. He gained
25 pounds and suffered physical ailments.
Spurlock called for eliminating super size option
and providing nutritional information.
Educational versions for middle and high school
students now available.
The Public Relations Function of
Issues Management
Corporations must work to solve problems when
confronted by people and organizations that may
be against what the corporation says, offers, or
does
 Corporations must strive to repair relationships
with external publics and enhance its corporate
reputation
McDonald’s must adopt strategic communication
responses to those who disapprove of what they
see as McDonald’s role in promoting obesity and
health problems.
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Response Options in Issues
Management
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Acquiescence
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Negotiation (Two-way)
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Stop doing what is bothering critics
Work collaboratively for consensus and compromise
Confrontation (One-way)
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Discredit the opposition
Argue your side
Take legal action
McDonald’s Responses – The Bad
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One-way, asymmetrical communication
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Denial of any concern or compromise with critics
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McD’s has avoided dialogical, or two-way, communication with
critics.
McD’s declined invitation to appear with Schlosser on NBC’s
Today Show and instead sent a statement of facts and told them
to visit the web site.
McD’s insists it did nothing in response to the film Super Size
Me and has stated it had no need to plan proactively for the
release of the film Fast Food Nation.
Main message is one-way: “More aggressive in telling our
side of the story”
Denial of investigative reports
Quote Examples
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“We don’t sell nutrition and people don’t come to McDonald’s
for nutrition. Rather than fight a defensive war of attrition by
responding to constant nutrition attacks, let’s not even deal
with it.” (1986, PR executive handling McD account)
“We have media days and fact sheets that are available
through our web site, as well as platforms that will afford us
any opportunity to talk about what’s important to McDonald’s.
We cannot be overly concerned about anyone else.” (2006,
Walt Riker, McDonald’s VP of Corporate Communication and
Media Relations, regarding the release of the movie Fast
Food Nation)
Ineffective Response: Promising
action but not delivering on action
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McDonald’s promised in 2002 to change its trans
fat cooking oil to a healthier alternative.
Customers’ complaints led McDonald’s to cancel
that action
Legislation has been proposed in 2006 to ban
trans fat cooking oils in restaurants
Other fast food chains have voluntarily instituted
the change
(Questions for discussion next slide)
Questions for Discussion
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How can the impact of changing the taste
of their French fries be weighed against the
health harms of trans fat cooking oil?
How is credibility affected by promising
actions but not delivering on them?
Are there occasions when a company may
take a hit on an immediate action in order
to build better relationships for the future?
McDonald’s Responses – The Good
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Corporate social responsibility blog
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The balanced, active lifestyles initiative
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Contains section “Engaging in the Global Obesity
Dialogue”
Allows feedback and discussion
Adding more menu choice
Providing nutrition education
Supporting physical activity
Theme: “It’s what I eat and what I do…I’m lovin’
it”
Marketing Actions
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Menu choice: premium salads, bottled water, low fat/skim
milk, white meat chicken
Go Active! Happy Meals for adults
Walking program and free pedometers
Get Moving with Ronald McDonald and McMunchright
Celebrity brand ambassadors
Nutritional labeling on products (in most restaurants within
one year period)
Collaboration with Scripps Research Institute for fighting
childhood obesity and Type 2 diabetes
Ubiquitous advertising campaign emphasizing physical
activity
Timeline
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By 1986 Aware of Issue
1994 McLibel – McDonald’s food can be harmful to health
2001 Fast Food Nation
2002-2003 McLawsuit– Need for nutritional information; food harmful to
health
 McD’s posts first quarter loss in corporate history
 Per share stock price plumments
 McD’s promises to replace trans fat oil
 McD’s introduces healthy options in 2003
2004 Super Size Me – Should cancel super size option, need for nutritional
information
 McD’s cancels super size option
 McD’s introduces Balanced, Active Lifestyles initiative
2006 FDA introduces proposal ban trans fat oil in restaurants
2006 Fast Food Nation, the movie and Chew on This, children’s book
 McD’s starts putting nutritional information on packaging
 McD’s still hasn’t replaced trans fat oils
First Steps of Effective Issues
Management
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Listen for threats through
issue/environmental scanning
Determine whether the issue will affect the
organization/corporation
If yes, give the issue priority in proactive,
timely strategizing
Points of Discussion – Timeline
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Effective issues management calls for
monitoring and identifying emerging issues
early in order to plan proactively.
McDonald’s knew of the issue for years, yet
delayed taking actions until it was
defensive rather than proactive.
(Questions for discussion next slide)
Questions for Discussion
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With advance knowledge of the brewing
issue, what proactive steps could
McDonald’s have taken?
Why is it advantageous to take action
proactively rather than defensively?
Page Principles: Tell the truth
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Denied Super Size Me had anything to do with
cancellation of the super size option even though
McDonald’s withdrew the option just six weeks
after Super Size Me premiered
Denied any concern or need to plan proactively
for the premiere of Fast Food Nation
Denied investigative reports regarding an internal
memo sent to franchisees to discredit Eric
Schlosser
Claimed to have nutritional information available
for 30 years
Page Principles: Listen to the customer
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McDonald’s has experienced moderate and
continuous growth in sales and per share
stock price 2003-2005
However, fast food companies such as
Chipotle, Buffalo Wild Wings, Panera Breat,
Panda Express, Quiznos, Starbucks, and
Jason’s Deli are the ones reaching highest
growth in the fast food industry
Page Principles: Manage for tomorrow
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Positive: McDonald’s has instituted several
marketing programs addressing the need
for balanced, active lifestyles
Positive: McDonald’s has expanded healthy
menu choices
Negative: McDonald’s has refused to
engage in the debate over nutrition and
health with its critics
Page Principles: Conduct public relations
as if the whole company depends on it
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Emphasis is placed on marketing, rather
than public relations
McDonald’s needs to focus on public
relations reputation building through
increased transparency and dialog
Page Principles: A company’s true
character is expressed by its people
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Top management acknowledges a one-way
message strategy of emphasizing their
need to “do a better job of telling their story”
Top managements’ statements tend to
project a position of power rather than a
more concerned and open viewpoint
Page Principles: Remain calm, patient,
and good-humored
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McDonald’s has done an excellent job of
remaining calm and patient
However, McDonald’s has not shown a sense of
humor in the face of targeted criticisms
Question for discussion: What would be the best
way for McDonald’s to maintain a sense of humor
in regard to the issue of health and nutrition?
Conclusion: McDonald’s Challenge
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The main question facing McDonald’s is whether they can
continue their world dominance in the fast food industry by
promoting active, healthy lifestyles when their mainstay
products continue to be linked to obesity and related health
problems. McDonald’s has done a laudable job in marketing
the concept of consumer choice and in establishing a
generous corporate social responsibility program. However,
in the U.S. at least, McDonald’s has not reduced advertising
to children, reformulated its trans fat cooking oil, or lowered
fat, salt, and/or calorie counts on its core products. Rather
than diminishing, the issue of health and nutrition continues
to escalate and McDonald’s remains a key target in 2006.