On Tuesday, July 26, it was announced that McDonald's Corp (NYSE: MCD) would be putting its iconic Happy Meal on a diet.
Menu changes underway include the addition of more nutritionally-balanced choices that meet McDonald’s reputation for great taste and affordability, along with an increased focus on providing nutrition information that enable customers and employees to make simple, informed menu decisions.
McDonald’s Commitments to Offer Improved Nutrition Choices include:
1. Championing children’s well-being: McDonald’s will automatically include produce or a low-fat dairy option in every Happy Meal®. By the end of Q1 2012, we will produce apples in every Happy Meal and promote options that meet the new, rigorous Council of Better Business Bureaus Food Pledge nutrition standards. The impact will be an estimated 20 percent reduction in calories of the most popular Happy Meals, also reducing fat in those meals. We are also exploring alternatives to the automatic apples, such as other produce or low fat dairy items. In 2012, McDonald’s will also raise nutrition awareness among children and parents through national marketing initiatives. The company will promote nutrition and/or active lifestyle messages in 100 percent of its national kids’ communications, including merchandising, advertising, digital and the Happy Meal packaging. McDonald’s will also provide funding for grass roots community nutrition awareness programs.
According to The New York Times, pressure has been increasing on the company in recent years to make a change:
Lawmakers and consumers have rallied around breaking that childhood link between toys and fast food, with the efforts increasing as Michelle Obama and national public health officials point to the estimated 17 percent rate of obesity among the nation’s youths.
San Francisco, for example, has banned the inclusion of toys in children’s meals unless certain nutritional requirements are met. A New York City councilman is proposing a similar law.
Other restaurant chains have gone further than McDonald’s in acceding to calls for improving the fare on children’s menus and eliminating marketing appeals. In June, Jack in the Box announced the end of toys in its children’s meals, and this month, Burger King, IHOP and more than a dozen other restaurant chains backed an effort led by the National Restaurant Association to serve and promote healthier options for youngsters.
The New York Times mentions that Happy Meals make up less than 10% of all sales, but children don't come in alone. Adding in associated adult purchases, if this change isn't popular among children, what effect will it have on complementary sales?
Covestor models that held MCD as of 7/26 include:
- Large Cap Core Equity
- Global Diversified Moderate
- Global Diversified Aggressive
- Deep Fundamental Analysis
- Fundamental Growth
- Dividend Value
- Large Cap Growth
"McDonald’s® Announces Commitments to Offer Improved Nutrition Choices" McDonalds Press Release, 7/26. http://www.aboutmcdonalds.com/mcd/media_center/recent_news/corporate/commitments_to_offer_improved_nutrition_choices.html
"McDonald’s Trims Its Happy Meal" New York Times, 7/26. http://www.nytimes.com/2011/07/27/business/mcdonalds-happy-meal-to-get-healthier.html?_r=1&partner=rss&emc=rss