Food Business News - February 11, 2014 - (Page 12)

McDonald's is learning less is more A spate of new product launches in 2013 did not have the desired effect OAK BROOK, ILL. - A supersized new product pipeline created an operational headache for the McDonald's Corp., which blamed "too many new products, too fast" for disappointing fiscal results. With last year's additions of Premium McWraps, the Egg White Delight, new Quarter Pounder burgers and a flurry of limited-time offers, the hamburger chain said its ambitious innovation efforts created complexity in its restaurants. "One of the things we did last year ... we overcomplicated the restaurants," said Tim Fenton, chief operating officer of McDonald's, during a Jan. 23 call with financial analysts to discuss fiscal-year results. "If you remember, we introduced McWraps, we introduced Egg White 12 FOODBUSINESS NEWS ® Delight, we introduced Quarter Pounder toppers, and really didn't give the restaurants an opportunity to breathe." After suffering a "stall" in innovation in 2012, McDonald's last March revealed plans to increase product introductions across its entire portfolio of categories. "It's about energy, excitement and innovativeness in the menu pipeline," said Don Thompson, president and chief executive officer, during a March 13, 2013, presentation at the UBS Global Consumer Conference. "We never want our menu to become stale." The company ended its fiscal year on a flat note. For the year ended Dec. 31, McDonald's net income rose 2% to $5,585.9 million, equal to $5.55 per diluted share, up from $5,464.8 million, or $5.36 per share, in fiscal 2012. Total revenues increased 2% to $28,105.7 million from $27,567 million last year. Net income for the fourth quarter was $1,397 million, or $1.40 per share, up slightly from $1,396.1 million, or $1.38 per share, in the prior-year period. Total revenues in the quarter increased 2% to $7,093.2 million from $6,952.1 million during the fourth quarter last year. Now the company is honing its focus yet again. "We introduced a number of significant new products and limited-time offers at a quick pace that challenged more effective restaurant and marketing execution," Mr. Thompson said during the Jan. 23 call. "Our 2014 menu and marketing strategies better balance affordability with core products, new choices and limited-time offers." McDonald's hopes to achieve this balance in part with the Dollar Menu & More, which debuted in November and was designed to increase traffic by offering greater value while boosting restaurant profitability. "We've also adjusted the sequencing of product introductions, making it easier for restaurant teams to execute especially when it comes to training and staffing," Mr. Thompson said. Fewer products also mean faster throughput, Mr. Fenton added. "That allows us really to have more February 11, 2014

Table of Contents for the Digital Edition of Food Business News - February 11, 2014

Food Business News - February 11, 2014
Post to buy PowerBar from Nestle
Beverage ingredients in the spotlight
Beef prices are red hot
Table of Contents
Web Contents
Editorial - Cause marketing gaining momentum
Green Mountain, Coca-Cola form partnership
McDonald’s is learning less is more
F.D.A. proposes sanitary food transportation rule
Price increase still planned for Chipotle
Inside Tyson Foods’ prepared foods strategy
Beef, chicken drive gains for Tyson
Meat costs will hinder Hillshire in second half
Meijer to build dairy facility in Ohio
Hershey seeks to set new bar in spreads
Washington - Putting the new farm bill in focus
Health and Wellness - Digesting the additional benefits of gut health
Are designer fibers on the horizon?
Ingredient Innovations - Making cereal more satisfying
More satiety strategies
Beverage Business News - Beverage ingredients in the spotlight
New Food Products
Ingredient Market Trends - Weather woes continue to affect markets
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 11, 2014