Industry News | July 27, 2007

An Hour with 'The Empire'

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By Blair Chancey

Viewers discovered McDonald’s isn’t just any fast-food joint during the debut of CNBC’s original network documentary, Big Mac: Inside the McDonald’s Empire. The hour-long special was hosted by Carl Quintanilla, co-anchor of CNBC’s market and political morning show Squawk Box, and followed the quick-serve superpower through everyday operations, into corporate test kitchens, and even overseas to deliver a comprehensive look at the industry giant.

CNBC has done similar documentaries on Wal-Mart and American Airlines, two other U.S. market giants who have experienced both criticisms and praises for their business strategies.

Wally Griffith, one of two senior producers for the documentary, says the main reason the network wanted to feature the company was the fast-food chain’s ability to recognize and react to consumer trends. For example, despite the backlash and negative publicity from the 2004 Morgan Spurlock documentary Super Size Me, Griffith says McDonald’s has begun to repair its image and to offer healthier meal options.

“Whether you take a cynical view of that like, ‘Oh they’re just trying to make more money,’ or whether you look at it as a more reasonable, wholesome response to criticism, they’re trying to do better,” he says. “Whatever your take on it is, they’re very good at it.”

McDonald’s representative Heidi Barker says that agreeing to cooperate with the network was in character with the McDonald’s relationship with the media.

“They’re going to give a fair and objective look,” she said in an interview before the show aired. “So, we approached it as we would any news story and had very much of an open-door policy in terms of our nutritional information and corporate/social responsibility policies.”

“I can imagine somebody inside McDonald’s saying, “What can we get out of this?” So, the fact that they did decide to do this shows a degree of confidence that they can withstand scrutiny,” Griffith says of the company’s decision to cooperate with the requests of him and his crew.

According to Griffith, during filming there was a “healthy tension” between the network and company which he says is not unique to working with McDonald’s. And that, aside from retired executives, McDonald’s was able to provide all the interviews the network requested.

“This was very much a CNBC project that happens to be on McDonald’s,” Baker says. “McDonald’s didn’t approach CNBC with this idea, it’s a news story. It’s really their project and we cooperated with them.”

Despite the company’s cooperation and “open-door policy” there was no avoiding the topic of health and nutrition when CNBC investigated the company. During the documentary experts from New York University and Yale’s Rudd Center for Food Policy and Obesity said that McDonald’s was at least partly to blame for today’s 9 million overweight children in the U.S.

Although McDonald’s Chief Marketing Officer Mary Dillon told CNBC that they have eliminated Super Sizes and that the company’s partnership with the movie Shrek the Third was its largest healthy marketing campaign for kids in McDonald’s history, the chain’s efforts proved fruitless when Quintanilla approached actual customers. When two men tell him that they have eaten at the quick-serve everyday for two weeks and had no clue the meal’s calorie information was printed in three different places, it’s clear that the company’s health-conscious efforts are not making their way to the consumer.

As images of frying hamburgers and sizzling fries flashed across the screen Quintanilla narrated: “The fact of the matter is that McDonald’s’ bread and butter is still meat and potatoes.”

“My hope is that they’ll reflect on it and conclude that it’s fair,” Griffith says of McDonald’s reaction to the documentary. “I think if they were too happy with it, you might be alarmed, but they understood that we had full editorial control which is the way is has to be.”

In addition to allowing cameras to look into U.S. operations, McDonald’s executives also described the potential of the Chinese market. With a population of 1.3 billion people, McDonald’s plans to push a major expansion in the country in the near future.

“One of the most interesting things we found was how much potential growth McDonald’s itself still sees out there,” Griffith says. “You might think with 14,000 restaurants in the U.S. and 30,000 plus internationally, ‘Wow, there’s got to be a saturation point.’”

He also adds that after years of communist rule, the Chinese people enthusiastically embrace Western concepts into their everyday culture. “They want to see Western companies and Western icons available in their stores, whether it’s Coca-Cola, McDonald’s, Mercedes, or Prada,” he says. “It makes them feel like a robust economy and part of the world.”

And that’s certainly how McDonald’s views the country, as well. While most other quick-serves are trying to figure out how to position themselves for an initial introduction into Asia, McDonald’s is trying to turn its existing 800 locations in China into 10 to 15,000 units.

“Things that appeal to people in Bulgaria, Kansas, or Australia are the same things that appeal to customers in Beijing and Shanghai,” Griffith says of the company’s global success.

For more information on McDonald’s presence in China, check out QSR’s coverage in the January 2007 issue of the magazine.

CNBC will rebroadcast the documentary 10 more times over the next six weeks. The next of those broadcasts will be Monday, July 30 at 9 p.m.

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