Tags: McDonalds | chicken | antibiotics | restaurant

McDonald's to Stop Serving Chicken Treated With Antibiotics

Wednesday, 04 March 2015 02:02 PM

McDonald’s Corp.’s U.S. restaurants will stop serving chicken raised with some antibiotics in the next two years in a bid to regain diners that have fled to rivals like Chipotle Mexican Grill Inc. in search of healthier food.

Only chicken raised without antibiotics “important to human medicine” will be sold at the chain’s roughly 14,000 U.S. locations, Oak Brook, Illinois-based McDonald’s said in a statement Wednesday. McDonald’s also will begin offering low-fat milk and fat-free chocolate milk from cows that aren’t treated with the artificial growth hormone rbST.

McDonald’s, coming off its worst annual sales slump in five years, is working to win younger customers that are flocking to chains like Chipotle and Panera Bread Co., which emphasize the quality of their ingredients. While McDonald’s announcement may be well-received by consumers, the company will need to do more to fully revamp its image.

“It’s still very much an uphill battle,” RJ Hottovy, an analyst at Morningstar Inc. in Chicago, said in an interview. “Consumer perceptions are not going to change overnight, but it’s a certainly a step in the right direction.”

Investors applauded the move as well. The shares gained after the announcement, rising as much as 0.7 percent after being down as much as 0.6 percent. McDonald’s was up 0.1 percent at $99.88 as of 12:43 p.m. in New York.

‘Your Questions’

As part of its fight to stem the loss of customers, McDonald’s last year started a program called “Our Food, Your Questions” that invited Americans to pose inquiries about ingredients through social media. McDonald’s also created videos about how products like Egg McMuffins and Chicken McNuggets are created.

McDonald’s suppliers will continue to treat poultry with prescribed antibiotics but then remove them from the company’s food supply, said Marion Gross, McDonald’s senior vice president of North American supply chain.

McDonald’s poultry suppliers also will continue to “responsibly use” ionophores, which the company called a “type of antibiotic not used for humans that helps keep chickens healthy.”

“Consumers care more today than ever about where their food comes from and what’s in it,” Gross said in a phone interview from Las Vegas, where McDonald’s is hosting a “turnaround summit” with franchisees. “We think this will resonate across the board.”

Tyson Foods

Tyson Foods Inc., the largest U.S. chicken supplier, said it would work with McDonald’s to meet the new standards. Tyson has reduced the use of antibiotics effective in humans by more than 84 percent since 2011 and ceased using antibiotics at its 35 hatcheries late last year, Gary Mickelson, a spokesman for the Springdale, Arkansas-based company, said in an e-mail.

“The vast majority of the antibiotics used to raise our chicken are never used in humans,” he said. “We expect to continue reductions in our use of antibiotics that are effective in humans and encourage the industry to research alternatives.”

The move by McDonald’s, the world’s largest restaurant chain, may force other U.S. rivals to follow suit, and the growing demand would force suppliers to change how they raise chickens.

“We very much see additional companies following this lead as Americans become more concerned about what they put in their bodies,” Brett Hundley, an analyst at BB&T Capital Markets in Richmond, Virginia, said in an e-mail.

The National Resources Defense Council, an environmental advocacy group, agreed that McDonald’s plan could lead to industrywide changes.

‘Tipping Point’

“We may be at a tipping point for better antibiotic stewardship in the poultry industry,” Jonathan Kaplan, the director of the NRDC’s food and agriculture program, said in a statement. “Hopefully, chicken is just the start -- the Big Mac and the McRib may be next.”

The debate over the quality of McDonald’s food is familiar territory for Chief Executive Officer Steve Easterbrook, who took over the job from Donald Thompson this week after most recently serving as chief brand officer. Easterbrook earlier ran McDonald’s U.K. operations and during that time engaged in a televised debate with Eric Schlosser, an industry critic and author of the best-selling “Fast Food Nation.” He also set up a website, makeupyourownmind.co.uk, where customers can post questions.

Easterbrook was able to draw customers by marketing McDonald’s as a “sound and reasonable” dining option in Europe, but overhauling the company’s U.S. supply chain may prove challenging, according to Asit Sharma, an analyst at the Motley Fool in Raleigh, North Carolina.

McDonald’s “isn’t configured for sustainable, socially conscious food sourcing,” Sharma said in an e-mail. “Providing higher quality food is an economic quandary that Donald Thompson couldn’t solve and it remains a significant challenge for the management team.”

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McDonald's Corp.'s U.S. restaurants will stop serving chicken raised with some antibiotics in the next two years in a bid to regain diners that have fled to rivals like Chipotle Mexican Grill Inc. in search of healthier food.
McDonalds, chicken, antibiotics, restaurant
Wednesday, 04 March 2015 02:02 PM
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