McDonald's (NYSE: MCD ) recently announced plans to start buying "verified sustainable" beef by 2016. This news was greeted by the media with skepticism. Time announced that "McDonald's Will Serve Up Sustainable Beef, Whatever That Is," and Salon wondered if the plan was "McFluff."
McDonald's seems caught between market research (which shows customers want sustainable beef), and media and public wariness about "greenwashing." The question is whether McDonald's can build customer goodwill by promoting complex long-term plans rather than sound-bite sized accomplishments.
Sustainability isn't standardized -- yet
McDonald's lack of a detailed definition and purchasing timeline comes from the fact that there is no industry or government standard for sustainable beef. A large part of this week's announcement highlighted McDonald's work with the Global Roundtable on Sustainable Beef, or GRSB, to craft a standard and then purchase beef that meets it.
The big story here is that rather than rely on poorly defined and unregulated catchwords to shine up its image, McDonald's, with GRSB, is creating a standard to which suppliers, processors, and restaurants can be held accountable. This goes beyond feel-good marketing and into work that could affect the beef supply chain from the farm to the drive-thru. That's because any tracking, animal-health, and input guidelines that come from the effort will affect the whole industry.
It's not a quick and easy project. Along with GRSB co-founders Cargill, Wal-Mart, the World Wildlife Fund, and social justice group Solidaridad, McDonald's has studied the issue since 2011. In his series on McDonald's beef project, Joel Makower of GreenBiz.com noted: "that McDonald's is putting a stake in the ground on beef years before it anticipates achieving its aspirational goal is notable. It also reflects the elevation of sustainability as a business issue within the world's largest hamburger chain."
People will believe it when they see it
Other chains tout their wholesome credentials without taking as much flak as McDonald's. Competitor Wendy's (NASDAQ: WEN ) and East Coast favorite Five Guys talk up their "fresh, never frozen" beef. Burger King Worldwide (NYSE: BKW ) promises that none of its beef comes from damaged rainforest land. But those are already done deals, not ambitious promises.
McDonald's already purchases Rainforest Alliance-certified coffee and Marine Stewardship Council whitefish, so buying demonstrably sustainable beef is a logical goal, but one that may not mesh will with social-media marketing, and short consumer attention spans. Instead of just slapping labels like "responsible" and "eco-friendly" on its current supplies, McDonald's is defining its goals before working toward them. This long-term approach is admirable but hard to convey to a busy public with a tweet or a press release.
What might these new sustainability standards look like? A look at the beef guidelines published last year by the Sustainable Agriculture Initiative, which McDonald's is also part of, shows the vastness of the issue's scope:
- traceability of animals from birth to slaughterhouse,
- a process to implement supply chain improvements,
- smart site selection,
- traceable animal feed,
- smart land management,
- careful handling of fertilizers, and
- a slew of other considerations, from animal health and worker welfare to long-term business viability.
Unless the general public is eager to delve into the issues of soil microflora, animal socialization, and supply chain management, this is much harder to convey than just saying something is "green." But the results of a transparent industry standard could have a global impact as parts of the beef supply chain gradually come on board.
Sustainability is bigger than soundbites
The GRSB will release its report in March, then McDonald's will create targets for sustainable beef buying. In the meantime, McDonald's has to walk the line it describes on its sustainability page, "to strike the right balance between what the science says and what our customers expect."
By working on an industry definition for sustainable beef, McDonald's and GRSB may go beyond mere marketing to give consumers a real decision-making tool. The trick for McDonald's, and any other company that wants to pursue a similar long-term goal, is serving up the concept in an appealing, easy-to-digest package.
The next step
Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you what you need to get started, and even gives you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.