Will a Healthier McDonald's Menu and Mascot Makeover Help the Fast Food Giant?

The fast food chain is trying to win business from families with a new mascot and low-fat yogurt.

May 23, 2014 at 8:15AM

McDonald's (NYSE:MCD) management clearly believes that kids like vaguely creepy mascots.

In April the company revamped its Ronald McDonald clown mascot giving him a new outfit and naming the fictional icon a "brand ambassador." Now it has revamped marketing for its Happy Meal, adding a low-fat yogurt side dish option and introducing a new animated character the company has dubbed its "Happy Meal brand ambassador." The new creature, "Happy," is supposed to "bring fun and excitement to kids' meals while also serving as an ambassador for balanced and wholesome eating," according to the company.

The animated character looks like a Happy Meal box that has come to life, ostensibly to seek revenge on the children who have been eating its content for years. Happy joins The Fry Guys, The McNugget Buddies, and talking cheeseburger-turned-politician Mayor McCheese on the company's list of food-come-to-life personalities.

Happy

Though the purpose of the new mascot is pushing healthier choices, that has been lost on social media where much of the reaction has been negative toward the character. One Twitter poster using the McDonald's-created hashtag #happymeal tweeted pictures of the new mascot next to an especially maniacal-looking Gary Busey. Others posted various negative comments typified by @SamKamani who tweeted "In order to fight obesity in kids McDonalds introduces its new mascot to scare children."

Most of the comments were on the silly side, but the introduction of the character immediately following the revamp of Ronald McDonald shows a company that seems incredibly out of touch with today's kids. As the parent of a 10-year-old son more than happy to eat a Happy Meal on the rare occasions I allow it (I'm not a particularly restrictive parent, I just prefer taking him for higher-quality unhealthy food), I can say my son will in no way be influenced by a talking Happy Meal box. Add some laser guns, a rock soundtrack, and deliver health info in the form of a video game then maybe you might reach him. But quaint old-timey characters aren't going to cut it with most boys older than four. Today's girls are likely to be equally unimpressed, so essentially McDonald's has introduced a mascot that speaks to no one pushing products few kids would willingly choose over fries.

McDonald's tries to offer healthy choices

McDonald's attempts to make its menu appeal to health-conscious parents has so far included little more than shrinking the size of the fries offered in a Happy Meal while adding some apple slices. Now the company is adding a second healthier-than-fries choice as it has partnered with General Mills (NYSE:GIS) to offer a custom version of its Go-Gurt squeezable yogurt. The new 50-calorie low-fat strawberry yogurt will be made exclusively for McDonald's and it will have 25% less sugar -- about six grams -- than conventional Go-Gurt. Customers will have the option of selecting apples and yogurt, nixing the fries entirely ... a choice unlikely to be popular with kids.

Give McDonald's credit for trying and for acknowledging that regular Go-Gurt has too much sugar to be considered a healthy option. Still it's hard to see how the option of yogurt will be any more enticing than apple slices.

"It's good they're adding another option, but they've still got a long ways to go," Margo Wootan, director of nutritional policy at Center for Science in the Public Interest, told USA Today. "I'd be much more excited if they added more fruit or vegetable items." 

McDonald's has a difficult dilemma on its hands -- it has to pretend it believes that its appeal to kids comes from offering unhealthy food, an alternative to having to eat their vegetables at home. The company knows that you can put apple slices in every Happy Meal but you can't make kids eat them. It slyly acknowledges that fact in the press release touting the mascot and Go-Gurt additions.

"In March 2012, McDonald's started automatically including apple slices and a kid-size fry in every Happy Meal and Mighty Kids Meal. Since then, more than 1.1 billion bags of apple slices have been served," the company wrote.

Notice the use of the word "served" as the company clearly has no illusions they are being eaten.

McDonald's needs more customers

McDonald's has been having a difficult time growing sales due to increased competition from fast casual restaurants at lunch and dinner, along with the full-on assault on its breakfast business being made by Yum Brands' Taco Bell brand. For the first quarter comparable sales in the United States decreased 1.7%. That's hardly a disaster but the company's acknowledgement that the drop was due in part to "negative comparable guest traffic amid challenging industry dynamics" suggests McDonald's leadership knows that changes are needed.

The problem is that rather than making a commitment to improve the overall quality of its food, the fast food chain seems committed to meaningless changes. A mascot that tells kids about healthy eating may have been a good idea in 1984 but at least in the way McDonald's is executing it now, it's an outdated concept that won't change the behavior of any appreciable amount of kids. The same is true of adding yogurt. The intent is good but it's just window dressing to make it seem like the company cares.

To reverse its customer trends McDonald's needs more than frightening mascots and the vague appearance of not being a terrible choice of food to feed your children. That's of course a lot harder than slapping an animated mouth, arms, and legs on a Happy Meal box. It involves taking a hard look at your business and realizing that today's customers -- both kids and adults -- are smarter. Many of us won't just take our children to eat someplace because it's convenient or the food tastes good.

Smarter audiences require actual change, not just new gimmicks. McDonald's can change its fortunes but to do so it needs to change its business and stop thinking that a gussied up marketing effort will make people forget that burgers, fries, and chicken nuggets are bad for you ... even if they do come with a side of yogurt.  

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Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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