Fast food companies facing fight to win trust of millennials

Those born between 1980 and 2000 are big spenders, but McDonalds and others will fail to win their custom if things don’t change

 In April 2014, McDonald’s announced Ronald McDonald will take an active role on social media for the first time. Photograph: AP

Growing up in communist Poland in the 1970s, processed food was a luxury and western brands were a treat that could only be bought in government-approved shops.

When I moved to England in 1980, my whole world changed. Food, as I knew it, was different. Besides there being no food queues, the real revelation was fast food restaurants such as McDonald’s and Burger King. At this time, the links between processed foods and obesity were tenuous but gradually, with documentaries such as Super Size Me openly criticising food and beverage companies, the danger of processed and fast food began to reach the public consciousness.

Since the 1980s, we have almost seen a doubling of obesity worldwide. According to the World Health Organisation (WHO), 65% of the world’s population live in countries where being overweight or obese kills more people than malnutrition and in 2013, 42 million children under the age of five were overweight or obese.

Will McDonald's ‘sustainable beef’ burgers really be any better?

Read more

At the same time, there’s the emergence of the next demographic – millennials. Born between 1980 and 2000, their annual spending is an estimated $2.45tn (pdf) and, by 2018, is projected to reach $3.39tn. This is a group of consumers that cannot be ignored. Millennials have different attitudes to life and, in this instance, food. They like to make “wellness” a daily part of their lives, and are more likely to try to maintain healthy eating habits, placing priority on freshness, quality and ingredient transparency.

Yet, in the past 35 years, obesity among millennials has tripled from 8% to 24%, driven by a significant drop in exercise and a general lack of knowledge on serving sizes and appropriate calorie consumption. Millennials are time-starved, making eating on the go and snacking common.

Millennials are also digital natives, born into a world in which social media makes up a huge part of their lives. Research from Stanford Bernstein’s 2013 Food Survey shows that individuals most active on social media tend to be the most distrustful of the food system. As a result, they are sceptical of the nutritional information made available to them, believing it to be influenced by corporate interests.

Two casualties of millennial distrust are McDonald’s and Coca-Cola, both of which have experienced a steady drop in sales volumes. McDonald’s, in particular, saw earnings fall 30% in the third quarter of 2014.

McDonald's finds lovin' in short supply as sales fall for ninth straight month

Read more

The fast food chain has attempted to address its brand problem and lure millennials back by launching various programmes that, for example, allow customers to customise their menu by choosing toppings and ingredients. It has also launched a social media campaign called Our Food. Your Questions, which allows people to ask questions about how McDonald’s food is prepared, sourced or what it contains, via Twitter or Facebook. More recently, it asked ad agencies and media companies to find ways to speak to millennials’ philanthropic priorities.

Fellow American fast food chain Wendy’s has also acknowledged the importance of millennials. Last year, Wendy’s CEO, Emil Brolick,claimed “the transformation of the Wendy’s brand is essential … to establish credible relevance with the millennial generation”. It recently supported the launch of its Preztzel Bacon Cheeseburger with online marketing campaign#PretzelLoveSongs. 

The Mexican grill fast food chain, Chipolte, has been using non-traditional media to attract millennials, including a short film and smartphone game.

The food and beverage industry is responding too. Following the publication of the WHO Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013-2020 report, the food and beverage industry has, via theInternational Food and Beverage Alliance (IFBA), announced it will step up its efforts and commitments on health, wellness and diet-related health issues at a global level.

This seems like an effort to self-regulate and suggests the industry is willing to invest in product formulation and innovation, improved consumer information and more responsible marketing, as well as the promotion of healthy lifestyles.

In the US, the Dietary Guidelines Advisory Committee has issued a report calling for a major revamp of nutrition guidelines as a means to tackle obesity in the US. Although this may not lead to regulation, it places food and beverage companies on the defensive in proving that their products should not be taxed.

If fast-food companies are to remain future-proof they must innovate faster, beyond tinkering around the edges. It’s not enough to emphasise specific nutritional benefits of products that may still be laden with sugar, fat or salt. Millennials are asking for real change, and the winners of the future will deliver it now.