McDonalds Move to Freedom Food Pork - Understanding What matters to Consumers

A look at food sourcing policies of major companies provides useful clues about what matters to consumers.

Such companies spend tens if not hundreds of thousands of pounds tracking consumer trends and are keen to adopt those which they think will make a difference to the way they are supported by the public. It is therefore interesting to see that McDonalds have committed to serving only RSPCA Freedom Food pork. A call to the McDonalds helpline confirmed that by pork they mean their bacon and sausages.

Whether or not you happen to be a supporter of the RSPCA, particularly their recent overtly political moves on hunting prosecutions and stance on badger culling, there is no doubt that the Freedom Foods logo and standards appeal to the public, and are becoming more widely used. Sainsbury for example is a huge supporter of Freedom Foods chicken and pork based products, and charges a premium for them.

Sainsbury though is positioned as one of the more upscale supermarkets, selling pricey food. McDonalds aims at the value end of the market, yet they have sufficient belief in the appeal of higher welfare to incorporate such foods on their menu, despite the added cost this presents along the chain.

We do not know who bears the cost, and whether consumer prices have nudged up, or McDonalds take a hit on margin, or indeed the producers and processors are squeezed.

What we do know is that this commitment to providing more than basically produced food is a thread that has been running through McDonalds for some time. They still use only organic milk and eggs. They came out very well in the recent horsemeat scandal because they only use beef from UK or Irish farms. 

Their move to Freedom Food pork will mean that they see animal welfare as of sufficient interest to their customer base to make the change worthwhile in business terms.

The McDonalds move does not necessarily signal that consumer demand will lead to an upgrade of pig welfare standards across the whole food industry. But it does suggest that concern for animal welfare is no longer a niche issue.

Note to McDonalds's marketing department - the advert would have been much stronger if it referred to bacon and sausages, not pork which tends to mean chops or a roast.

Buying British - Catering Companies Letting the Side Down Badly

Unlike supermarkets, catering companies are not obliged to tell the public where the food they sell every year actually comes from. So you and your family could be eating anything from anywhere, and produced to heaven knows what standards.

Quite apart from the standards question, it is depressing to see that so many catering companies, even the big ones, do not wholeheartedly support British farmers and growers.

Trawling through profiles of some of the larger businesses we find that:

Compass Group, the biggest catering suppliers in the world, use 100% British for their fresh beef, milk, and eggs. All their root veg comes from Britain “where seasonality and quality allow”. They do not claim that their chicken is British, but use the words “British Farm Assured”, which may mean it is produced in Britain. We do not know where they get their pork, bacon and ham from, or their dairy products apart from milk, or their lamb.

McDonalds’ goes for dual sourcing, buying milk (all organic), eggs, (all free range), beef, pork and oats from both Ireland and Britain, probably to benefit from the effects of currency exchange.  100 tonnes of the 440 tonnes of apples they use in their fruit bags are British. We do not know where their chicken comes from.

Wetherspoons the pub chain have 100% British beef in their burgers. All the pork in their sausages is British, as are their potatoes. Their eggs (all free range) “carry the British Lion quality mark”. Again, it is not clear whether the eggs are produced in Britain.

 About 40% of KFC’s chicken is imported, with the rest coming from Britain. They have just put the Red Tractor logo on their on the bone chicken.

Gregg’s, noted for their pies and sausage rolls, provide no details of where their food is produced but have committed to issuing an ethical sourcing policy this year.

Subway, now said to be the biggest fast food chain in the world, also has nothing about sourcing in its literature, but is reported to get their turkey from Brazil, and their chicken from 5 different countries – Thailand, plus 4 in South America.

The most transparent company found is Pret a Manger, the £350million turnover purveyor of extremely high class sandwiches. On their website you can find details of where every ingredient they source comes from.

Their chicken is UK sourced, to higher welfare standards, as is their ham, bacon, organic milk, and free range eggs “if we can get them”. Their beef though comes from southern Ireland, as does their cheddar, and their butter from France!! But though it is possible to cavil at a company which for some reason won’t buy British beef, cheese or butter, at least we know a fair bit about what we are eating.

So some caterers make more of an effort than others, but clearly there is a lack of commitment by catering companies to buy British, and it is disappointing. The market for food and soft drinks eaten out is worth £43 billion. Supply to catering companies would be a welcome boost to demand at a time when consumers are cutting back on the amount of food they buy from the shops.

Credit Crunch and the Catering Trade

The UK catering market, sometimes called food service, is big but woefully under-reported. Whilst goings on in the grocery trade seem to be analysed almost daily, figures about performance in catering are difficult to find.
Yet,having some understanding of sales may be helpful for producers to gauge whether demand is rising or falling and to take a view on likely future prices. For the many producers selling direct to catering outlets, this understanding becomes vital,not only to assess impact on demand and prices, but to monitor the trading performance of their customers to avoid bad debts.
So here's a go at pulling together available data.
First, not all catering outlets will see a change in demand. Schools, hospitals, prisons, care homes, will still need to feed those they look after. But local authorities work to a strict budget, and may change the type of food they offer and bargain over prices paid to suppliers.
In the profit making sector, there is evidence that the cheaper or budget end of the restaurant market is doing well. McDonalds Europe reported that its sales for May were 9.6% ahead of last year, with the UK believed to have done even better.
At the other end of the spectrum, the Guardian contacted 8 of the smartest restaurants in London and only one had a table for 4 free at 8.00 on a Saturday before the end of July.It is the middle ground, outside of London which seems to be suffering. The Cumberland News reported on 3rd June that Carlisle had seen a slump in diners and that a number of eateries had closed.
Restaurants and eating places located in out of town shopping malls will be struggling. The Financial Times yesterday reported a survey by Experian, the market research company,which found that 5.8% less people visited such malls in June, as consumers, spooked by high petrol prices, decide not to travel. The survey also found that traffic in town centres had fallen by 1.8%. Eateries are bound to be affected.
The picture in pubs is mixed, as are views about whether the smoking ban has been a good or bad thing for food sales.J.D Wetherspoon has reinvented itself as an all day food provider, and recently reported rising food sales, although bar takings were down.Whitbread also seems to be defying the gloom. In the 13 weeks to 29th May their Beefeater and Brewer's Fayre chains grew by 3.6%. Mystifyingly, their Costa Coffee shops, despite purveying extremely high priced coffees, grew by 6%. Other good news from catering operators is thin on the ground though.
An email from a market researcher with the new meat levy board says that in the early1980's recession catering was worse hit than grocery, and that eating at home increased particularly at lunchtime. Some work they have done with consumers recently indicates that they intend to eat out less, and it is likely to be pubs which suffer most.
So catering businesses are facing a difficult time. But as ever, whether premium budget or somewhere in between, those giving great food, great service and value for money (which is not the same thing as cheap), should weather the storm.