McDonald's has unveiled a new growth strategy called 'Accelerating the Arches' that includes a refreshed purpose, updated values and growth pillars that build on its competitive advantages.
The growth pillars include maximising marketing by investing in new, culturally relevant approaches to effectively communicate the story of brand, food and purpose and committing to tapping into customer demand for the familiar and focusing on serving “delicious” food. The chain is also doubling down on digital, delivery and drive-thru experience by leveraging competitive strengths and building a powerful digital experience growth engine that provides a fast, easy experience for customers, it said in a statement.
McDonald’s also revealed its renewed purpose, which is to feed and foster the communities the fast-food chain and its franchisees serve around the world. Through both actions and communications, the company is looking to make an even greater impact by focusing on four areas that matter most to communities: responsibly sourcing quality ingredients, driving climate action to protect the planet, connecting with communities in times of need and increasing focus on equity by providing opportunity for restaurant staffers.
This purpose translates into action through support for farming communities, an aim to source 100% of packaging from renewable, recycled or certified sources by 2025, donating millions of pounds of quality food from its supply chain and restaurants to neighbors in need in 2020 and reducing barriers to employment for more than 2 million people worldwide.
McDonald’s VP of global communications Michael Gonda said that with new leadership hires, such as the appointment last month of Katie Fallon as EVP and chief global impact officer, this feeds into the new strategy “this is the beginning of a new chapter for McDonald’s.”
Previously, McDonald’s purpose and values were “intangible,” said Gonda.
“There had been attempts previously to articulate those, and this felt like an opportunity where they needed to be translated to a more contemporary language,” he said. “We knew what they were, but we needed to bring it from Shakespearean to modern day English. We needed to clearly establish what our role is beyond the product we sell and what are the behaviors that let us fulfil that.”
For the past year, McDonald’s leadership has been working with franchisees, employees, restaurant staffers and suppliers worldwide to define its purpose and figure out what actions and areas matter most to customers. That led McDonald’s to the simple premise that it feeds and fosters communities, Gonda said. The purpose gives the brand a clear direction going forward, he added.
McDonald’s renewed focus on its purpose will also come to life in a new campaign called 'Serving Here'. The campaign will demonstrate the company’s values and illustrate its commitments to the communities, customers, crew, farmers, franchisees and suppliers it partners with and will be animated with actions in its top markets.
The integrated communications campaign spans marketing, paid media and owned channels. A letter from president and CEO Chris Kempczinski to 110 local communities around the country will appear in local newspapers.
“We are grounding our customers in our purpose and in the areas we will have great focus,” said Gonda. “When we think about our 65-year history, this answers the question: What’s next?”
McDonald’s will air three 30-second ads and a 60-second manifesto spot for the 'Serving Here' campaign. One spot shows a day in the life of a local farmer as he harvests potatoes that will be served at McDonald’s. Another shows a family’s journey through childhood illness, showing how Ronald McDonald House Charities can keep a life-changing diagnosis from changing everything about a child’s life.
The changes at McDonald’s follow the company’s decision in July to refresh its values to fight systemic racism and discrimination by putting customers and people first, opening its doors to everyone, doing the right thing, being good neighbors and getting better together.
Purpose will guide communications
The purpose not only sets a direction for McDonald’s actions; it will also guide the company’s communications, helping McDonald’s reassert what it is as a brand in a way that resonates authentically and emotionally with customers.
“When we are working toward building trust, customers want to understand what are the values of that brand, what are the causes they support and do those align with mine?” said Gonda. “So we are taking a long, hard look at how we modernise our comms to more clearly and effectively communicate the value and causes we stand for.”
McDonald’s needed to improve the way it communicated its purpose vision, so the company brought on R/GA to help it overhaul legacy platforms such as McDonald’s corporate website, explained Gonda. The revamped site will go live this week. It also tapped Weber Shandwick and Brunswick Group to help McDonald’s with corporate and customer comms, as well as Interpublic Group brand experience agency Jack Morton and creative shop Weiden + Kennedy for the purpose strategy launch.
McDonald’s also works with Golin, WE and Purple Strategies.
McDonald’s has more than 39,000 locations in over 100 countries. Approximately 93% of McDonald’s restaurants worldwide are owned and operated by independent local business owners.
The brand reorganised its global communications team this year into three core areas to drive business impact and deliver business value: strategies and campaigns, focused on food, people and planet; core capabilities, comprising strategic communications, media relations and international comms; and inputs, which includes insights and issues.
Another change to the comms team came last month, when McDonald's hired Fallon to lead a newly created global impact team focused on purpose. Her direct reports include Gonda; VP of US communications Dave Tovar; VP of sustainability Jenny McColloch; and VP of government relations Genna Gent. Fallon is managing McDonald’s relationship with Ronald McDonald House Charities.
McDonald’s Q3 performance beat analysts’ expectations, with same-store sales up 4.6%. Net sales were down 2% to $5.4 billion, but the chain posted net income of US$1.8 billion, up from $1.6 billion the prior year.
The brand also said on Monday morning that it is planning to test a meatless burger in several markets in 2021 as it adds “McPlant” menu offerings.