You want apples with that?
Rather than ask parents that question, McDonald's Corp. is going to fill its Happy Meal boxes with apple slices and smaller portions of French fries starting in September.
The automatic inclusion of a quarter-cup of apples—without McDonald's customary caramel dipping sauce—and the dialed-back fries are the company's latest moves to fend off more regulation of what kids eat.
The food industry has come under increased scrutiny recently as childhood obesity levels have risen. San Francisco last year banned the inclusion of toys in kids' meals unless the meals meet certain nutritional criteria, including the presence of both vegetables and fruit. A similar ban is on the table in New York City.
In April, U.S. regulators proposed voluntary standards for food makers when marketing to children. Food marketed to kids aged 2 to 17 would have to contain healthy items and limit sodium, sugar, fat and calories, according to proposed guidelines by the Federal Trade Commission, the Food and Drug Administration, the Centers for Disease Control and Prevention and the Agriculture Department.
In May, more than 550 health professionals and organizations called on McDonald's to stop marketing "junk food" to children and to retire Ronald McDonald, the chain's clown mascot. The company responded that Ronald isn't going anywhere—nor are the toys.
"That's the most fun part," McDonald's USA President Jan Fields said of the Happy Meal toys during a webcast announcing the apple move. "That's what makes it happy."
While McDonald's won't ditch the toys, the company is trying to make its meals healthier. "From a business standpoint, it is something we need to do to protect that business," Ms. Fields said in an interview. "Clearly, this is the way people are moving—we have a health-conscious society. We're in business for the long term, and we have to evolve as we move forward."
Whether the changes will attract parents who otherwise wouldn't bring their children to McDonald's remains to be seen. Happy Meals account for less than 10% of McDonald's U.S. sales, but the company declined to disclose whether they have been growing. Market research firm NPD Group has found that orders for fast-food kids' meals have been declining since 2003 as gadgets for children have become more sophisticated, making the included toys less desirable.
In addition, as the economy soured, parents found they could come out ahead by ordering adult-size items off the "dollar menu" and splitting them between two children rather than buying two kids' meals.
Kids' meal orders at fast-food restaurants have declined 15% since 2006 to just under a billion, while dollar-menu items ordered by or for kids have increased 29% in the last five years, said NPD restaurant-industry analyst Bonnie Riggs.
This isn't the first time McDonald's has bowed to pressure to make its menu items healthier. In 2008 the company announced that it had switched to a transfat-free cooking oil for all of its fried food, including French fries, amid criticism that the ingredient leads to clogged arteries.
McDonald's has made numerous other changes to its menu over the years in an effort to position itself as a healthier fast-food chain, including adding new salads, oatmeal and smaller portions of dessert, like the snack-size McFlurry ice cream treat.
Apple slices have been offered as an optional substitute for fries in McDonald's Happy Meals since 2004, but the company found in its tests that parents also wanted fries and chose apples only 11% of the time.
"Making [apples] a forced decision is a pretty unusual thing for a restaurant to do," said Jonathan Marek, senior vice president at Applied Predictive Technologies, which helps restaurant companies test how various business changes alter customer behavior. He says his firm wasn't involved in McDonald's tests of new Happy Meals."If they can get to a place where parents associate them with healthy offerings in a world of increasing fast casual options that are perceived as healthier, that will be good for them," he added.
"We did one test without fries, and that did not go well at all," Ms. Fields said. "We also looked at reducing the number of chicken nuggets to three from four, and that didn't go well either. Parents bring their kids there as a treat, and fries are important."
The latest changes won't be enough to allow McDonald's to include toys in its Happy Meals in San Francisco, but Ms. Fields said the company views that city's requirements as extreme. McDonald's chose not to add a vegetable as well as fruit to the Happy Meals because, she said, it would "probably exceed what a child would be willing to eat."
She said the company would decide on a case-by-case basis whether to change its offerings as individual markets adopt legislation, but added, "as a national chain, it's far easier and more efficient if we do things nationally than when we have to start doing things for individual markets."
The move will cost the company money up front as it buys more apples, changes its packaging and boosts its nutrition-related marketing. Ms. Fields said the cost is "still confidential," but the company won't ask customers to foot the bill. "It's not my expectation that we adjust Happy Meal prices based on adding nutritional items like apples," she said.
McDonald's estimates the changes to its kids' meals will reduce the calories in its most popular Happy Meals by 20%. Happy Meals currently contain 2.4 ounces of fries; the new meals' portion size will be 1.1 ounces. Customers who don't want fries can request two bags of sliced apples. McDonald's will also start offering fat-free chocolate milk and 1% low-fat white milk with its kids' meals.
The meals will roll out in California first and then be available in all 14,000 U.S. restaurants by next spring. Messages about proper nutrition will appear in all marketing aimed at kids as well as on merchandising and Happy Meal packaging. McDonald's said it also plans to provide funding for grass-roots nutrition-awareness programs.
The Center for Science in the Public Interest, an advocacy group that has pressured McDonald's in the past, lauded the Happy Meal changes as a step in the right direction but said, "McDonald's clearly has a lot more to do, for both kids and adults."
McDonald's said it plans to reduce added sugars, saturated fat and calories across its menu in the next nine years by reducing portion sizes and reformulating recipes. The company will also reduce sodium in all of its food by an average of 15 percent by 2015.
In recent years, McDonald's has also added healthier items to its Happy Meals in other markets. Its restaurants in Latin America offer the option of vegetables in Happy Meals, and it announced on Tuesday that starting in October, it will add a serving of fresh fruit, which will change according to the season.
In France, there are more than 300 possible kids' meal combinations that including a rotating menu of choices ranging from cherry tomatoes to pineapples to melon slices. In Italy, McDonald's offers kiwi on a stick. Happy Meals in Australia now also include apple slices, and many Asian countries offer cups of corn in their Happy Meals.
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