The rising cost of living is playing out in the fast food industry at the expense of diners willing to pay more in their selections for guilt-free beef farming.
McDonald’s Restaurants head of impact and communications Simon Kenny revealed research about consumers’ beef-buying decisions during a New Zealand Roundtable for Sustainable Beef conference in Christchurch.
While McDonald’s was committed to its sustainable responsibilities, customers were not always prepared to pay more.
"Our customers aren’t banging down the door right this minute going ‘give me a more sustainably produced Big Mac’. They are kind of hoping it comes from New Zealand and we have been doing a lot of [work] telling them where sourcing is coming from, but when you get down to the more technical stuff around climate change, carbon and that, they are kind of going ‘that’s so far away from me I’m not sure that’s really influencing my purchasing’."
Environmental factors were less important for beef diners than maintaining a roof over their heads and the basics during the current cost-of-living crisis. The reality was people were paying more than $8 for a Big Mac now because of higher input costs, Mr Kenny said.
"The living wage went up nearly 40% in the last six years, so there’s labour costs and that type of thing. But in a cost-of-living crisis what our customers are saying is ‘gee, McDonald’s is getting pretty expensive these days compared with other places I can go’. We say at the moment as much as people think KFC and Burger King are our competitors, an air fryer is actually our biggest competitor."
The good news for beef consumption was about 68% of those surveyed were buying food outside their home that had beef in it at least once a week.
High in importance were taste (96%), value (95%) and portion size (89%). Less important were the source of beef (55%) and sustainably produced beef (51%).
Mr Kenny said the awareness of McDonald’s work to make beef production more sustainable was quite low, but when prompted customers felt "quite good" about it.
That showed there would be some benefit if they were told about the work, but it was not driving purchasing.
"If you get any sort of research around climate change and carbon emissions, the general public tends to drop off pretty quickly because it’s so complicated and they hope someone else is getting to it ...
"From McDonald’s perspective, with our global commitments, we know we need to accelerate change and do more. Just right now don’t expect customers to really want that and ... pay more for it."
When pushed, 75% indicated locally sourced beef was important followed by animal welfare at 55% and grass-fed cattle at 42%. The environmental impact on pastures and waterways was 38% and below that was lower carbon emissions and global climate commitments.
Mr Kenny said the research showed customers hoped McDonald’s was getting on efforts to combat climate change and sustainable farming, but at this stage would not give it much credit for it, or have drive their buying decisions.
McDonald’s has committed to science-based targets of global reductions in restaurant and office emissions by 2030 as well as scope 3 farm emissions for beef and chicken.
Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organisation.
The burger giant has been in New Zealand since 1976 and today has 170 restaurants in the country, serving about 1.6 million people each week.
In 2022, it spent more than $200m with local produce suppliers, while more than $380m of mainly beef was exported to mainly Asia and North American restaurants.
Globally, it buys about 2% of the world’s beef supply each year.
Mr Kenny said organisations such as roundtable were important for beef sustainability and McDonald’s wanted to be part of moves influencing its carbon footprint.
The company would continue to look at its scope 3 emissions profile. A significant piece of the puzzle was in land-use change and methane output.
