Something Shocking Is Coming to the McDonald's Menu

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McDonald's calories
McDonald's (MCD) new ad campaign highlighting its "Favorites Under 400 Calories" isn't just an attempt by the company to highlight its healthier items during the Olympics; it's probably a preview of what's to come from restaurants around the country.

A provision in the Affordable Care Act will require some restaurants and other food vendors to display calorie information right on the menu. That has some companies, like McDonald's, trying to get ahead of the curve.

Since low-calorie food isn't normally a selling point at McDonald's, the company's using an age-old political move: Control the message, don't let it control you.

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McDonald's isn't ready to advertise that the Big Mac has 550 calories and an order of large fries has 500 calories, but it is hoping that showing it offers some options that won't exceed your daily calorie limit in a single sitting is the right move. The Filet-O-Fish (380 calories), Fruit & Maple Oatmeal (290 calories), and Egg McMuffin (300 calories) are currently highlighted in the campaign, and menu changes are rolling out.

You won't see calorie counts on every menu overnight. (The Food & Drug Administration is still making rules that will affect not only restaurants, but also vending machine owners.) What we do know is that a chain with 20 or more locations will have to comply with the new rules and display calories on its menus. At fast-food chains, that means calorie amounts will be listed on the menu board or drive-through sign, and at sit-down restaurants, that means it'll be listed on the menus you're handed.

From picking up your morning Starbucks (SBUX) to finishing your last beer at Fuddruckers, you'll be able to tally calories nearly everywhere you go.

I'll Have a Salad and Water Instead

The goal of the rule (like it or not) is to give consumers more information about what they're eating. The Department of Agriculture recommends a roughly 2,000-calorie daily diet for adults. That puts a quick meal at McDonald's or Buffalo Wild Wings (BWLD) -- where you can easily hit that daily allotment in a single sitting -- in perspective.

But will people change their behavior, or will restaurants be more conscious about the calories in their foods?

There is some precedent here. New York City has implemented rules about displaying calories, and individual companies have tried full caloric disclosure in the past. In 2005, Ruby Tuesday tested putting calories on its menu, only to later discontinue the practice. (Apparently consumers did change their eating habits when calories were displayed out in the open.)

The first to test displaying calories in a big way this time around is Buffalo Wild Wings. The company is putting calories on its menu now, well before the rule rolls out. It's a risky move -- will people avoid buying a 1,020-calorie Buffalo Ranch Chicken Wrap when they have that 2,000-calorie daily limit in mind?

McDonald's has a more proactive strategy -- in addition to displaying calorie counts, it is offering new, healthier fare for consumers who are overwhelmed to learn how many points are packed into a Big Mac.

We'll know in the next six months or so if the chain sees a big change in behavior or if people choose taste over waist.

Expert Cooks Up Recipe For Burger King as Newly Public Company
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Something Shocking Is Coming to the McDonald's Menu

Burger King (BKW) might still be home of the Whopper, but it's far from ruling the burger industry these days.

The fast-food restaurant ranks third among the hamburger giants: Last year, Wendy's (WEN) unseated the chain for the No. 2 spot, and it has never been in range of McDonald's (MCD), the undisputed leader, according to consulting firm Technomic.

Burger King's new status as a public company could give the place to "Have it your way" a fresh start, and energize its recent efforts to woo back shoppers, Steven West, an analyst with ITG Investment Research, tells DailyFinance.

The company returned to the New York Stock Exchange last week, its home from 2006 until 2010, when it was acquired by private investment firm 3G Capital.

3G's revival strategy for Burger King included its biggest menu expansion ever last year -- adding items from premium salads and frappe drinks to bacon sundaes -- and a star-studded national ad campaign that ditched its (arguably creepy) "King" mascot for celebrities like soccer star David Beckham and Jay Leno.

Fast-food lovers seemed to respond: For its most recent quarter, Burger King posted its best comp-store sales performance in more than two years.

But there's still work to be done at the No. 3 burger chain if it's going to take a bigger bite out of the fast-food market, West says.

In the battle for burger supremacy, McDonald's has been eating the competition's lunch for the past eight years, West says.

"They're on their second remodeling effort in the U.S., and they have definitely raised the bar when it comes to consumer expectations," he says.

Meanwhile, Burger King "has been trying for a decade to replicate the McDonald's playbook and has failed to do so."

But the IPO could mean a reversal of fortunes for Burger King. "Their new restructuring plan, the use of joint ventures and the procurement of financing through the IPO could spell good times ahead for the 'king of the Whopper,'" West says.

First, Burger King will use its newly public status to get its financial house in order, West says.

"In this case, the proceeds will be used to pay down debt, thus lowering interest expense, and helping with net earnings."

Then comes reinvesting in the business and stepping up expansion -- especially overseas. "Over the next few months, Burger King will see accelerated re-franchising of company-owned stores ... then accelerate unit growth both domestically and internationally, though about 80% to 90% of unit growth will likely be international," he predicts.

Burger King will "continue to bolster their menu offerings in the U.S." -- but new items must be "innovative" if the chain wants to win over more fast-foodies, West says.

That push should go hand-in-hand with beefing up customer service, he says. Indeed, new and more complex menu items, like smoothies, frappes and wraps, have slowed down its service because they reflect "new ingredients, new processes, etc., and thus take [workers'] time to become efficient at making them fast-enough for a drive through operation."

McDonald's has fancied up its units with store remodels that include new half-moon-shaped booths, wooden blinds and even flat-screen TVs, which have changed the popular idea of how a fast-food chain should look these days.

Hence, Burger King needs to spruce up its digs, too. "They need to remodel the store base," West says. "As McDonald's CEO says, 'You can't sell a $6 burger out of a $3 store.' "


Motley Fool contributor Travis Hoium does not have a position in any company mentioned. The Motley Fool owns shares of McDonald's, Starbucks, and Buffalo Wild Wings. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings, McDonald's, and Starbucks. Motley Fool newsletter services have recommended writing covered calls on Buffalo Wild Wings and Starbucks.

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