McDonald’s Eliminates Trans Fats

McDonald’s Corp. has completed its long-promised conversion to frying oil with 0 grams of trans fats.

-- Restaurants and Institutions, 5/22/2008 12:20:00 PM

McDonald’s Corp. has completed its long-promised conversion to frying oil with 0 grams of trans fats. At the Oak Brook, Ill.-based company’s annual shareholder meeting today, CEO Jim Skinner said the blend of canola, corn and soy oils has been in use, previously unannounced for “a few months” for French fries, hash browns, chicken and its Filet-O-Fish. Skinner said the new oil blend is used for biscuits now and will be used for cookies and pies by year-end.

McDonald’s will open 1,000 new stores in 2008, Skinner (l.) said, a 20% increase over 2007. About 200 of the openings will be domestic; 25% of openings so far this year have been in China.

In discussions with reporters after the meeting, McDonald’s executives said that the chain’s Dollar Menu, which accounts for 14% of sales, is its most effective weapon against a soft economy. Although commodity costs are rising rapidly, “We know we can't pass on all those costs to our customers,” said Skinner.

Ralph Alvarez (r.), McDonald’s Corp. president and COO, said the Consumer Price Index for food away from home is “the best barometer” for gauging how much of a menu price increase the company can take. “We know we have to stay below food-away-from-inflation; we believe we can’t exceed that,” he said.

Don Thompson (l.), president of McDonald’s USA, told reporters that McDonald’s will be “very aggressive with value-priced beverages” this summer. He also said the chain’s Combined Beverage Initiative program is on schedule and won’t be slowed by the soft economy. Espresso beverages should be available in all U.S. stores by the end of 2009, with smoothies and bottled beverages to follow.

Thompson said the McSkillet Burrito added to the breakfast menu earlier this year is a permanent addition. That product was introduced to “help with our margins as well as to provide breakfast news.” Extensions of the burrito with other proteins are under consideration. “Our breakfast sales continue to grow faster than the rest of the day,” Thompson said.

Skinner said McDonald’s has no plans to reduce or curtail any activities in connection with the Summer Olympics in Beijing this summer despite threats of political protests at the Games.