Tuesday, October 31, 2006

BK to beat McD in eliminating trans fats?

Think President Bush knows pressure? Consider whoever is charged with securing a trans-fat-free fryer oil that McDonald’s could roll into its domestic operations. The quick-service giant pledged three years ago to swap its partially hydrogenated oil for a medium that would eliminate a widely recognized health risk to customers. Yet, as CEO Jim Skinner has said, it still doesn’t know when the changeover will come.

Meanwhile, the public has watched a flurry of competitors raise their hands to pledge, “I’ll do it right now.” Wendy’s said in August that it was switching. KFC chimed in on Monday. And now Burger King is giving franchisees the heads-up that it’ll move toward a changeover within the next 90 days, starting with tests in selected units, according to a report in The Wall St. Journal this morning. The publication apparently interceded an e-mail that was sent to U.S. franchisees, disclosing steps to beat McD’s in switching.

And McDonald’s? Well, it did change the oil of all 740 of the chain’s outlets in Australia.

Of course it’s a bit tough for a chain of McDonald’s size to find sufficient supplies of trans-fat-free oil. It has in the neighborhood of 14,000 restaurants in the U.S., or more than Wendy’s and KFC combined, or about double the store count of BK.

Yet all of them are securing the oil. What’s the advantage of being the 500-pound gorilla when you can’t lock up supplies of scarce, valuable resources, at a cost that smaller jungle-mates can’t negotiate?

So that poor soul who’s leading the procurement effort must be looking a lot like an especially nervous Don Knotts these days. You can only hope that he or she has invested in some soybean farms along the way, because McD’s alone could make that a boom business.

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