OAK BROOK, Ill. (July 2, 2009) McDonald's long-awaited rollout of the Angus Third Pounder places the quick-service giant squarely on the front line of what is rapidly heating up into a premium burger war.
McDonald's new line of hamburgers, which are made with a third-pound of Angus beef, marks the chain's first new burger rollout since 2001. The new burgers, which have been in test in several markets for two years, are expected to compete with the Original Six Dollar Burger offered by CKE Restaurants' Carl's Jr. and Hardee's chains, and Burger King's Steakhouse XT Burger well as larger burger selections featured by chains like In-N-Out Burger, Fatburger, Smashburger, The Counter and Five Guys.
The move to offer premium burgers also seems to be cutting across foodservice segments. While quick-service and fast-casual competitors are offering larger, higher-end choices, fine-dining operators like Bobby Flay, Marcus Samuelsson, Laurent Tourondel, Hubert Keller and Danny Meyer also are getting into the action by opening burger-centric concepts around the country.
Flay, who launched his Bobby's Burger Palace chain a year ago, already has four outlets operating in the Northeast.
Danya Proud, a McDonald's spokeswoman, said the Angus burgers will be available in three variations: the Deluxe, with American cheese, lettuce and tomatoes; Bacon & Cheddar; and Mushroom & Swiss. She said the burgers would be priced at $3.99, "give or take, depending on the location."
The Angus burger, which has been in test for a couple of years, will be available at all U.S. outlets for the next several months, Proud said. McDonald's has about 14,000 U.S. units
"It was not introduced as a core menu item, but we will be evaluating it. It will continue to have a role on the menu," she said.
And while Proud acknowledged that McDonald's officials had been following the competition's shift toward offering larger burgers, she said, "The company's focus is on our customers and our business.
"Over time we've seen that Angus beef has generated more widespread appeal," she continued. "To get an Angus third-pound burger at less than $4 is a tremendous value. [In addition to the premium beef] we are using very high-end ingredients, like thinly sliced Swiss cheese and an artisan-style roll."
Proud also rebuffed reports that the rollout had sparked widespread pushback from franchisees who were concerned that launching a higher priced premium hamburger product during the recession would be a mistake -- particularly while the chain rolls out its McCafe line of premium coffees.
"The franchisees told us they couldn't get it in their restaurants quickly enough," she said. "I think people misconstrued things. During the early stages of the test we were using a slightly bigger burger that would have required new equipment. But we went to slightly smaller burgers that can be prepared on existing grills."
Irwin Kruger, whose company, ISK Manhattan Inc., franchises four McDonald's outlets in Manhattan -- including the sprawling 17,500-square-foot McDonald's in Times Square -- has been testing the Angus burger for two years, and says it has been a "big hit" with customers.
"Initially, because of the larger size of the patty, it required some grill modifications," he said. "But that was resolved with the change in size."
The Angus burger test in New York was supported with a local marketing promotion that included billboards, he said.
"It has been very well received," Kruger said. "Customers that have larger appetites and are looking for a premium burger love it. It's a natural fit for our menu."
McDonald's Corp. operates about 31,000 units around the globe.
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