Green or Greenwashing? 6 Timeless Ideas McDonald's Taught Me This Week

What the Numbers Show

McDonald’s operates in almost 120 countries, feeds about 80 million people daily and produces 500 pounds (227 kilos) of fries per second. Its entire workforce reaches 1.9 million employees. It’s currently worth 200 billion dollars, but… how much is that exactly? Picture Qatar’s or New Zealand’s GDP. That’s how much McDonald’s is worth. Mind-blowing, I’d say. 

What About the Logo?

Despite being known for its golden arches worldwide, the background varies depending on geographical area. In most parts of the world, it’s red, but in Europe, due to increasing backlash over obesity rates, the company decided to change it to green to promote an eco-friendly and healthy image and improve its reputation. As well as that, in Sedona, Arizona, the arches are turquoise to preserve the town’s natural aesthetic red rock landscape. 

Background

The first McDonald’s shop was opened in 1940 in San Bernardino, California by the McDonald brothers Richard and Maurice. They soon realised that burgers were the most successful part of the menu, so they soon reinvented themselves and decided to change it to take the opportunity. Soon they were drawing a lot of attention and Ray Kroc, who later purchased the company in 1961 for 2.7 million dollars, opened the first franchise in 1954 in Illinois. I know what you’re thinking, if they’d just waited—it’s currently worth 200 billion! That means the company is now worth 74 thousand times what it was when it was sold. Sad, right? This reminds me of Starbucks, sold in 1987 for 3.8 million and currently worth 118 billion. Moral of the story: don’t sell your business for quick money; plan and look to the future instead. Mark Zuckerberg knew this and refused to sell Facebook to Yahoo for 1 billion in 2006. 

Marketing Strategies

We all know  McDonald’s didn’t grow this much relying on the taste of their burgers. So let’s dive deep into the marketing strategies they followed to become the world’s largest fast food company. 

The slogan, ‘I’m loving it’, is just the first layer of the cake. Contrary to what many believe, although influential, it’s not actually the reason for their success. 

Consistency, which means I can count on a BigMac tasting the same in Oklahoma as in Sydney, increases customer loyalty and encourages international expansion. 

It also adapts to cultures to appeal to local customers and keep them interested, like vegetarian options in India and McCafe Macarons in France. 

Have you ever wondered why they have play areas? This, alongside Happy Meals and children featured in ads creates a family-friendly environment, and therefore–you guessed it–increasing customer loyalty. 

Moreover, affordable meals increase customer traffic, especially during recessions. By doing this, McDonald’s is also trying to appeal to price sensitive consumers which leads to a wider customer base, and thus, more sales. 

Last but not least, loyalty programmes, like rewards, offers and app-exclusive promotions tempt customers to keep consuming, which traps them in an endless loop. Trust me, I should know. The Starbucks app has that effect, too. 

McDonalds—Burger or Real Estate Company?

Quick answer: both. Because there is a very small profit margin, McDonald’s can’t make 75 billion (including franchises) in sales annually only on 5 dollar menus. In fact, it has become so powerful and influential thanks to its franchises. To open your own McDonald’s, you pay a 45 thousand dollar initial fee, royalties (a percentage of your annual sales) and rent for the place. So the company is effectively receiving money from franchisees without doing a thing—AKA: passive income. It is arguably one of the best ways to expand your wealth once you’ve got the means and resources to do so. Because of this, 95% of McDonald’s fast food restaurants, or 43, 317 are franchised and only 2, 039 company-owned. Even after the massive cost both financially and logistically that franchisees endure, the number of franchises keeps increasing every year, which gives the business a strategic advantage.

McDonald’s has a green impact in the world

McDonald’s has emphasised its green achievements through marketing throughout the years. Some examples of this are water saving and energy-efficient systems and equipment. The restaurants also have LED lights, recycling bins and certified paper packaging like paper straws. Other ingredients, like palm oil, have also become less present.

McDonald’s is simply greenwashing

Some critics say that the fast food giant is not doing enough. Not only that, but they also believe it is greenwashing, which according to the Cambridge English dictionary, is defined as ‘behaviour or activities that make people believe that a company is doing more to protect the environment than it really is’. Sound familiar? Many readers will relate to the definition and agree, others will defend McDonald’s. That’s why we’re here: to analyse the evidence. Let’s get into it.

Firstly, its suppliers often engage in intensive farming practices to obtain beef from cows in a more efficient way that means cows often live shorter, harder lives. In my opinion, it’s not about strict measures like becoming vegetarian. But it makes me more environmentally-conscious to eat burgers with beef from cows that have lived long, happy lives with their own living space. Although you may be surprised by this, you shouldn’t: if that burger cost you 3 dollars, how is there supposed to be margin to include more eco-friendly beef? It’s impossible. So they’re not fooling anyone. You just have to look at the prices. 

Secondly, despite being ‘more sustainable’, palm oil is a threat to endangered species like orangutans and encourages deforestation, not to mention how it's considered terrible for one’s health. So maybe it’s sustainable, but as far as it can get. So why don’t they use sunflower oil instead? Well, because it’s expensive, and in order to keep prices low, they need to keep production costs as low as possible. All of this while the current child obesity rate in the US is 21% (although, to be fair, it now includes healthier snacks like salad or apple bites, but only after major backlash).

Both, then?

Speaking objectively, McDonalds is both green and greenwashing. Its policies have helped reduce their emissions. However, there are two main problems with this. One, it’s failing to address the root cause: 95% of emissions come from suppliers and not the company itself. So paper straws aren’t really gonna change anything if they fail to set different supplier standards. Two, some critics suggest all the measures have a small cost and allow McDonald’s to keep being profitable. Do they really expect us to believe colored trash cans are all a billion dollar company is capable of doing for the environment? The worst part is, we have. We have believed that story. We are just as gullible as they think we are.

I’d like to leave you with a thought. The business model McDonald’s has developed and the masterfulness in expanding throughout the years should be taught in business schools. There’s a lot we can learn from it, like consistency while adapting to cultures and family-friendly venues, among others. Nevertheless, their apparent inability to do something meaningful for the planet with a fraction of the money they make deeply disappoints me. Maybe I shouldn’t have expected better. I am of the belief that companies can both be immensely profitable and leave a good impact on society and the environment at once. They, of course, need to be willing to do so.