McAngus on the McMenu - McDonald’s goes premium

A 500-tonne sales boost to New Zealand’s Angus beef industry has been announced by an unlikely source this afternoon.

Fast food giant McDonald’s, which has 145 stores in New Zealand, today launched two new premium burgers to its menu – both based on high quality AngusPure beef patties.

The burgers, a likely push to gain back market share from the likes of Burger Fuel and Burger Wisconsin, will be available on the menu tomorrow.

McDonald’s has predicted it will buy an additional 500,000kg of Angus beef, which brings its annual beef total to about 5.2 million kilograms, up from 4.7 million in 2008.

For Angus beef breeders, the McDonald’s move has already paid off.

New Zealand AngusPure chairman Tim Brittain said the latest East Coast Angus bull sales saw average bull prices rise to about $6,000 per bull, up about $800.

“Not one bull was passed in during East Coast week,” he said.

He said the price for Angus steers and heifers at saleyards was also on the increase with the most recent at Frankton, in the Waikato, realising about 15c a kilogram more than non-Angus stock.

AngusPure is a brand attached to certified Angus beef, which attracts a premium for producers.

Marketed as a high-end quality beef product, AngusPure beef must be sourced from Angus steers and heifers sired by a registered bull, contain no hormones, be grass fed and processed by an approved meat processor.

Mr Brittain said the industry was excited.

“From an Angus point of view, we’re very excited that McDonald’s has chosen to use our beef at the top end of their menu,” he said.

“It’s huge for Angus and the breed. This dovetails in with the AngusPure programme to promote the beef at the fine dining end of the spectrum.”

NBR understands McDonald’s Australia is launching the Angus burgers at the same time, following behind a North American move at the beginning of July.

However, the New Zealand offering at McDonald’s will different from that in North American in terms of quality.

Mr Brittain said AngusPure was export quality beef and would not be blended with any lessor value products.

New Zealand Angus beef is being used in North American products, but is blended there with meat containing more fat to produce the final burger.

He said the New Zealand meat would have an 80-85% chemical lean value. Chemical lean is a technique to check the fat content of the meat.

Mr Brittain said less desirable meat was destined for the North American market to be blended with meat with a 50% chemical lean.

Silver Fern Farms and the ANZCO Group have been tasked to procure the Angus beef for McDonald’s.

Mr Brittain said AngusPure would undergo verification of the plants to ensure maximum traceability – essentially to guarantee that McDonald’s customers who order Angus, get Angus.

Alongside the more than 5,000 tonnes of beef produced by New Zealand farmers for McDonald’s NZ, a further 20,000 tonnes of beef is exported, mostly to North America, to be consumed by the chain.

In the US, the Wall Street Journal reported a round of burger wars beginning with rival chains Hardee’s and Carl’s Jr offering mail-in refunds to customers who claim the McDonald’s Angus burger is better than their own offerings.

Carl’s Jr has also presented The Big Carl to go up against McDonald’s Big Mac, the Journal reported.

McDonald’s has about 14,000 stores in the US against 1082 Carl’s Jr. and 1713 Hardee’s.

McDonald’s managing director Mark Hawthorne said customers’ desire for a premium product has not been altered by the current global financial crisis.

He said the company was confident the launch in New Zealand would be well received and the premium burger, coupled with McDonald’s value and convenience, would pay off.

In the US, he said sales of the Angus burgers had exceeded expectation and he was hoping for a similar result both here and in Australia with the same addition to the menu.

Mr Hawthorne admitted that premium burger chains Burger Fuel and Burger Wisconsin were firmly in his sights. The price points of $7.20 for the burger or $9.80 for a combination meal with fries and a drink were competitive.

The Grand Angus is described as a café-style burger with salad and cheese and the Mighty Angus with relish and bacon will both be presented on a premium sourdough bun.

He added the value of AngusPure’s existing marketing and availability in supermarkets in New Zealand was of benefit. Coupled with that, McDonald’s was to launch its advertising campaign today on TV, radio and outdoor billboards.

As an aside, Mr Hawthorne said sales of McDonald’s increased on the back of the All Blacks win over the Wallabies over the weekend.

He said sales traditionally spike in New Zealand on the back of a successful test the night before. Conversely, sales drop if the All Blacks lose.