OBESITY CONCERNS: BURGER KINGS PRODUCT REVAMP

By: Shivika Kanchan Shivani Maheshwari ShrutiDesai Shailesh Gupta Raunak Jain1

SYNOPSIS
With rate of obesity levels reaching alarming levels in America, fast food companies attracted consumer resentment on a large scale. Like other fast food companies in US, Burger King was also sued, for making Americans obese with its fatty foods. Although the lawsuits were dismissed later, the company realized the importance of assuming a healthier image. It initiated efforts to makeover its menu by introducing a new line of low-fat food items. The company also reintroduced its 1974 slogan, Have It Your Way, which denoted that consumers could customize their items as per their requirements.

OBJECTIVES
To discuss how the rising obesity levels put pressure on the food industry to respond and change their offerings

To discuss the series of initiatives that Burger King has taken to refurbish its image and meet the changing customer demands.

INTRODUCTION
In 1999,US federal agency Centre for Disease Control and Protection researched that 61% of US adults and 15% children were found to be obese. In mid-2002 lawsuit was filed against 4 fast food companies which was later dismissed. This led to decline in sales of fast food chains as McDonald Corporation and Burger King corporation.


Burger Kings sales in US slumped from $10.3 billion in 1998 to $7.75 billion in 2003. To combat the situation Burger King went to revamp its strategy and re-introduced its slogan Have it your way in a new way.


Various scientific studies proved that fast food acted as an alarming threat for human health. Obesity solely led to death of 4,00,000 people in US annually. Inclination towards fast food was mainly due to its tasty, cheap and readily available nature. It shifted the focus from individual responsibility to social responsibility. Super size bags and value meal packs gained popularity.

VISION
We proudly serve the best burgers in the business, plus a variety of real, authentic foodsall freshly preparedjust the way you want it.

MISSION
We will prepare and sell quick service food to fulfill our guest's needs more accurately, quickly, courteously, and in a cleaner environment than our competitors. We will conduct all our business affairs ethically, and with the best employees in the mid-south. We will continue to grow profitably and responsibly, and provide career advancement opportunities for every willing member of our organization.

OBESITY AND FAST FOOD INDUSTRY

Average portion size in America grew : Soft drink sizes grew by 50% Hamburger portions increased by 23% French fried potatoes increased by 16%. Increase spending on advertisements to attract more customers. Obesity was not only prevalent among adults, it was also widespread among children.

OBESITY AMONG CHILDREN

3 major factors:Increase in portion sizes Availability of foods and beverages at schools Discontinuation of physical education Targeting advertisements at children Fast food companies attracted a lot of criticism from weight-watchers and parents of obese children.
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PREVALENCE OF OBESITY (AGED BETWEEN 6-19 YEARS)

20 %

15 %

Age 6-11

10 %

5%

0%

1963-70

1971-74

1976-80

1988-94

1999

Source: Physical Activity Fundamental To Preventing Disease

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REASONS FOR OBESITY AMONG CHILDREN

% 90 80 70 60 50 40 30 20 10 0

Source: Low Carb: The New Fat Free?

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PUBLIC OUTCRY AGAINST FAST FOOD COMPANIES In mid-2002, a New York City lawyer filed a lawsuit against the 4 big fast food companiesMcDonalds Corporation Burger King Wendys KFC Corporation Argued that chains are deceptive in posting the nutritional information.

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Analyst opined that there were some important similarities between smoking and overeating. Felt that lawsuits against them would adopt a similar approach to that used against tobacco firms. Awareness about obesity-related problems increased. With the rise in obesity-related health problems, Americans started blaming the fast food chains for promoting high fat and high calorie foods with less nutritional value.

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Sales started declining. New business called fast casual started gaining popularity. Observed that spending on natural and organic food was also increasing. Initiation of an image makeover by focusing on health food segment. By mid-2004, revenues of companies were growing at a faster rate due to the newer healthier options they provided to their consumers.

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THE IMAGE MAKEOVER

TO

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YEAR 2000
No change in food menu or taste. New policy of chiding consumers that workers could identify as being obese.

Overweight patrons were given incentives to either purchase healthier items on the menu or suing some other major corporation.

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YEAR 2002
Rated as the worst fast food provider by centre for science in public interest a washington based health advocacy group. Top five worst fast food list, 1. BK old fashioned ice cream shake. 2. BK fries 3. BK hash browns 4. BK double whopper with cheese 5. BK value meals

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Developed special menu items for diners who were conscious of their calorie, carbohydrate and fat intake. Introduced new line of low-fat ,fire grilled baguette style sandwich. Signed up celebrities like chef rick bayless to endorse new sandwich. Whopper burger remained the same.

YEAR 2003

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Introduced a low carbohydrate version of whopper hamburger omitting the bun which had 3 grams of carbohydrate compared to 52 for a regular whopper. Crticswont be a big segment it wont last long same price unappealing

YEAR 2004
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New salad line with a pouch to keep meat or seafood toppings hot. Offered more variety of fruits, vegetable & yoghurt options. After changing five advertising. companies, BK hired crispin porter + Bogusky. Re-introduced its 1974 slogan Have it Your Way as a symbol of customized items as per the consumer.

CONTD
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INNOVATION
Seeing market getting increasingly cynical and detached a New ad campaign was launched to get personal with the customer. This featured young office workers showing the competition with each other of coming out with a unique innovative sandwich. Company also designed No Make Fun Policy. New interactive nutritional information on each menu item.

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EFFECTS OF THE MAKEOVER

Sales at restaurants increased by 7.3%. Have It Your Way slogan had helped in increasing the same store sales by 4.4%.

Experienced sales growth of +9% post makeover.

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RECOMMENDATIONS
Expand International Platform. To Introduce New Products. Reduce Cost Of Entry For BK Franchise.

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THANKS EVERYBODY FOR BEING PATIENT

Have It Your Way
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