Here’s Why “Antibiotic Free Chicken” Is A Necessity For Restaurant Brands International
Attracting millennials through healthier food options is the new mantra of fast food restaurants. As McDonald’s moves towards fresh beef in its burgers, Restaurant Brands International (RBI) (NYSE: QSR) which owns Burger King, Tim Hortons, and Popeye Louisiana Kitchen recently announced that it will stop using antibiotics on its chicken farms by the end of 2018. This rule will apply to all brands under the company’s umbrella making its products healthier and more attractive to the health conscious millennial generation. However, RBI seems to be late in this initiative with players such as McDonald’s and KFC already announcing that they will be using antibiotic free chicken in their products. This move cannot give RBI a competitive edge but is necessary for the company to stay competitive in the crowded fast food industry.
Breaking The Wall Between “Fast Food” And “Fast Casual”
With their healthier offerings, quick service restaurants are now entering the space occupied by fast casual chains and the wall between these two categories is likely to fall in 2017.
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According to a market study by Technavio, the fast casual restaurant market in the U.S. is likely to reach nearly $67 billion by 2020, growing at a CAGR (compounded annual growth rate) of more than 10%. This growth is driven by millennials who prefer quick service, tasty, and healthy food. Further, since these restaurants are frequented by consumers during work hours also, they get a substantial portion of their daily nutrition needs from the food consumed at these places. This encourages them to eat healthy and they prefer restaurants which have fresh ingredients. While McDonald’s is experimenting with fresh beef, Burger King is still behind in these healthy initiatives. Antibiotic free chicken is its first step in this direction, however, as the restaurant landscape evolves the company might introduce other “healthier” measures. It might become a necessity in the long term as competitors serve healthy food free of preservatives and artificial ingredients.
As the wall between quick service and fast casual breaks, we believe restaurants will benefit from serving healthier food. McDonald’s is an example of how menu innovation and introduction of “gourmet” food, such as salads, has helped the company. RBI is moving in the right direction but is lagging behind its peers. The company needs to focus on healthy initiatives to stay competitive in the long term.
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