BUSINESS

A low-fat attack

Canada’s fast-food chains are on a health kick

JOHN DALY July 8 1991
BUSINESS

A low-fat attack

Canada’s fast-food chains are on a health kick

JOHN DALY July 8 1991

A low-fat attack

BUSINESS

Canada’s fast-food chains are on a health kick

Steven Jensen watches both his wallet and his waistline. Like many young Canadians, the 20-year-old unemployed Edmonton factory worker frequents inexpensive fast-food outlets rather than more formal restaurants when he eats out. But Jensen also says that he is worried about the health effects of fat-laden, calorie-rich foods like pizza, hamburgers and french-fried potatoes. As a result, he was among the first customers to sample a new brand of skinless fried chicken now being test-marketed at four Kentucky Fried Chicken Canada outlets in Edmonton. The company says that its Lite ’N’ Crispy chicken contains about half the fat and 40 per cent fewer calories than its regular fried chicken. Jensen’s reaction may indicate that the 796-outlet chain has found a recipe for higher sales. “It should sell really well,” he said. “Everyone is looking out for their health.”

Kentucky Fried Chicken is one of several fast-food chains that have altered their menus and their marketing strategies recently because of the growing public awareness of the dangers of too much fat. In May, the country’s largest hamburger chain, McDonald’s Restaurants of Canada Ltd., began selling a new kind of burger that it calls the McLean Deluxe. The McLean contains 11 g of fat, 12 g less than a

similarly sized McDonald’s Quarter Pounder, the company says. And in Toronto last month, Harvey’s, Canada’s second-largest burger chain, began test-marketing a hamburger that it says contains just 10.8 g of fat. (Health and Welfare Canada recommends that adult men eat no more than 90 g of fat per day, and women no more than 63.5 g.)

McDonald’s and several of its competitors have also introduced salads, low-fat frozen yogurt and other items to their menus as alternatives to traditional favorites like french fries and ice cream. Following in the footsteps of its U.S. parent, Kentucky Fried Chicken Canada is even changing its name and logo to the initials KFC—part of a strategy aimed at revamping the company’s image by eliminating the word “fried.”

The battle to attract health-conscious consumers has taken on added importance because of the current economic slowdown. Total fast-food sales in Canada fell four per cent last year to $4.9 billion, according to the Canadian Restaurant and Food Service Association. One reason for the decline is that consumers are eating more meals at home—forcing the chains to fight harder to maintain their existing level of sales. “On Jan. 1, when the Goods and Services Tax took effect, the industry dropped

off the edge of a cliff,” said Douglas Woodside, vice-president of marketing for Wendy’s Restaurants of Canada Inc., Canada’s fourth-largest hamburger chain after McDonald’s, Harvey’s and Burger King. He added: “We’re still trying to crawl back.”

Although the economy is now showing signs of recovery, analysts say that demographic trends represent an even greater challenge for the fast-food industry. Arthur Good, director of retail services for the Toronto-based management consulting firm Ernst & Young, says that only seven per cent of Canadians are now between the ages of 15 and 20—the single biggest market for fast food—compared with 9.5 per cent in 1981. Meanwhile, the huge postwar baby boom generation is now approaching middle age, a stage at which some consumers, at least, tend to show more concern about their diets. Said Good: “The boomers’ worries about their health and their weight will determine the direction of the industry.” Even so, some fast-food executives say that they are reluctant to make major changes to their menus for fear of overestimating the demand for healthier foods. Last year, 13.5 per cent of all restaurant meals consumed in Canada included a hamburger, compared with 17.1 per cent in 1985. Over the same period, the proportion of meals containing chicken climbed to 16.1 per cent from 11.2 per cent. According to Tim Hilliard, director of marketing for Kentucky Fried Chicken Canada, the chain is testing its new Lite ’N’ Crispy chicken slowly because “people’s consumption habits don’t always follow their intentions.”

McDonald’s showed similar caution before introducing its McLean Deluxe. Michael Goldblatt, the company’s Oak Brook, Ill.-based assistant vice-president for nutrition and product development, says that most consumers still like the flavor of traditional fast food, regardless of their professed desire for more healthful products. “Fat tastes good,” he says. As a result, McDonald’s spent several million dollars over four years to develop and testmarket the McLean burger. The recipe simulates the taste and juiciness of fattier meat by adding com starch, salt, natural beef flavor and water to lean beef. In future, Goldblatt says, the company plans to introduce other, more healthful menu items, including low-calorie condiments, pasta and grilled chicken.

For the chains, offering consumers a wider selection of menu items inevitably results in higher costs and reduced efficiency. But McDonald’s Canada president George Cohon, for one, says that his company “has always been consumer-driven” and has little choice but to respond to shifting tastes. Indeed, Goldblatt said that he can even conceive of a time when McDonald’s will decide to drop its flagship Big Mac—a twin-patty cheeseburger that packs 583 calories and 35.4 g of fat—from its menu. Added Goldblatt: “Nothing is sacred.” In the fast-food industry, as in any other, the customer is always right.

JOHN DALY

KERRY DIOTTE