Management/McDonald�s term paper 42097

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McDonald�s Says �Rabbit Season!�

In McDonald�s never-ending quest to support our corporate strategy of optimizing people, products, price, place and promotion we are introducing rabbit meat in regionalized markets in North America. Rabbit, once popular during the meat shortages of World War II, is making a huge comeback in many areas of North America. Most rabbit meat is imported from other parts of the world. McDonald�s has a high corporate responsibility to our local markets and is providing an opportunity for regional farmers and consumers to capitalize both economically and gastronomically on the rapid rise in the rabbit rage. Today, people are asking �Who is producing my food? Where does it come from?� Our intention is to promote local farmers, processors and menus in areas where small game hunting is common and rustic food plays a prominent part in eating. McDonald�s feels the local economy will benefit from raising and processing domestic rabbits locally for consumption.

The United States alone, on average, imports more than 1 million pounds of rabbit, most of this from China. In an effort to support local, organically grown food products, McDonalds will offer a program to assist local farmers in regional areas of the Pacific Northwest, the Southern United States, Quebec, Mexico and New York in producing rabbits for consumption in a safe, humane and controlled environment that will maximize profits for the farmers and provide quality meat for McDonald�s restaurants.

Benefits for Farmers

Raising rabbits will provide immediate economic benefits to these regional areas. Our processing plants and farms will bring new employment and investment opportunities for these areas. We expect to open and operate 15 regional processing plants and over 100 rabbit farms in some areas that have been hard hit by recent economic downturns. Benefits for farmers include the following:

� Rabbit is lower in cost to produce than chicken

� We will pay farmers $2 - $4 per pound depending on whether the meat will be distributed to McDonald�s or local up-scale restaurants. This is well above the average price per pound of $.90 � $1.00.

� McDonald�s will subsidize 40 percent of all startup costs, minimizing the investment for farmers and making them immediately profitable

� We will offer rabbit farmers 20 percent back in the sale of by-products such as fur, blood serum and skin from the processing plants

� With McDonald�s subsidies, the small farmers will stay viable for longer periods of time, providing a more constant source of meat for local restaurants

� The profit margin for these farms will be 12 � 15 percent higher than the average chicken or beef operation

� Inspection of farms and processing plants will be conducted through McDonald�s to ensure high standards are maintained, at a low cost to farmers

While we understand there are concerns regarding animal welfare, McDonald�s will provide processing plants where standards are higher than current USDA standards. Facilities will adhere to exemplary animal welfare standards designed by the University of California animal husbandry college. We recognize that rabbit farming, because of cramped cages and high stocking densities, can cause health problems in rabbits. Our inspections will be held at a higher frequency than those of chicken and beef in order to prevent disease and ill-health. Processing plants will be on a smaller, local level to ensure the viability of the rabbits between the farm and the plant. Rabbits grown for consumption by McDonalds will exceed the standards for the Humane Methods of Slaughter Act and our plan will use the more humane method of gas, prior to slaughter for the animals. Over 10 million pounds of rabbit meat are consumed in the United States. It is McDonald�s mission to ensure local farmers benefit from this consumption. Overall, the program will provide food security, income and diversification of livestock on a regional basis.

Benefits for Consumers

One of the most obvious benefits to consumers is the nutritional value of the products being offered. Rabbit tops the list with the highest amount of protein, lowest amount of fat and lowest calories per pound compared to other meats.

Rabbit also reduces the risk of excess fat, heart diseases, high cholesterol, high blood pressure, diabetes and cancer. It is also an excellent source of selenium, iron and vitamin B-12. The texture is similar to chicken but rabbit is richer in taste and considered a healthy alternative to red meat.

Consumers want to know how their food is produced and to know it is produced in a healthy, humane environment for the animals and in an environment that creates a healthy product. Consumers can feel safe in their consumption knowing their rabbit came from a supply that adheres to high sanitary and quality standards. Consumers will know McDonald�s high standards eliminate diseases or questionable quality that pervade imported rabbits.

In keeping with other regional menu items, McDonald�s customers will find a wide variety of regional specialties incorporating rabbit meat. Our current regional menus include Maine lobster rolls, Maryland crabcakes, Johnsonville Brats® and California tortas. The rabbit theme will include a heart-smart sautéed rabbit salad as well as oven fried rabbit. The Pacific Northwest restaurants will promote regional specialties like Rabbit Etoufee and Grilled Rabbit with rosemary-lime sauce. Our southern restaurants will offer tantalizing dishes like Cajun Baked Rabbit and Louisiana Creole Rabbit. Urban New York will have Chinese Sweet and Sour Rabbit, Rabbit with Sauce Picante and Rabbit Roll with prosciutto and mozzarella.

Local, urban restaurants continually complain there is a short supply of quality rabbit meet for their haute-cuisine recipes. The McDonald�s rabbit solution will help alleviate this shortage created by the new demand. From its heyday 60 years ago during World War II, rabbit has been rapidly declining in demand. Farms seem to come and go and McDonald�s rabbit farming program will provide a steady supply of high-quality, reasonably priced meat for these restaurants. Our sustained farms will ensure consistency and quantity in the marketplace.

In response to certain allegations that McDonald�s restaurants will slaughter rabbits in front of consumers, it is not true. McDonald�s will offer educational programs to area schools, universities, 4-H clubs and other organizations allowing tours of processing plants as well as local farms. A McDonald�s representative will meet with each organization before the tour to determine what the group should have access to. Obviously a 4-H group or university farming program would be much more open to see the slaughter process than a first grade class. While we want to encourage everyone to find out where food comes from, we recognize differing sensitivity levels in consumers. Preliminary marketing in many of the geographic areas where we are promoting this product has indicated a positive reception to seeing the process from farm to fork. In many of these areas, schoolchildren are already exposed to the food production process through extensive hunting of deer, birds and other wildlife within their own communities. It would certainly not come as a shock to learn that rabbits must be killed before being eaten.

Future Market Developments

�We are developing the next generation of food ideas for McDonald�s,� according to Denis Hennequin, President of McDonald�s Europe. People and place are two important factors in our corporate strategy. We always try to give the local markets what they want. In other countries, menus include all-pork patties, shrimp burgers, fries with gravy, beef ragout, McRice and mutton burgers. Our rabbit farming process will fit in other areas of the world where it becomes even more important to support the local economy and assist farmers with viable farming opportunities in otherwise difficult economic conditions. Some of the immediate plans are for expansion into Latin America, the Mediterranean, areas of Africa and Europe which accounts for 75% of worldwide rabbit production. At McDonald�s, we believe our corporate responsibility lies beyond employing people and serving consumers.

�We are continually looking for ways to improve local economies through our programs. A sustainable supply of food is important to food companies, essential to farmers and vital to consumers who depend on our products,� says Jeroen Bordewijk, Chairman, Sustainable Agriculture Initiative Platform. McDonald�s European markets already support the concepts of quality ingredients and responsibility to our consumer and local farmers. The existing supply chain will fit in nicely with the rabbit farming program outlined for the North American market. McDonald�s is providing revenues for local public projects and services as well as sustainable farming for future generations.

Sources Consulted

Corporate Responsibility Report 2005. 28 Sept 2007.

Duecy, Erica. �Hare Fare: Uncommon, Versatile Rabbit Finds a Home on Modern Menus.� Nation�s Restaurant News. 14 Mar 2005.

Hirsch, J.M. �Increased Demand for Rabbit Meat Prompts Shortage.� Rutland Herald. 8 Aug 2005. 29 Sept 2007

Kennedy, Randy. �The Way We Eat: Rabbit is Rich�. The New York Times. 12 Mar 2006. 9 Sept 2007 .

�McDonald�s Menu Items�. Wikipedia, The Free Encyclopedia. 21 Sept 2007

�Breeding Rabbits for Food and Income.� Food and Agriculture Organization of the United Nations. 9 Sept 2007 .

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