Twenty five years ago, McDonald’s and the Environmental Defense Fund (EDF) worked together to develop a groundbreaking model for industry and nongovernmental organization collaboration. It was the first partnership between an environmental group and a Fortune 500 company in an era when environmental and business interests were typically not aligned. The focus was not on philanthropy, the traditional model at the time; rather, the focus was on improving business practices.
In the first decade, as a result of the joint initiative, McDonald’s eliminated more than 300 million pounds of packaging, recycled 1 million tons of corrugated boxes and reduced restaurant waste by 30%. Since then, both McDonald’s and EDF have maintained partnership and collaboration as the key ingredients to achieving sustainable solutions and continuous improvement. Over time, more companies and non-governmental organizations (NGOs) have adopted this type of model around environmental innovation and other areas of societal concern.
Mission-Driven Groups: A Valuable Corporate Stakeholder
Corporate teams can benefit from the expertise of mission-driven organizations. They complement the knowledge and experience of in-house experts and can challenge their thinking, often resulting in better outcomes. Based on this model, McDonald’s and the Alliance for a Healthier Generation came together in September 2013 to form a partnership on a Clinton Global Initiative (CGI) Commitment to Action to increase families’ access to fruits, vegetables, and low-fat dairy products.
In response to the rapid increase in childhood obesity rates over the last three decades, the Alliance for a Healthier Generation was founded to serve as a catalyst for children’s health. A unique partnership between the American Heart Association and the Clinton Foundation, the Alliance functions on the premise that obesity does not have one single cause, and therefore does not have one single solution. Children’s health is complex, and it will take government agencies, NGOs, and the private sector working together to ensure the best outcomes.
Working with the private sector has been a critical strategy for the Alliance. The Alliance negotiates voluntary agreements with companies based on solid, evidence-based science, defined by clear metrics, and verified through independent data collection and analysis. It is also important to note, though the Alliance welcomes everyone to the table, it does not accept funds from entities with which it is negotiating solutions.
These types of collaborative solutions do not occur overnight. They can be years in the making, as was the case with McDonald’s and the Alliance. They require phases of trust building and knowledge sharing. Both organizations need to come to the table with an open mind and a lot of patience. Only by putting biases and presumptions aside can the two organizations begin to work hand-in-glove toward real, substantive solutions. When our two teams reached this phase, we were then able to begin to define shared goals and determine how each of our organizations could contribute.
Alignment of Interests: Challenging but Achievable
Impact is the focus of the partnership between McDonald’s and the Alliance. Yet key considerations of our respective organizations create a natural tension. A corporate organization relies on profit and shareholders to ensure its longevity; the NGO is focused on mission-driven scientific evaluation, ultimately hoping to solve a critical issue and put itself out of business.
Once McDonald’s and the Alliance agreed on what we could impact together, we worked through various options. Of course there is a negotiation process to determine, for example, what constitutes a stretch goal, and what is truly achievable. McDonald’s business model is unique, which brings challenges and opportunities. In terms of impact, our scale and scope are a strength. With 69 million customers a day, a small change can make a big difference, and a significant change, even more so.
At the Alliance, we work across sectors to change policies, systems and environments. Our model is built on creating capacity in community-based institutions and changing corporate practices. And while we bring corporations to the table, we also hold them accountable for taking meaningful actions to advance solutions.
And so together McDonald’s and the Alliance decided to partner on a CGI Commitment that covers 20 major markets, representing more than 85% of McDonald’s global sales and spans through 2020. Year 1 progress was measured in the U.S. and Italy by a third-party public policy economic consulting firm, Keybridge, with the following results:
Goal: Feature only water, milk and juice as the beverage option in Happy Meals on menu boards, in-store, and throughout external Happy Meal advertising.
Progress: In the first 11 months since sodas were removed from the Happy Meal section of U.S. menu boards in July 2014, milk and juice selections rose 9% points. Before the change, 37% of Happy Meal orders included milk or juice. After the change, that percentage increased to 46%. During the same period, Happy Meal orders with soda decreased from 56% to 48%. Overall, this contributed to serving 21 million additional milk jugs and juice boxes in Happy Meals and a la carte in that same period (July 2014 to May 2015 compared to July 2013 to May 2014).
Goal: Offer customers a choice of side salad, fruit or vegetable as a substitute for French Fries in value meal bundles.
Progress: Currently, 83% of U.S. and 96% of Italy’s McDonald’s restaurants offer a side salad, fruit or vegetable instead of fries as part of value meal bundles.
Goal: Generate excitement for fruit, vegetable, low/reduced-fat dairy, or water with Happy Meal packaging innovations and designs or by introducing new options in the Happy Meal.
Progress: McDonald’s U.S. and Italy have both generated excitement for fruit, vegetable, low/reduced-fat dairy and water. McDonald’s Italy saw a steady increase in fruit orders over the last two years. And McDonald’s USA has introduced new Happy Meal options which resulted in serving 161 million tubes of Go-GURT® Low Fat Strawberry Yogurt (from July 2014 to May 2015) and 38 million Cuties Clementines (from November 2014 to March 2015) in Happy Meals and a la carte.
Goal: Use Happy Meal box or bag panels to communicate a fun nutrition or well-being message four times annually.
Progress: Both the U.S. and Italy have exceeded the four box panels that were required since the 2013 announcement.
Goal: Include a fun nutrition or well-being message in 100% of advertising directed to children.
Progress: The U.S. and Italy are more than 99% compliant with this commitment.
(The remaining ads shown during child-directed programs represent programming errors or unexpectedly high viewership among children.)
Though there is more to do in the coming years, together we have found that this model of partnership can create real-world, observable, and measurable change.
Steve Hilton is Vice President of Global Government and Public Affairs for McDonald’s Corporation. Steve leads a team responsible for McDonald’s strategic engagement with government entities, as well as non-governmental organizations, at the state, federal and global levels in support of the Brand and its franchisees.
Anne Ferree serves as the Vice President for Strategic Alliances for the Alliance for a Healthier Generation, founded by the Clinton Foundation and American Heart Association, working to reduce the prevalence of childhood obesity.