Ronald McDonald Fades as Chain Touts Lattes, Not Kids Meals

Bloomberg

As McDonald's Corp. (NYSE: MCD - News) morphs into a more upscale chain, there's one person you won't see munching salads, sipping a cappuccino and surfing the Web: Ronald McDonald, age 48.

While Ronald still plays an ambassador role, he isn't tied to the menu, says spokeswoman Danya Proud. Even as mascots like Burger King's King shill on TV and the Web, Ronald has ceded the limelight to budding singers and dancers who sell mochas and frappes -- not Happy Meals.

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"We haven't been seeing a lot of Ronald McDonald," said Tim Calkins, a marketing professor at Northwestern University in Evanston, Illinois. "They're beginning to appeal to much more sophisticated individuals."

Amid intensifying concern over surging obesity rates, the chain has distanced itself from its fast-food origins, adding cafe-friendly items such as fruit smoothies and dolling up restaurants with free WiFi and padded seats. While the shift helped to revive sales growth last year -- McDonald's has credited McCafe coffee for revenue growth in six of the past seven quarters -- the new adults-only ambiance leaves little room for Ronald.

"He kind of represents the old McDonald's, with the high- fat content foods that are kind of falling out of favor," said Bob Dorfman, the executive creative director at Baker Street Advertising in San Francisco. "It's clear that McDonald's is advertising coffee, they're not advertising burgers."

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©Qilai Shen/Bloomberg
A statue of Ronald McDonald at the McDonald's Corp. Hamburger University in Shanghai.

Coffee Indulgences

The company's McCafe drinks, which rolled out nationally in 2009, have helped fuel specialty and iced coffee consumption in the U.S., according to NPD Group Inc. Specialty coffee servings rose 3.3 percent and cold and frozen coffee jumped 8.5 percent last year, while all coffee rose 0.6 percent from the year before, data from the Port Washington, New York-based researcher show. Oak Brook, Illinois-based McDonald's has refurbished stores to reflect the new McCafe stylings.

"They're trying to get a Starbucks feel," said Joel Cohen, president of the Cohen Restaurant Marketing Group in Raleigh, North Carolina. "You'll see the greens and the browns, those nice earthy tones."

The latest McCafe commercials feature lesser-known stars such as Irish dancing pair Suzanne Cleary and Peter Harding doing some serious hand clapping while sipping coffee. In another, R&B singer Bryson "Cupid" Bernard does the McCafe shuffle while crooning about "frappes so sweet and so creamy." They're a far cry from 1980s TV spots showing Ronald picnicking in the forest with Grimace and touting "Bambi" Happy Meal toys.

Lawsuits

Some parents in California may be happy to kiss Ronald and his Happy Meals goodbye for good. A Washington-based advocacy group said McDonald's baits, exploits, and harms children by offering toys with its kid's meals, according to a lawsuit filed in the state courthouse in San Francisco last year. The Center for Science in the Public Interest sought class-action status on behalf of all of the state's children under 8 years of age who have seen Happy Meal marketing since December 2006.

While Ronald may no longer light up the small screen, he still springs up around town to brighten kids' birthdays and school assemblies. Ronald also has some job security thanks to his charity work at his 300 Ronald McDonald Houses, which lodge families who need to be near their sick children.

"They haven't given up on Ronald at all, they haven't given up on kids," said Malcolm Knapp, a New-York based restaurant consultant. "They just changed the marketing mix."

Ronald's Origins

The origins of Ronald are clouded by who gets credit for his existence. Weatherman Willard Scott claimed in a memoir that he came up with the character almost 50 years ago when he donned a paper-cup nose for a McDonald's store opening in Alexandria, Virginia. McDonald's says Washington-based franchisee Oscar Goldstein invented the character, supported with local ads until the first national television commercial aired in 1966.

Other chains have followed with their own mascots, like Burger King Holdings Inc.'s King, a man garbed in a mask, crown and Renaissance-period clothing who shows up at people's houses bearing menu items. The restaurant has lured college-aged diners with Internet spots and viral marketing, playing up the character's bizarre persona and oversized head, created by the advertising firm Crispin Porter + Bogusky. Lauren Kuzniar, a spokeswoman for Miami-based Burger King, declined to comment for this story.

Burger King has avoided some of McDonald's legal spats with nutrition-conscious parents because "the King" character clearly isn't targeting children, said Jim Hardison, the creative director at Character LLC.

Embracing Creepy

"They embrace that creepiness on purpose," said Hardison, based in Portland, Oregon. Burger King made "sure their character couldn't be confused with a children's icon."

Still, McDonald's is by far the leading fast-food chain in the world, with $24.07 billion in sales last year. Even with Ronald's limited participation, it's also the most valuable restaurant brand, worth $33.6 million, compared with $5.84 million for second-place KFC, according to consultant Interbrand.

"They're just headed in a different direction," said Jack Russo, an analyst at Edward Jones & Co. in St. Louis, who advises holding the stock. "A lot of people have grown tired of fries and burgers."

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

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