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The Wall Street Journal Interactive Edition October 24, 1996
Big Mac Scoffs as Competitors Tout a Coated French Fry
By LOUISE LEE
Staff Reporter of THE WALL STREET JOURNAL
If you can cook up a better french fry, will the world beat a path to
your counter?
A lot of fast-food restaurants hope so. Jack in the Box, Arby's and A&W
are all introducing fries billed as crisper and hotter than before.
Meanwhile, Burger King is testing new fries in about 1,000 of its 6,900
U.S. restaurants.
But McDonald's Corp., the king of fries, is sitting tight on its throne.
Its fries don't need any improvement, the company says.
The newfangled fries, which the restaurant chains buy from such
suppliers as Lamb Weston Inc. and Ore-Ida Foods Inc., feature a
transparent coating of a potato-starch batter that enhances crispness
and acts as an insulator, keeping the product hot for as long as 15
minutes. That's up from a traditional "holding time" of five to seven
minutes.
"Our guests were telling us [our fries] weren't crispy and were kind of
bland and kind of limp," says Kirsten Hegberg-Purcell, product manager
at the Jack in the Box chain, a unit of San Diego's Foodmaker Inc.
Others say lengthening the time fries stay hot is growing more important
as more customers take out food rather than eat at the restaurant.
The last variations of shoestring fries -- spicy and curly versions --
appeared in the 1980s but failed to excite the national appetite. Today,
the coated-fry camp is all fired up by customers such as W.H. Trobaugh,
a Dallas building painter. "They're crispy and fresh, better than the
old fries," Mr. Trobaugh says as he digs into a bag at a Jack in the Box
outlet. "The old fries would be cold and dried out," he adds.
Jack in the Box has wasted no time in flaunting such opinions in the
face of the competition. Fry bags at Jack in the Box brag, "Jack's are
better than Mac's." Arby's, which says its new Homestyle Fries are a
"big hit" with customers, boasts that the coated shoestrings "beat
McDonald's in a nationwide taste test."
McDonald's scoffs. Its fries "are naturally crisp," says a spokesman for
McDonald's, based in Oak Brook, Ill.
Certainly, the chains' claims must be taken with at least a shaker of
salt. However, given the popularity of potatoes, the effort to build a
better fry makes sense. U.S. consumption of frozen potato products has
steadily increased over the last three decades. Last year, Americans ate
about 60 pounds of frozen potato products per person, more than triple
the amount in 1965, according to the Department of Agriculture. French
fries accounted for about 80% of consumption, with hash browns and
potato puffs making up the rest.
Although fries -- coated or uncoated -- carry heftier margins than
burgers and salads, chains have to sell more of the new variety to
improve the bottom line; in general, coated fries cost restaurants 40
cents to 45 cents a pound, about a third more than traditional fries.
Some chains, such as the 1,200-location Jack in the Box, which unveiled
new fries in July, are absorbing the increase, hoping rising volume will
cover the difference. "The last thing we wanted to do was tell the
customer these are better but you'll pay more," says Ms.
Hegberg-Purcell.
For the first nine months of 1996, fry sales at A&W Restaurants Inc.
units open at least a year rose 15% from a year ago. Privately held A&W,
Livonia, Mich., hopes to boost fries from the current 20% of sales to as
high as 35% over the next few years, says Sidney J. Feltenstein, chief
executive.
The chains say coated fries aren't any harder to cook than the
traditional kind and add that the extra starch doesn't increase calorie
content. However, most coating recipes (which vary by supplier) contain
a small amount of wheat starch, which could be a problem for
allergy-prone customers who avoid bread. Burger King Corp., a unit of
Grand Metropolitan PLC, London, warns customers that its new fries
contain both dairy protein and wheat starch.
Lamb Weston, Burger King's supplier, is working "vigorously" to
eliminate the dairy and wheat ingredients, says Michael A. Pennella,
executive vice president at the ConAgra Inc. unit.
Like the restaurant chains, suppliers are optimistic. At Lamb Weston,
coated spuds are expected to account for 20% of the company's fry
business within 18 months, up from 10% today. Ore-Ida, a unit of H.J.
Heinz Co. of Pittsburgh, calls its coated product "the future of french
fries."
Perhaps, but Dennis Lombardi, executive vice president of Technomic
Inc., a Chicago consulting firm, says the introduction of coated fries
isn't without risk. Although new fries are easier to promote than a new
burger, since customers are more willing to try a side dish than a main
course, permanently replacing traditional fries with a new version -- as
the chains are doing -- can be like "betting the ranch," he says, since
it leaves diners who don't like the new product with no alternatives.
Carl's Jr., a unit of CKE Restaurants Inc. of Anaheim, Calif.,
discovered that problem a couple of years ago when it tried a coated
fry. It ditched the product in favor of its old-style fries after market
tests showed that just half of its customers liked the fry.
Another concern was the temptation to "make the holding time too long,"
says Rory Murphy, a CKE executive vice president. Even with the coating,
fries shouldn't sit for more than seven or so minutes, says Mr. Murphy.
After that, he says, "I'm not sure the quality's still there."
Copyright =A9 1996 Dow Jones & Company, Inc. All Rights Reserved.
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