<<Disclaimer: Verify this information before applying it to your situation.>> 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.