How McDonald's can recover from the E.coli food safety crisis

• According to the CDC, McDonald's Quarter Pounders have been linked to an E. coli outbreak in several states.
• McDonald's said it would temporarily remove the burgers from its menus in affected areas.
• Other fast food chains have already recovered from similar food safety crises.

A fatal E. coli outbreak has been linked to the McDonald's Quarter Pounder.

So far, one person has died and 10 others have been hospitalized in connection with the outbreak, sickening at least 49 people in 10 states, the Centers for Disease Control and Prevention said Tuesday. McDonald's said the outbreak may be related to the onion slivers used in its Quarter Pounder.

The fast food chain said it has temporarily removed the burger from the menu in several states.

“Negative food safety news is never welcomed by restaurant operators, especially those working to improve brand image after being sidelined in consumer affordability in recent years,” Citigroup analyst Jon Tower said in a note to customers Bloomberg.

Tower said McDonald's prospects depend on the company's response, which should include taking responsibility, controlling the outbreak and overcorrecting food safety, the outlet reported.

Examining how other fast food giants have recovered from recent health crises could also shed light on how McDonald's will attempt to recover from the incident.

How Chipotle and Wendy's came back from health scares

Several fast food brands have already recovered from food safety incidents.

One of them is Chipotle, the Mexican fast-casual chain in which McDonald's owned a 90% stake until 2006.

In 2015 and 2016, hundreds of customers reported becoming sick after eating at Chipotle restaurants. Chipotle's stock price plunged and the company ultimately agreed to pay a $25 million fine to resolve criminal charges related to outbreaks that affected 1,100 people between 2015 and 2018.

But less than five years later, the company and its share price had recovered. So what did Chipotle do?

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In 2016, the company announced a series of new food safety protocols – such as rinsing produce multiple times and placing stickers on food containers to indicate when they have been disinfected – and hired James Marsden, a Kansas State University professor who serves as executive director of food safety.

In 2017, Chipotle announced that its founder Steve Ells would step down as CEO and turn to someone with “proven turnaround expertise.” In 2018, Brian Niccol, now CEO of Starbucks, took over as CEO of Chipotle after a successful stint at the helm of Taco Bell.

Niccol told The New York Times in 2019 that Chipotle had become “an industry leader” in food safety, adding, “We're doing some really progressive things on the food safety front, and we're going to have to do that because we're doing that.” We remain committed to using real ingredients.”

Chipotle's recovery may also have depended on expanding its business in areas unrelated to food safety. “They are exceptional in how well the brand has benefited from digital ordering,” Sara Senatore, a Bernstein analyst who followed Chipotle, told the Times in 2019.

Wendy had a similar situation. In July and August 2022, Wendy's restaurants were linked to an E. coli outbreak in six states, according to the CDC. At least 109 people became ill and 52 had to be hospitalized. No deaths were reported.

An investigation into the incident was unable to determine the specific food source responsible for the outbreak. However, according to the CDC, 46 people reported eating romaine lettuce on the burgers and sandwiches before getting sick. As a precautionary measure, the fast food chain has removed romaine lettuce from menus in affected states.

Despite the E. coli outbreak, the company's U.S. sales rose 7.7% in the third quarter of 2022 compared to the previous year.

In its latest corporate responsibility report released in May, Wendy's said it is committed to continually improving its food safety standards and operations and has conducted more than 12,000 food safety assessments at its restaurants worldwide.

What McDonald's should do

What sets the McDonald's case apart from similar incidents at other fast-food chains is the Quarter Pounder's iconic status, Alexandra Leung, founder of Monogic, a food and beverage marketing and public relations agency in Singapore and Hong Kong, told Business Insider.

“As a classic menu item, any food safety issue related to the Quarter Pounder could significantly impact consumer trust and brand reputation, making it a more sensitive issue for McDonald's,” she said.

The Quarter Pounder is important to McDonald's menu — and to the brand more broadly. Menu “classics” like the Quarter Pounder have accounted for a majority of grocery sales at top McDonald's stores in recent years. The company's share price fell nearly 10% in after-hours trading on Tuesday following the news.

But Leung said the company's well-established food safety management system and history of rigorous supplier audits could enable a more effective response.

The fast-food chain also needs to conduct thorough audits of its suppliers' practices, she said.

In addition to continuing the product recall of the affected items, McDonald's should also communicate clearly with its customers throughout the process, Leung said.

“Clear messaging about the measures being taken to ensure food safety is crucial. This proactive approach will help reassure customers that their health is a top priority,” said Leung. “Transparency is critical to rebuilding customer trust as it shows responsibility and commitment to their security.”