McDonald's McAloo Tikki represents a world of opportunity

CEO Don Thompson raves about a veggie sandwich on the India menu; why not import it?

When someone tells you about a food they love, the passion is infectious. And as Don Thompson tapped into his inner foodie, rhapsodizing about a spicy potato croquette on a bun called a McAloo Tikki, you could almost taste it.

"Ohh, it's a good sandwich," Thompson told an audience this week at Northwestern University's Kellogg School of Management. "This is a veggie patty that you actually see the peas and the kernels of corn inside the vegetable patty. It is a wonderfully fantastic patty with this tremendous sauce. Man, the lettuce — this is a great sandwich."

We'll just have to take Thompson's word. The McAloo Tikki is an inexpensive, best-selling staple of McDonald's in India, unavailable here. Thompson, the Oak Brook-based global fast-food kingpin's chief executive, was only mentioning it as an example of how the company's offerings vary around the world in response to what the individual markets and customers tell it.

But if this McAloo Tikki is really that good, why doesn't McDonald's use it to rouse business here instead of trying to fancy up a burger for the umpteenth time? If the CEO is this excited about it, might it also spark interest among U.S. diners?

Right now, McDonald's — playing the slow-and-steady, in-it-for-the-long-haul strategy — is riding the rising stock market despite unimpressive U.S. same-store sales.

"It's not about the food. It's about the dividend," CNBC's Jim Cramer told his viewers Monday.

"These low interest rates make dividend-paying stocks like McDonald's look incredibly sexy to investors who want income,'' Cramer said.

And if McDonald's does manage to goose sales, the thinking among some analysts is the share price will really take off.

"A path to improved operating momentum is emerging and management appears to have a greater sense of urgency behind value-creation opportunities," UBS analyst Keith Siegner wrote Tuesday, noting limited downside because of "still-low expectations and valuation.''

All of that looks to be true, but the company still needs engaged customers.

"If you looked at the history of McDonald's," Thompson said, "one of the things that you'll find is that whenever we have been maniacally focused on the customer, things tend to go (well). Whenever that focus shifts internally to a profit scenario or base, things seem to go (bad)."

The economics of a breadcrumb-covered potato-chickpea sandwich may make it something less than a long-term home run for a company and its franchisees looking to improve sales figures. As a limited-time offering, however, one imagines McAloo Tikki boosting traffic by getting people into a McDonald's restaurant who haven't been there in a while, if ever.

What we see in America 2014 is an appetite for a growing array of food options. Sometimes we crave an experience as much as a meal. This hunger for new and different is driving change at the supermarket and dining out.

McDonald's still looms large in this changing landscape, but it must adapt in order to move forward in it.

Thompson's larger point at Kellogg was that McDonald's serves 70 million meals a day in more than 35,000 locations around the world, and it didn't get where it is by trying to serve all the same meal to everyone at once. It listened to what its markets and customers told it.

So McD's sells a lot of chicken in China and a lot of veggie burgers in India. In the Middle East, one might order a McArabia, which is chicken, onions and tahini sauce in pita bread. A customer in Canada might go for McPoutine, a variation on the national dish of fries with gravy and cheese curds.

Thompson noted that it was McDonald's franchisees, attuned to the customers in their hometowns and looking to boost sales at the local level, who developed and introduced eventual menu mainstays such as the Big Mac, Egg McMuffin and Filet-O-Fish. "Franchisees often come up with innovation because they're in the local markets, and that happens around the world," he said.

McDonald's also has not been reluctant to import menu items from overseas. A company spokeswoman noted McWrap sandwiches made their debut in Europe before playing Peoria.

"They do Shake Shake Fries (in China) and other things that you may see at some point somewhere in the U.S. — like this week on the West Coast," Thompson said, referring to self-seasoned fries McDonald's introduced in Hong Kong nine years ago and later spread to India, Australia and elsewhere.

The chain is testing Shakin' Flavor Fries in select U.S. markets even as you read this.

"For us at McDonald's, the key is to listen to what customers are saying they want and attempt to satisfy that," Thompson said.

Would others here be as taken by the McAloo Tikki as Thompson seemed to be? Hard to know unless it gets its own test markets.

At the very least it would get people talking about Mickey D's rather than just taking it for granted.

Today's McDonald's menu still has the hamburger and fries and shakes it had when Ray Kroc launched the corporation 59 years ago. Obviously it has grown and evolved since then and will continue to do so.

"Ray Kroc made a statement years and years ago," Thompson said. "He said, 'I don't know what we'll be selling in the year 2000' — so you know how many years ago it was — 'but we'll be selling more than anyone else.'"

When was the last time you heard anyone that excited about a Big Mac or McNuggets?

philrosenthal@tribune.com

Twitter @phil_rosenthal

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