Why a 5-Year-Old McDonald's Burger Matters
I knew an American actress who took a vow that she would never again live in a country that had McDonald's. And when the first Golden Arches arose in Pushkin Square in 1990, she left Russia. These days, it seems, there wouldn't be that many places left for her to go: Last year, the first franchise opened in Vietnam. This year, Kazakhstan is set to become the fast food giant's 120th market.
There is, however, a select group of countries where McDonald's once had a presence, but no more. In Bolivia, for example, the chain put up with losses for a decade before pulling out in 2002. In Macedonia, the restaurants had to close in 2013 because of a dispute between the local franchisee and head office.
Then there's Iceland, where the three McDonald's restaurants apparently closed for purely economic reasons in 2009, after the Icelandic krona underwent a sharp devaluation. Hjortur Smarason, a marketing consultant, bought the last McDonald's hamburger and fries made in Iceland on Oct. 30, 2009, and has held on to them.
He kept his order in his garage under a glass bowl. Later, it was moved to the National Museum, and now it's proudly displayed at a Reykjavik hostel, where you can feast your eyes on it via live webcam. The burger and fries don't exactly look edible after more than five years, but they aren't moldy or decomposed, either. That's why the museum accepted Smarason's gift, and that's why the last Icelandic burger is making headlines.
McDonald's has spent years trying to reverse the perception that its food doesn't rot. The company's answer is that the burgers decompose, but only under certain conditions, with sufficient moisture. This has been independently confirmed: one food blogger, a chef, showed that homemade burgers would also keep under a glass bowl because they would quickly lose moisture. Any burger -- McDonald's or otherwise -- will rot if it's kept in a plastic bag.
Iceland is not so remote that its museum workers and hostel owners couldn't Google all the answers, as I did. The 1,923-day-old burger webcam isn't effective as a comment on the quality or nutritional value of McDonald's food, but it does attract tourists. In effect, it acts as an ad for Iceland that says: "The last McDonald's hamburger was made here more than five years ago. We're a country beyond the reach of the global octopus."
It doesn't really matter if people understand the moisture explanation or assume that McDonald's food contains scary preservatives that kill all microbes (I wish there were a similar product for my head cold). Nor is it relevant that McDonald's is an innovative company that constantly comes up with new ways to order and customize food, invents ways to reliably mass-produce healthier products and excels at quality control. The Golden Arches have become shorthand for global uniformity. Only the absence of a McDonald's makes a country stand out.
This is a bad place to be. That's why I wonder if the recent string of disappointing results, which led to the departure of Chief Executive Officer Don Thompson, really was just a question of bad luck, as Thompson tried to describe it on the latest earnings call: a transition to new technology in the U.S., currency devaluations in Russia and Ukraine, a problem with a chicken supplier in China. But underperformance on a global scale can't be accidental, and that is what has happened at McDonald's: Last year, sales declined in every one of the company's geographical regions.
There is always a specific explanation for each failure, but together, they point to a conceptual problem that surfaces despite the company's organizational strength and enviable ability to evolve.
I won't go as far as to suggest McDonald's dominance is coming to an end. But perhaps my American friend from the last days of the Soviet Union will be able to have a broader selection of McDonald's-free countries in which to find peace.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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Leonid Bershidsky at firstname.lastname@example.org
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