Shane Commentary


Burger King Opts for Cage-Free

Apr 26, 2012

Reflecting a long-standing involvement with the HSUS, the Burger King Corp. has announced that by 2017 the Company will source only cage-free eggs for their chain of over 7,000 restaurants. Burger King has a history of attempting to “out-welfare” their competitors. When the National Council of Chain Restaurants was establishing standards for housing in the late 1990s Burger King, reflecting their then UK ownership, insisted on a few more inches of floor space area than the mainstream.  Eventually the UEP space allowance values were adopted by the fast food industry.

It is not simply a matter of whether Burger King will fully convert to cage-free by 2017. The question is really whether Burger King will exist in its present form in five years or whether the same misguided decision makers will be calling the shots. Now fourth place among U.S. QSRs, the company has been a market laggard and their successive advertising initiatives have bombed. Remember that creepy king figure as a corporate image?

Perhaps the Corporate Progress Award from the HSUS last year was confused with the reality of generating value for investment company 3-G the current owners.  Jonathan Fitzpatrick, Chief Brand and Operations Officer, might wish to review the agreement between the UEP and the HSUS, and consult with his apparent mentors, who accept the standard of welfare inherent in enriched colony cages. 

His market analysts could apprise him that surveys show an overwhelming support by consumers for enriched cages. His risk analysts might wish to comment on the implications of the relative prevalence of food-borne Salmonella between floor and confined flocks. His accountants might quantify the cost differential between eggs derived from alternative housing systems. Although the company generated a net profit of $29.4 million in FY 2011 this success followed a loss of $93 million in the previous year.

At the end of the day, Fitzpatrick should decide whether his intended action will contribute to enhanced welfare for flocks, increase consumer goodwill or improve his bottom line. His primary duty is to his owner and stakeholders including the franchisees who own 90% of the Burger King stores. He is not in his position to generate a warm fuzzy feeling or to engender accolades from Wayne Pacelle.

Maybe he should evaluate the acquisition policies of the leaders in his market. Recognition from the HSUS will not add to either sales or margins . The HSUS in terms of its avowed intentions would like to expunge the “Burger” in Burger King. “Tofu King” does not have the same cachet or commercial potential.