McDonald's tests a new super sized angus burger, hoping to take on other fast food chains that have introduced their own premium burgers. CNBC's Jane Wells goes behind the scenes to find out how McD's hopes to outmarket their competitors.
Taking a Bite out of the Competition: McDonald’s Tests New Burger
CAMPBELL BROWN, co-host:
Turning now from a controversy over coffee to a battle over beef, Angus beef. McDonald's is testing out a fancy new burger, hoping to take a bite out of the competition. Here's CNBC's Jane Wells.
Unidentified Woman #1: I love hamburgers.
JANE WELLS reporting:
Where others succeed, McDonald's will trample. The company took on Starbucks in high end coffee, now it's taking on rivals with a high end burger. Here's the beef: a third of a pound Angus burger, following similar products from Burger King and Carl's Jr.
Unidentified Woman #2: The six-dollar burger.
WELLS: Which started the trend six years ago and scored big. Mickey D's is testing the market for its big burger in Southern California, priced at 3.99 and heavily advertised.
(Clip from McDonald's commercial)
Mr. CHRIS WOICIK (McDonald's Corporation, Vice President of Southern California Region): In the early stages, we do have a winner on our hands. We're very encouraged by it, and I think we're going to sell a lot of them.
WELLS: With hamburgers still making up more than half the sales in the fast food business, these Angus burgers cost more to make, but they're also more profitable, which is why everybody wants to make them.
Mr. JOHN SCHAUFELBERGER (Burger King Corporation, Vice President of Product Marketing & Innovation): We've been in the Angus steak burger business for three years. And we're consistently ranked as the number one Angus selling burger across the country.
Mr. ANDREW PUZDER-PRES (CKE Restaurants): We're looking into what McDonald's is doing, but we're pretty sure it's a McAngus product, not the kind of product we're producing.
WELLS: We conducted a very unscientific taste test comparing the Angus burgers.
Unidentified Woman #3: My favorite right here.
WELLS: What the tasters don't know is that number one is from Burger King, number two from Carl's, number three the new burger from McDonald's.
Woman #1: I like number one the best.
Unidentified Woman #4: Number one.
Unidentified Man #1: Based out of all three, I would say number two.
Woman #3: This one, number three.
Unidentified Man #2: Number three.
Unidentified Man #3: It's the best one.
WELLS: Well, you get the picture. As McDonald's ponders whether to take the product national, the question remains: Is the big burger market big enough for everyone? Or will rivals end up having a cow? For TODAY, Jane Wells, NBC New, Los Angeles.
In a bid to reverse a steep decline in customer traffic, McDonald's will begin serving fresh beef, instead of frozen, in its Quarter Pounder hamburger at most restaurants by 2018.