McDonald's Reveals 'Special Sauce,' Shows Marketing Savvy: Opinion

NEW YORK (TheStreet) -- As a father of three small children, I cannot drive anywhere without being asked to pull into a McDonald's (MCD). Remarkably, this happens even after we've just eaten dinner at home.

It's gotten to the point where whenever I know that I am approaching the Golden Arches, I have to preemptively say to them, "Don't even ask." But where's the fun in that? Plus, it's hypocritical of me, because when I was their age, I did the exact same thing.

This has been McDonald's brilliance over the decades. I would say that it has been able to capture the imagination of children in a way that only one other company -- Walt Disney ( DIS) -- has.

McDonald's following among children also seems as powerful as the cultish following that Apple ( AAPL) enjoys with grown-ups.

It might sound hyperbolic, but it can be argued that no other brand has been more innovative and had a greater impact on our culture than McDonald's. The company's restaurants have been the saving grace for families that are constantly on the go.

It has even become the preferred "junk food" of athletes. If you don't believe me, just ask Michael Jordan, Larry Bird and, more recently, Kobe Bryant, Dwight Howard and LeBron James. All have appeared in McDonald's advertisements, and in the famous "The Showdown" television advertisement, Bird and Jordan have a shooting contest over a Big Mac.

But it's not just about junk food. When you pull into a McDonald's today, you likely will find more healthy items on its menu than you may have in your own refrigerator. So it gives me pause to even put it in the "junk food" category.

Kiss the Chef

One of the things that has always generated curiosity and conversation has been the "special sauce" on McDonald's Big Macs. Remember singing that jingle two all-beef patties, special sauce, lettuce, cheese, pickles, onion, on a sesame seed bun?

However, according to my wise uncle, it was never a secret at all. He always insisted McDonald's was fooling everyone and selling Big Macs by the billions with what really amounts to Thousand Island dressing. You may have thought the same thing.

Thanks to McDonald's, the truth is now revealed. In a recent demonstration posted on the New York Daily News' Web site, McDonald's executive chef, Dan Coudreaut shows father everywhere -- many of whom probably sang that jingle when they were kids -- how they can become real-life superheroes to their children by making that special sauce at home.

He says all you need is store-bought mayonnaise, sweet pickle relish, classic yellow mustard, white wine vinegar, garlic powder, onion powder and paprika. Put those ingredients in a bowl, stir, and voila -- you have the "special sauce."

The last item grabbed my attention: I've always thought about paprika as an obscure spice and never was quite sure what to do with. According to Coudreaut, it serves to add a little flavor while enhancing the color.

So the next time we are singing that famous jingle two all-beef patties, special sauce, lettuce, cheese, pickles, onion, on a sesame seed bun, the "special sauce" will be that much more special, because now it comes with a kiss, from Dad.

What all this demonstrates is how savvy and innovative McDonald's is with its marketing. It shows how secure the company is in its brand and ingredients. It's also a fun lesson in public relations.

Bottom Line

Over the past decade, I would put McDonald's performance up against that of any other company. During the period, it has increased annual sales by at least 6% while more than doubling its operating margins.

Even more remarkable is that McDonald's boasts an almost 30% operating margin over the past five years, while its closest competitor comes in at just 14%.

In spite of this, the company seems to be mentioned rarely on Wall Street when the topic is the best-run businesses. McDonald's takes the disrespect in stride and focuses solely on producing solid quarterly performance while reminding investors what is possible when innovation meets sound execution.

At the time of publication, the author was long MCD and AAPL.

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