Coca-Cola CEO James Quincey remains confident that the recent E. coli outbreak linked to McDonald’s will not impact Coca-Cola’s sales. During the company’s third-quarter earnings call, Quincey assured investors that Coca-Cola’s business is unlikely to suffer despite concerns about the outbreak.
“When one looks at what’s in the media so far, in terms of the states that have been affected, I would say at this stage it’s not going to be a large, significant impact to the business,” Quincey explained.
A Long-standing Partnership Unaffected
Coca-Cola and McDonald’s share a strong relationship that spans nearly seven decades. This collaboration has evolved into a partnership that benefits both companies, mainly through marketing initiatives. For instance, Coca-Cola contributed marketing funds to McDonald’s $5 value meal this summer to attract franchisees. The meal deal includes a small Coke beverage, aligning both brands’ efforts to drive sales.
“We’re a big partner of McDonald’s, they’re a big partner of ours,” Quincey said. “We’ll be helping them in any way we can as they work through whatever’s happening here.”
CDC Links E. coli Outbreak to McDonald’s Burgers
The Centers for Disease Control and Prevention (CDC) announced that the E. coli outbreak has been traced to McDonald’s Quarter Pounder burgers. Affected states include Colorado, Kansas, Utah, Wyoming, and other regions. Investigators suspect either the slivered onions or the fresh beef patties used exclusively in the Quarter Pounder to be the source of contamination. The CDC noted that cooking beef to the appropriate temperature should eliminate the bacteria.
McDonald’s Takes Swift Action
In response to the outbreak, McDonald’s temporarily removed Quarter Pounders from menus in the affected states and halted the use of slivered onions in those regions. The company emphasized the safety of its other menu items to reassure customers.
“We are very confident that you can go to McDonald’s and enjoy our classics,” said McDonald’s USA President Joe Erlinger. “We took swift action yesterday to remove the Quarter Pounder from our menu.”
The Challenge of Changing Consumer Behavior
The outbreak is challenging for both Coca-Cola and McDonald’s, as consumers have been spending less at restaurants overall. To attract customers, McDonald’s has been relying on discounts, with Coca-Cola supporting these efforts through promotional campaigns. Despite a general slowdown in spending, Coca-Cola reported better-than-expected third-quarter earnings driven by increased pricing. However, the company’s shares dipped by more than 2% in morning trading.
A Resilient Partnership Amid Challenges
While McDonald’s works to resolve the E. coli issue, Coca-Cola remains committed to supporting its largest restaurant partner. Despite market pressures, the beverage giant’s steady financial performance reflects the strength of its brand and strategic alliances. Coca-Cola and McDonald’s continue to demonstrate resilience, ensuring both companies maintain momentum even in difficult times.
“We’ll be helping them in any way we can as they work through whatever’s happening here,” Quincey reiterated, highlighting the ongoing partnership between the two companies.
Coca-Cola remains optimistic that its relationship with McDonald’s will weather this outbreak without significant disruption to sales. Both companies are focused on maintaining customer trust and satisfaction while navigating the complexities of changing consumer behavior and public health concerns.
