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These are the user uploaded subtitles that are being translated: 1 00:00:03,307 --> 00:00:04,437 - 17,000 Chicken McNuggets 2 00:00:04,482 --> 00:00:05,612 are eaten every second. 3 00:00:06,963 --> 00:00:09,493 Five million buckets of Kentucky Fried Chicken 4 00:00:09,531 --> 00:00:10,531 are sold every month. 5 00:00:12,055 --> 00:00:15,185 And $10 billion of Chick-fil-A sandwiches 6 00:00:15,232 --> 00:00:16,542 are sold per year. 7 00:00:17,887 --> 00:00:20,187 Chicken accounts for almost 20% 8 00:00:20,237 --> 00:00:24,677 of the $640 billion global fast-food industry. 9 00:00:26,678 --> 00:00:28,458 But 50 years ago, 10 00:00:28,506 --> 00:00:30,636 chicken sandwiches aren't even on the menu. 11 00:00:30,682 --> 00:00:32,682 - I think we think of the fast-food menu 12 00:00:32,728 --> 00:00:35,248 as having five different varieties of chicken sandwich, 13 00:00:35,296 --> 00:00:38,726 except back in the day, it was a simple burger, 14 00:00:38,777 --> 00:00:40,037 but not much else. 15 00:00:41,345 --> 00:00:43,035 - Until new government guidelines 16 00:00:43,086 --> 00:00:45,126 upend the fast-food industry- 17 00:00:45,175 --> 00:00:48,085 - We gotta find a way to stop the bleeding. 18 00:00:48,135 --> 00:00:50,745 - And a stunning betrayal- 19 00:00:50,789 --> 00:00:53,529 - We are going to remake Burger King in McDonald's image. 20 00:00:54,880 --> 00:00:57,580 - There is a true corporate warfare going on. 21 00:00:57,622 --> 00:01:01,242 - Sparks a new era of rivalry and innovation- 22 00:01:01,278 --> 00:01:04,188 - If we can get the kids, the parents will come. 23 00:01:05,935 --> 00:01:07,585 - Gotta be, uh, dippable. 24 00:01:08,720 --> 00:01:10,370 - And launches some of the most iconic 25 00:01:10,418 --> 00:01:13,548 fast-food products ever created. 26 00:01:13,595 --> 00:01:15,075 - Let's go with all four. 27 00:01:16,337 --> 00:01:18,507 - Can you do this with chicken? 28 00:01:40,448 --> 00:01:42,148 - It's 1972. 29 00:01:42,189 --> 00:01:44,969 The United States is in the throes of the Vietnam War, 30 00:01:45,017 --> 00:01:48,457 and the economic boom of the past two decades is fading. 31 00:01:48,499 --> 00:01:50,149 - The 1970s were a bad time, 32 00:01:50,197 --> 00:01:52,457 bad time economically for the United States. 33 00:01:52,503 --> 00:01:55,163 You had this phenomenon called "stagflation". 34 00:01:55,202 --> 00:01:56,422 You'd have high unemployment 35 00:01:56,464 --> 00:01:59,254 and high inflation at the same time. 36 00:01:59,293 --> 00:02:01,473 - Americans are looking for filling meals 37 00:02:01,512 --> 00:02:05,172 at a good value, and they increasingly turn to fast food. 38 00:02:05,212 --> 00:02:07,132 By the early-1970s, 39 00:02:07,170 --> 00:02:08,650 it accounts for nearly one-quarter 40 00:02:08,693 --> 00:02:11,653 of the $6 billion the country spends on food. 41 00:02:12,958 --> 00:02:15,218 - The wages are going down and you do see 42 00:02:15,265 --> 00:02:18,615 not a kind of celebration of convenience, 43 00:02:18,660 --> 00:02:20,490 but convenience is a real necessity. 44 00:02:21,489 --> 00:02:23,579 - Some type of fast food outlet 45 00:02:23,621 --> 00:02:26,621 was recognizable by American consumers. 46 00:02:26,668 --> 00:02:28,278 Whether they lived in suburbs 47 00:02:28,322 --> 00:02:30,192 or they lived in the inner city, 48 00:02:30,237 --> 00:02:33,677 people had a sense of what fast food products were. 49 00:02:33,718 --> 00:02:35,328 They knew what a burger was. 50 00:02:35,372 --> 00:02:38,202 They knew that they should be able to get it cheap and fast. 51 00:02:39,159 --> 00:02:40,809 - Almost since its inception, 52 00:02:40,856 --> 00:02:44,856 one chain has dominated the McDonald's. 53 00:02:51,388 --> 00:02:53,648 And after 15 years, 54 00:02:53,695 --> 00:02:56,255 Ray Kroc still rules the McDonald's empire 55 00:02:56,306 --> 00:02:58,086 as chairman of the board, 56 00:02:58,134 --> 00:03:01,884 with company President Fred Turner as his right-hand man. 57 00:03:01,920 --> 00:03:03,310 - Ray Kroc was a hustler. 58 00:03:03,357 --> 00:03:04,787 He was a hard worker. 59 00:03:04,836 --> 00:03:07,536 He was incredibly shrewd. 60 00:03:07,578 --> 00:03:11,058 Very strident, very opinionated boss. 61 00:03:14,368 --> 00:03:17,068 - It has to be a set leader with a set goal, 62 00:03:17,109 --> 00:03:19,679 which I call, he's the tip of the spear. 63 00:03:19,721 --> 00:03:21,161 If the spear doesn't have a tip, 64 00:03:21,201 --> 00:03:23,291 it can't drive through the target. 65 00:03:23,333 --> 00:03:26,033 - Now, competition is on the rise. 66 00:03:26,075 --> 00:03:27,685 Just 20 years before, 67 00:03:28,991 --> 00:03:31,561 there were less than a few thousand fast food restaurants. 68 00:03:31,602 --> 00:03:35,482 But by the mid-1970s, there are nearly 60,000, 69 00:03:35,519 --> 00:03:38,829 representing over 300 rival chains. 70 00:03:38,870 --> 00:03:42,000 - The fast food industry is bigger 71 00:03:42,047 --> 00:03:45,087 than anyone had ever expected by the 1970s 72 00:03:45,137 --> 00:03:48,267 and there's a true corporate warfare going on. 73 00:03:48,315 --> 00:03:51,925 They are pushing very hard against each other. 74 00:03:51,970 --> 00:03:53,450 - Five years after releasing 75 00:03:53,494 --> 00:03:55,284 his signature Big Mac, 76 00:03:55,322 --> 00:03:57,932 Kroc is desperate to beat back the competition 77 00:03:57,976 --> 00:03:59,276 with something new. 78 00:03:59,326 --> 00:04:01,886 And having discovered the Big Mac, Filet-O-Fish, 79 00:04:01,937 --> 00:04:04,457 and more at individual franchises, 80 00:04:04,505 --> 00:04:07,595 Kroc hits the road again, looking to strike gold. 81 00:04:11,338 --> 00:04:15,598 - It starts with a toasted buttered English muffin. 82 00:04:17,344 --> 00:04:21,224 - In California, franchise owner Herb Peterson 83 00:04:21,261 --> 00:04:23,611 pitches Kroc an item unlike anything else 84 00:04:23,654 --> 00:04:25,274 on McDonald's menu. 85 00:04:25,308 --> 00:04:29,828 - Next, a slice of grilled Canadian bacon, 86 00:04:31,009 --> 00:04:34,839 followed by a fried egg with the yolk broken, 87 00:04:34,883 --> 00:04:40,453 formed in a Teflon circle, and a slice of American cheese. 88 00:04:43,370 --> 00:04:44,980 It's my take on eggs Benedict. 89 00:04:48,592 --> 00:04:51,422 - At this time, breakfast at a fast food place 90 00:04:51,465 --> 00:04:52,635 was unheard of. 91 00:04:52,683 --> 00:04:54,603 If you had breakfast in the morning, 92 00:04:54,642 --> 00:04:57,122 you made breakfast in the morning at home. 93 00:04:58,515 --> 00:04:59,335 - Thoughts? 94 00:05:00,212 --> 00:05:02,822 - It's interesting. 95 00:05:06,393 --> 00:05:07,183 - Don? 96 00:05:09,221 --> 00:05:10,531 - Sorry. 97 00:05:10,571 --> 00:05:12,011 Just don't see it. 98 00:05:15,053 --> 00:05:18,193 - Donald Smith, who was about third in line, CEO, 99 00:05:18,230 --> 00:05:20,020 very successful employee- 100 00:05:20,058 --> 00:05:23,018 - By all accounts, a brilliant young executive. 101 00:05:25,020 --> 00:05:27,020 - Our whole model is based on the fact 102 00:05:27,065 --> 00:05:28,195 that we don't serve anything 103 00:05:28,240 --> 00:05:29,680 that requires plates, forks, or knives. 104 00:05:42,080 --> 00:05:44,340 - Now it's a sandwich; problem solved. 105 00:05:46,737 --> 00:05:49,737 - Life at McDonald's could be a pretty strict hierarchy. 106 00:05:49,784 --> 00:05:53,534 When Ray Kroc was in charge, it was his way or the highway. 107 00:05:55,137 --> 00:05:56,267 - I love it. 108 00:05:56,312 --> 00:05:58,882 Congratulations. - Thank you, thank you. 109 00:05:59,750 --> 00:06:01,060 - Give us a moment? 110 00:06:01,099 --> 00:06:02,359 - Yeah, sure. - Great. 111 00:06:04,755 --> 00:06:06,405 Why are my franchise operators 112 00:06:06,453 --> 00:06:09,333 giving me better ideas than both of you combined? 113 00:06:09,369 --> 00:06:11,019 - I'm not a chef. 114 00:06:11,066 --> 00:06:12,886 It's not my job. 115 00:06:12,937 --> 00:06:15,717 - Then remind me what it is I'm paying you for. 116 00:06:22,773 --> 00:06:24,253 - In 1976, 117 00:06:24,296 --> 00:06:28,336 McDonald's launches the Egg McMuffin nationwide. 118 00:06:28,388 --> 00:06:29,908 - Breakfast is a huge risk. 119 00:06:29,954 --> 00:06:33,744 It requires new supplies, so many new suppliers, 120 00:06:33,784 --> 00:06:36,874 so many more employee hours, new menus. 121 00:06:36,918 --> 00:06:40,438 But for Ray Kroc, breakfast represents this chance 122 00:06:40,487 --> 00:06:45,447 to expand McDonald's grip over the American culinary scene. 123 00:06:45,492 --> 00:06:48,232 - The gamble immediately pays off, 124 00:06:48,277 --> 00:06:52,277 and breakfast soon makes up 20% of McDonald's annual sales. 125 00:06:53,804 --> 00:06:56,764 - Americans are time-strapped and they need food quickly, 126 00:06:56,807 --> 00:06:58,367 and they want something that's cheap 127 00:06:58,418 --> 00:07:00,378 and they want something that's easy to get 128 00:07:00,420 --> 00:07:03,120 and that will make their families happy. 129 00:07:03,161 --> 00:07:05,211 - The idea that you could drive up your car 130 00:07:05,250 --> 00:07:07,170 and order a McMuffin and a cup of coffee 131 00:07:07,209 --> 00:07:09,469 and just eat your breakfast on your way to work, 132 00:07:09,516 --> 00:07:12,036 that was new, and people loved it, 133 00:07:12,083 --> 00:07:14,303 and it was a huge success for McDonald's. 134 00:07:17,175 --> 00:07:18,735 - Kroc's vision revolutionizes 135 00:07:18,786 --> 00:07:20,266 the American breakfast. 136 00:07:20,309 --> 00:07:22,569 And soon, one out of every four breakfasts 137 00:07:22,616 --> 00:07:25,746 eaten outside the home is at a fast food restaurant. 138 00:07:28,709 --> 00:07:31,319 By dominating all three meals of the day, 139 00:07:31,363 --> 00:07:36,333 McDonald's remains untouchable for now. 140 00:07:43,550 --> 00:07:47,340 1,200 miles away, another fast food chain 141 00:07:47,379 --> 00:07:51,379 is a distant second to Burger King. 142 00:07:51,427 --> 00:07:54,777 - Burger King was scrambling to keep up. 143 00:07:54,822 --> 00:07:58,302 There was no real true culinary innovation 144 00:07:58,347 --> 00:07:59,997 to keep pace with McDonald's, 145 00:08:00,044 --> 00:08:03,354 and McDonald's was greater, faster, 146 00:08:03,395 --> 00:08:05,485 more technically advanced than Burger King. 147 00:08:07,356 --> 00:08:08,616 - The company is owned 148 00:08:08,662 --> 00:08:11,012 by the Pillsbury Corporation, 149 00:08:11,055 --> 00:08:14,015 which purchased it from original founders John McLamore 150 00:08:14,058 --> 00:08:16,758 and Dave Edgerton a decade earlier, 151 00:08:16,800 --> 00:08:19,500 and sales have been declining ever since. 152 00:08:21,413 --> 00:08:23,943 - When a restaurant chain like Burger King 153 00:08:23,981 --> 00:08:26,381 gets purchased by a larger corporate entity, 154 00:08:26,418 --> 00:08:28,508 sometimes they have to struggle for attention 155 00:08:28,551 --> 00:08:29,681 in the parent company. 156 00:08:34,078 --> 00:08:36,338 - Burger King was sort of without its compass. 157 00:08:36,385 --> 00:08:38,035 When a founder leaves a company, 158 00:08:38,082 --> 00:08:40,782 a lot of the original spirit 159 00:08:40,824 --> 00:08:43,224 that guided its creation and its innovation 160 00:08:43,261 --> 00:08:45,091 throughout the years leaves. 161 00:08:45,133 --> 00:08:48,183 - After years of watching Burger King lag behind, 162 00:08:48,223 --> 00:08:50,973 Pillsbury is on the hunt for new leadership. 163 00:08:51,008 --> 00:08:52,138 And they're not just looking 164 00:08:52,183 --> 00:08:54,233 for a marginal increase in sales. 165 00:08:54,272 --> 00:08:57,542 They wanna take the fight directly to McDonald's. 166 00:09:07,024 --> 00:09:09,854 - So, you guys think this could work, huh? 167 00:09:09,897 --> 00:09:11,067 - Definitely. 168 00:09:13,291 --> 00:09:14,821 - Yeah? 169 00:09:14,858 --> 00:09:16,988 - Don, I've got a call for you on line four. 170 00:09:20,647 --> 00:09:21,737 - Don Smith. 171 00:09:23,998 --> 00:09:25,568 No, you're not on speakerphone. 172 00:09:27,610 --> 00:09:28,610 Uh-huh. 173 00:09:28,655 --> 00:09:29,735 Yes, I am. 174 00:09:30,700 --> 00:09:31,570 Got it. 175 00:09:32,746 --> 00:09:33,566 Thanks. 176 00:09:37,925 --> 00:09:38,745 - Who was that? 177 00:09:41,668 --> 00:09:42,758 - My wife. 178 00:09:44,714 --> 00:09:46,764 - Can we do some work now? 179 00:09:46,803 --> 00:09:48,543 All right. 180 00:09:48,588 --> 00:09:52,288 Fred, can you show me some numbers- 181 00:10:05,039 --> 00:10:05,949 - Don Smith. 182 00:10:07,084 --> 00:10:09,434 Pleasure finally meeting you in person. 183 00:10:09,696 --> 00:10:11,086 Please, have a seat. 184 00:10:15,658 --> 00:10:18,268 Thank you for agreeing to see us on such short notice. 185 00:10:18,487 --> 00:10:20,317 - Forgive me for being blunt, 186 00:10:20,358 --> 00:10:22,488 but are you gonna tell me what this is about? 187 00:10:22,534 --> 00:10:24,104 You were very cryptic on the phone. 188 00:10:24,145 --> 00:10:25,485 - We had to take precautions, 189 00:10:25,537 --> 00:10:27,147 given the nature of this meeting. 190 00:10:27,191 --> 00:10:29,631 - And what exactly is the nature of this meeting? 191 00:10:32,327 --> 00:10:34,807 - We want you to come work for Burger King, 192 00:10:36,374 --> 00:10:38,334 as president and CEO. 193 00:10:39,769 --> 00:10:43,769 - I'm flattered, but I already have a job, 194 00:10:43,817 --> 00:10:45,337 and it's been very good to me. 195 00:10:49,866 --> 00:10:50,646 What's this? 196 00:10:51,694 --> 00:10:53,004 - Your starting salary. 197 00:11:02,574 --> 00:11:03,364 Plus perks. 198 00:11:04,968 --> 00:11:06,708 - When Don Smith gets approached by Pillsbury, 199 00:11:06,753 --> 00:11:10,323 he has to weigh all of these opposing factors, you know, 200 00:11:10,365 --> 00:11:12,015 "Do I stay loyal to Ray Kroc? 201 00:11:12,062 --> 00:11:13,672 "Do I stay loyal to McDonald's? 202 00:11:13,716 --> 00:11:15,756 "Or do I take this opportunity 203 00:11:15,805 --> 00:11:19,635 "to turn something that, in Burger King, 204 00:11:19,679 --> 00:11:22,159 "could grow into a huge juggernaut as well 205 00:11:22,203 --> 00:11:23,683 "to its full potential?" 206 00:11:31,516 --> 00:11:34,346 - Let's get started. 207 00:11:40,830 --> 00:11:42,570 - By the mid-1970s, white-collar workers 208 00:11:42,614 --> 00:11:44,624 are increasingly looking for shortcuts 209 00:11:44,660 --> 00:11:46,710 on their climb up the corporate ladder, 210 00:11:48,185 --> 00:11:50,875 chasing faster success and bigger paydays. 211 00:11:52,233 --> 00:11:54,193 - An American dream for this generation 212 00:11:54,235 --> 00:11:55,755 that has the disposable income 213 00:11:55,802 --> 00:11:57,892 to be able to afford that house 214 00:11:57,934 --> 00:12:00,764 and to afford those luxury items which'll ultimately help 215 00:12:00,807 --> 00:12:04,637 to help them claim a piece of that dream in a tangible way. 216 00:12:05,942 --> 00:12:08,292 - Workers in their 20s and 30s are changing jobs 217 00:12:08,336 --> 00:12:11,076 three times more than their previous generation did, 218 00:12:11,121 --> 00:12:14,301 choosing quicker advancement over loyalty, 219 00:12:14,342 --> 00:12:17,132 like former Ray Kroc protege Don Smith. 220 00:12:18,650 --> 00:12:23,090 - Famously, Don Smith felt he would have no upward mobility 221 00:12:23,133 --> 00:12:25,013 in the corporate structure of McDonald's. 222 00:12:25,048 --> 00:12:27,138 He felt so close to the top 223 00:12:27,181 --> 00:12:29,231 with no potential for advancement, 224 00:12:29,270 --> 00:12:34,060 so he was recruited to go head Burger King. 225 00:12:41,412 --> 00:12:44,462 - Upon learning of Don Smith's defection, 226 00:12:44,502 --> 00:12:47,072 it's safe to say that anyone within a half-mile distance 227 00:12:47,114 --> 00:12:49,074 of Ray Kroc probably heard his voice. 228 00:12:49,116 --> 00:12:51,946 He's affected by the lack of loyalty. 229 00:12:51,988 --> 00:12:53,468 He takes it personally, 230 00:12:53,511 --> 00:12:57,691 and that's how he's always run his businesses. 231 00:12:57,733 --> 00:13:00,133 - To fight back against Burger King's coup, 232 00:13:00,170 --> 00:13:02,610 Kroc makes a new hire of his own, 233 00:13:02,651 --> 00:13:05,651 bringing in a secret weapon not for the boardroom- 234 00:13:08,004 --> 00:13:09,404 - Follow me. 235 00:13:10,180 --> 00:13:11,920 - But for the kitchen. 236 00:13:15,011 --> 00:13:17,671 - Everything that you need will be at your disposal. 237 00:13:18,710 --> 00:13:20,150 Find something that's missing? 238 00:13:21,235 --> 00:13:22,495 Say so and it's yours. 239 00:13:23,628 --> 00:13:26,628 - Kroc, in kind of an unprecedented move, 240 00:13:26,675 --> 00:13:29,155 hires a gourmet chef named Rene Arend 241 00:13:30,374 --> 00:13:33,294 to become kind of a culinary consultant. 242 00:13:33,334 --> 00:13:37,034 - Rene Arend had cooked meals for Hollywood stars, 243 00:13:37,077 --> 00:13:40,947 Belgian royalty, French royalty, and Queen Elizabeth. 244 00:13:40,994 --> 00:13:43,264 For Ray Kroc, creating something 245 00:13:43,300 --> 00:13:45,260 that is unique to McDonald's 246 00:13:45,302 --> 00:13:49,352 requires thinking that is outside of the box. 247 00:13:49,393 --> 00:13:51,663 - Brought you here to innovate. 248 00:13:51,700 --> 00:13:53,790 Breakfast, lunch, and dinner. 249 00:13:53,833 --> 00:13:55,183 You up for that? 250 00:13:55,225 --> 00:13:56,005 - Certainly. 251 00:13:57,488 --> 00:14:00,708 - The gourmet chef like Rene Arend 252 00:14:00,752 --> 00:14:02,712 in a McDonald's organization 253 00:14:02,754 --> 00:14:07,154 did not follow simple logic or common sense, 254 00:14:07,194 --> 00:14:10,414 but Ray Kroc was ready to take the big risk 255 00:14:10,458 --> 00:14:11,978 to have that big reward. 256 00:14:14,244 --> 00:14:15,774 - Ray Kroc now has 257 00:14:15,811 --> 00:14:18,681 the foremost culinary team in fast food. 258 00:14:20,555 --> 00:14:25,205 But 1,300 miles away, Don Smith is formulating a battle plan 259 00:14:25,255 --> 00:14:27,205 to take on his former employer. 260 00:14:29,869 --> 00:14:32,869 - His eyes are on the prize, and the prize is growth. 261 00:14:32,915 --> 00:14:35,915 The prize is beating McDonald's. 262 00:14:35,962 --> 00:14:37,402 - To analyze Burger King's 263 00:14:37,441 --> 00:14:38,881 performance and sales data, 264 00:14:38,921 --> 00:14:42,581 Smith utilizes a tool not 265 00:14:42,620 --> 00:14:45,010 a company-wide computer system. 266 00:14:47,625 --> 00:14:51,145 Released just 13 years earlier, the first supercomputer 267 00:14:51,194 --> 00:14:53,944 was roughly the size of four filing cabinets 268 00:14:53,980 --> 00:14:57,940 and cost the modern equivalent of $60 million. 269 00:14:57,984 --> 00:15:01,424 Nicknamed "Big Mamma," Burger King's system is expensive 270 00:15:01,465 --> 00:15:03,595 and rudimentary by today's standards. 271 00:15:04,991 --> 00:15:07,951 - It was a way of tracking how much product 272 00:15:07,994 --> 00:15:10,004 was being brought into restaurants 273 00:15:10,039 --> 00:15:12,219 and how much product was being brought out. 274 00:15:12,259 --> 00:15:14,609 And it was supposed to reduce theft. 275 00:15:14,652 --> 00:15:17,442 It was supposed to really focus on efficiency. 276 00:15:22,834 --> 00:15:26,234 - Last year, McDonald's sales hit $3.7 billion. 277 00:15:26,273 --> 00:15:27,803 Know what Burger King's were? 278 00:15:27,839 --> 00:15:29,099 A quarter that. 279 00:15:29,145 --> 00:15:31,095 They offer breakfast, we don't. 280 00:15:31,147 --> 00:15:32,577 They offer delicious fries. 281 00:15:32,627 --> 00:15:34,237 Ours are an embarrassment. 282 00:15:34,281 --> 00:15:38,021 We have an outrageously expensive computer machine 283 00:15:38,067 --> 00:15:40,107 that is more concerned with catching workers 284 00:15:40,156 --> 00:15:41,846 who put too many fries in a bag 285 00:15:41,897 --> 00:15:44,937 than it is about how we can better serve the customer. 286 00:15:44,987 --> 00:15:47,207 - What this system did in many ways, 287 00:15:47,250 --> 00:15:50,300 it depersonalized the customer experience 288 00:15:50,340 --> 00:15:52,650 and it didn't allow workers to really focus 289 00:15:52,690 --> 00:15:55,820 on the quality of the product they were delivering. 290 00:15:55,867 --> 00:15:58,127 - We are going to remake Burger King in McDonald's image; 291 00:15:58,174 --> 00:16:01,004 learn from their mistakes, capitalize on their failures. 292 00:16:01,047 --> 00:16:04,617 That means doing whatever it is that we have to do to win. 293 00:16:10,360 --> 00:16:12,410 - Smith begins to overhaul Burger King 294 00:16:12,449 --> 00:16:16,499 from the ground up, a plan he dubs Operation Phoenix. 295 00:16:21,110 --> 00:16:23,850 - Operation Phoenix is a calculated attempt 296 00:16:23,895 --> 00:16:27,415 to bring a lot of the business attributes of McDonald's 297 00:16:27,464 --> 00:16:29,554 into the Burger King system. 298 00:16:29,597 --> 00:16:31,637 - He knew all the McDonald's practices. 299 00:16:31,686 --> 00:16:33,856 He knew what automation they used, 300 00:16:33,905 --> 00:16:37,295 whether it was the type of shortening they used. 301 00:16:37,344 --> 00:16:39,004 Heck, he even used the same kind 302 00:16:39,041 --> 00:16:40,961 of digital french fry machine. 303 00:16:41,000 --> 00:16:43,050 He knew what gave them a competitive edge, 304 00:16:43,089 --> 00:16:44,259 and he turned around 305 00:16:44,307 --> 00:16:46,347 and gave all those things to Burger King. 306 00:16:48,529 --> 00:16:50,359 - In the summer of 1977, 307 00:16:50,400 --> 00:16:53,060 just months after leaving McDonald's, 308 00:16:53,099 --> 00:16:55,359 Don Smith switches Burger King's fries 309 00:16:55,405 --> 00:16:57,145 to the same Idaho potatoes 310 00:16:57,190 --> 00:17:00,240 that have become his former employer's signature. 311 00:17:00,280 --> 00:17:03,540 And he starts development on a competing breakfast sandwich 312 00:17:03,587 --> 00:17:06,717 that will one day lead to the Croissan'wich. 313 00:17:06,764 --> 00:17:10,034 - One of the things that Don Smith brings to Burger King 314 00:17:10,072 --> 00:17:12,732 is the focus on the customer. 315 00:17:12,770 --> 00:17:15,430 That focus on how customers at that restaurant 316 00:17:15,469 --> 00:17:17,559 are experiencing the food, 317 00:17:17,601 --> 00:17:21,001 Don reintroduces that to Burger King culture. 318 00:17:21,040 --> 00:17:23,650 - In the immediate aftermath of Operation Phoenix, 319 00:17:23,694 --> 00:17:26,574 Burger King's sales grow, the menu expands, 320 00:17:26,610 --> 00:17:30,880 and they begin to sort of get their mojo back. 321 00:17:30,919 --> 00:17:32,139 - Over the next year, 322 00:17:32,181 --> 00:17:36,191 Burger King opens over a thousand new restaurants 323 00:17:36,229 --> 00:17:38,579 in a direct assault on McDonald's. 324 00:17:47,544 --> 00:17:50,424 - For Ray Kroc, seeing one of your former proteges 325 00:17:50,460 --> 00:17:55,340 on the magazine's cover as the leader of another company 326 00:17:55,378 --> 00:17:56,548 must've driven him mad. 327 00:17:58,642 --> 00:18:02,042 - And Ray Kroc may finally have met his match. 328 00:18:20,490 --> 00:18:23,620 - By 1977, driven by burger chains 329 00:18:23,667 --> 00:18:26,977 like McDonald's and Burger King, fast food is generating 330 00:18:27,018 --> 00:18:30,278 a staggering $20 billion a year in sales. 331 00:18:31,588 --> 00:18:33,628 But that same year, the United States Senate 332 00:18:33,677 --> 00:18:36,157 releases the first set of dietary guidelines 333 00:18:36,202 --> 00:18:37,862 in the nation's history. 334 00:18:37,899 --> 00:18:41,249 They recommend a reduction in consumption of salt, sugar, 335 00:18:41,294 --> 00:18:44,654 and saturated fat, a substance prevalent in red meat. 336 00:18:47,648 --> 00:18:49,648 - Americans have never really had 337 00:18:49,693 --> 00:18:53,573 that level of instruction from a government body 338 00:18:53,610 --> 00:18:56,140 in terms of dietary needs and nutrition. 339 00:18:57,310 --> 00:19:01,100 - Physicians begin to observe a relationship 340 00:19:01,140 --> 00:19:03,660 between the consumption of red meat and heart attack. 341 00:19:03,707 --> 00:19:05,797 A group of people would leave the office 342 00:19:05,840 --> 00:19:08,540 and they would say, "Well, what do you want to eat?" 343 00:19:08,582 --> 00:19:09,842 And one of them would say, 344 00:19:09,887 --> 00:19:11,667 "Look, I don't wanna eat red meat today. 345 00:19:11,715 --> 00:19:13,755 "I hear it's bad for you." 346 00:19:13,804 --> 00:19:17,334 And they would bypass McDonald's and go someplace else. 347 00:19:18,722 --> 00:19:20,682 - At the time, the average American consumes 348 00:19:20,724 --> 00:19:23,684 almost 100 pounds of red meat a year, 349 00:19:23,727 --> 00:19:26,857 a 30% increase over just the last two decades. 350 00:19:30,560 --> 00:19:33,820 And McDonald's menu is driven by the original hamburger, 351 00:19:33,868 --> 00:19:36,698 the Quarter-Pounder, and the Big Mac. 352 00:19:36,740 --> 00:19:38,700 - These are last month's sales figures. 353 00:19:41,528 --> 00:19:46,528 And this is compared to where we were this month last year. 354 00:19:52,843 --> 00:19:56,373 - We gotta find a way to stop the bleeding. 355 00:19:58,109 --> 00:19:59,889 - To diversify McDonald's offerings, 356 00:19:59,937 --> 00:20:03,377 Kroc unleashes his secret weapon, Rene Arend. 357 00:20:05,291 --> 00:20:08,251 The five-star chef has been experimenting with a new item 358 00:20:08,294 --> 00:20:10,914 that could be the perfect alternative to beef, 359 00:20:10,948 --> 00:20:12,908 and he finally has a prototype. 360 00:20:39,325 --> 00:20:40,755 - It's good. 361 00:20:42,284 --> 00:20:43,764 It's real good. 362 00:20:45,983 --> 00:20:47,423 But it's not it. 363 00:20:51,032 --> 00:20:52,772 - At the time, Americans eat 364 00:20:52,816 --> 00:20:55,246 half as much chicken per year as they do today. 365 00:20:55,297 --> 00:20:56,687 And while Kentucky Fried Chicken 366 00:20:56,733 --> 00:20:59,563 is known for their 11 famous herbs and spices, 367 00:20:59,606 --> 00:21:01,776 chicken is practically nonexistent 368 00:21:01,825 --> 00:21:03,435 at other fast food chains. 369 00:21:05,655 --> 00:21:07,785 - People want fried chicken, they go to KFC. 370 00:21:09,224 --> 00:21:10,624 We need something original. 371 00:21:15,839 --> 00:21:18,189 - Not a lotta places were serving chicken 372 00:21:18,233 --> 00:21:20,283 in the 1960s and '70s. 373 00:21:20,322 --> 00:21:22,412 Kentucky Fried Chicken has already cornered 374 00:21:23,282 --> 00:21:24,982 much of the fried chicken market. 375 00:21:26,372 --> 00:21:28,422 - KFC's chicken is offered by the bucket 376 00:21:28,461 --> 00:21:30,461 with wings, thighs, and breasts, 377 00:21:30,506 --> 00:21:33,156 all on the bone and in various sizes, 378 00:21:33,204 --> 00:21:37,254 a far cry from McDonald's trademark consistency. 379 00:21:37,296 --> 00:21:41,256 - Ray Kroc is obsessed with maintaining control 380 00:21:41,300 --> 00:21:44,390 and guaranteeing that on each step of the way, 381 00:21:44,433 --> 00:21:46,963 every McDonald's item would be the same. 382 00:21:51,788 --> 00:21:54,698 - Creating chicken that would scale 383 00:21:54,748 --> 00:21:57,488 and reproduce and actually look the same 384 00:21:57,533 --> 00:22:00,143 and taste the same everywhere was a real challenge. 385 00:22:00,188 --> 00:22:01,968 It's labor-intensive. 386 00:22:02,016 --> 00:22:03,626 Beef is easy. 387 00:22:03,670 --> 00:22:04,890 Chicken is hard. 388 00:22:05,802 --> 00:22:07,412 - Ray Kroc gives Rene Arend 389 00:22:09,545 --> 00:22:13,195 find a way to create a uniform repeatable chicken dish 390 00:22:13,244 --> 00:22:16,684 that will be the same at every location every time. 391 00:22:24,386 --> 00:22:26,556 It's 1978, and new government nutritional guidelines 392 00:22:26,606 --> 00:22:29,696 have ignited a race for red meat alternatives. 393 00:22:37,965 --> 00:22:40,315 But while Don Smith's former employer, McDonald's, 394 00:22:40,359 --> 00:22:44,099 struggles to find a viable new signature product, 395 00:22:44,145 --> 00:22:46,275 Burger King's test kitchen has created 396 00:22:46,321 --> 00:22:49,851 not one new health-conscious sandwich, but four. 397 00:22:49,890 --> 00:22:53,550 - Beef was always beloved by the American population, 398 00:22:53,589 --> 00:22:57,109 but these federal dietary guidelines would have an impact. 399 00:22:57,158 --> 00:23:00,808 Don Smith, he has some new ideas, he has some fresh ideas. 400 00:23:00,857 --> 00:23:03,117 He was very innovative 401 00:23:03,164 --> 00:23:05,734 and brought Burger King new ammunition. 402 00:23:07,081 --> 00:23:08,391 - Ham and cheese, 403 00:23:09,344 --> 00:23:11,614 lean meat chopped steak, 404 00:23:11,651 --> 00:23:13,091 the signature Big Fish sandwich, 405 00:23:13,130 --> 00:23:16,920 and the now-iconic Original Chicken Sandwich, 406 00:23:16,960 --> 00:23:20,750 served on a hoagie roll with lettuce and mayonnaise. 407 00:23:24,751 --> 00:23:26,101 - Let's go with all four. 408 00:23:27,928 --> 00:23:29,448 - The Burger King Chicken Sandwich, 409 00:23:29,495 --> 00:23:32,275 of which I am tremendous, tremendous fan, 410 00:23:32,323 --> 00:23:34,243 those were whole pieces of chicken. 411 00:23:34,282 --> 00:23:37,152 It had almost like a rough pebbly consistency 412 00:23:37,198 --> 00:23:38,588 on the outside of the cutlet. 413 00:23:38,634 --> 00:23:43,204 It had a spicy kind of Italian bread crumb mix on it. 414 00:23:43,247 --> 00:23:44,807 It was rich, it was savory. 415 00:23:44,858 --> 00:23:46,988 I'm salivating talking about it. 416 00:23:47,034 --> 00:23:48,914 Makes me kinda want one today. 417 00:23:48,949 --> 00:23:52,129 - Most importantly, they come by it faster 418 00:23:52,169 --> 00:23:54,479 than McDonald's is able to come by a chicken sandwich 419 00:23:54,520 --> 00:23:55,610 or a chicken item. 420 00:23:56,913 --> 00:23:58,443 - In 1979, 421 00:23:58,480 --> 00:24:01,480 Burger King launches all four new sandwiches, 422 00:24:01,527 --> 00:24:04,657 pouring resources into an aggressive marketing campaign 423 00:24:04,704 --> 00:24:06,314 touting their chicken sandwich 424 00:24:06,357 --> 00:24:09,137 as a more healthful beef alternative. 425 00:24:09,186 --> 00:24:11,576 - In a more diet-conscious era, 426 00:24:11,624 --> 00:24:14,104 people rationalized that chicken was healthier, 427 00:24:14,148 --> 00:24:16,978 despite the fact that it was breaded and deep-fried. 428 00:24:18,065 --> 00:24:19,845 - Smith's strategy works. 429 00:24:19,893 --> 00:24:22,463 With nearly double the menu options of McDonald's, 430 00:24:22,504 --> 00:24:26,684 Burger King's sales jump 30% by the end of the year, 431 00:24:26,726 --> 00:24:28,946 hitting $1.2 billion, 432 00:24:28,989 --> 00:24:32,299 the modern equivalent of nearly $4 billion. 433 00:24:32,340 --> 00:24:35,470 - By the late-1970s, you start to see Burger King 434 00:24:35,517 --> 00:24:37,167 kind of gain ground on McDonald's 435 00:24:37,214 --> 00:24:39,134 for the first time in maybe a decade, 436 00:24:39,173 --> 00:24:41,523 and a lot of that has to do with Don Smith 437 00:24:41,567 --> 00:24:43,307 and being able to make changes 438 00:24:43,351 --> 00:24:45,481 a little bit more quickly to consumer demands. 439 00:24:52,752 --> 00:24:57,282 - 1,200 miles away, Ray Kroc is infuriated 440 00:24:57,321 --> 00:25:00,191 by his former protege's meteoric success. 441 00:25:01,587 --> 00:25:04,067 - Ray Kroc was one of the most competitive people 442 00:25:04,111 --> 00:25:06,331 American business has ever known 443 00:25:06,374 --> 00:25:10,384 and must've viewed Don Smith as the ultimate usurper. 444 00:25:11,597 --> 00:25:13,557 - And he accelerates the timeline 445 00:25:13,599 --> 00:25:15,859 for his new signature chicken dish. 446 00:25:19,256 --> 00:25:20,866 - I wanna launch this chicken initiative 447 00:25:20,910 --> 00:25:22,560 by the end of next quarter. 448 00:25:22,608 --> 00:25:24,038 What do you got for me? 449 00:25:37,840 --> 00:25:39,060 Chicken pot pie? 450 00:25:42,628 --> 00:25:43,718 Not good enough. 451 00:25:45,282 --> 00:25:46,592 Not good enough. 452 00:25:47,720 --> 00:25:49,460 - Chicken pie pot's historically thought of 453 00:25:49,504 --> 00:25:51,944 as peasant food with stew in it, 454 00:25:51,985 --> 00:25:54,065 and Ray Kroc thinks fast food 455 00:25:54,117 --> 00:25:57,287 is something that you could eat with two hands on the road, 456 00:25:57,338 --> 00:26:00,248 so it's not necessarily what he wanted to bring to market. 457 00:26:02,517 --> 00:26:05,087 - It's not right for McDonald's signature chicken dish, 458 00:26:05,999 --> 00:26:07,259 but we'll get there. 459 00:26:17,967 --> 00:26:19,927 - All right, back to work, everyone. 460 00:26:22,972 --> 00:26:25,282 - For the first time in more than a decade, 461 00:26:25,322 --> 00:26:27,592 McDonald's is losing ground to a competitor, 462 00:26:28,630 --> 00:26:32,290 and Ray Kroc will stop at nothing to keep his crown. 463 00:26:49,477 --> 00:26:53,127 - By 1979, Burger King's red meat alternatives, 464 00:26:53,176 --> 00:26:56,086 led by their signature Original Chicken Sandwich, 465 00:26:56,136 --> 00:26:59,566 continue to eat into McDonald's market share. 466 00:26:59,618 --> 00:27:02,488 - Ray Kroc has to reckon with the fact that Americans, 467 00:27:02,533 --> 00:27:05,803 for the first time, are seeing red meat as the enemy, 468 00:27:05,841 --> 00:27:07,151 and he has to adapt. 469 00:27:08,801 --> 00:27:10,761 - Kroc uses his secret weapon, 470 00:27:10,803 --> 00:27:13,683 acclaimed chef Rene Arend, to fight back, 471 00:27:13,719 --> 00:27:17,069 launching new offerings to diversify the menu. 472 00:27:17,113 --> 00:27:19,423 - Rene Arend is really trying to push the envelope 473 00:27:19,463 --> 00:27:22,823 to find a non-beef item to add to McDonald's menu. 474 00:27:22,858 --> 00:27:24,688 The McGobbler, turkey sandwich, 475 00:27:24,730 --> 00:27:29,000 and then there is a Cheddar Melt, but they were flops. 476 00:27:31,562 --> 00:27:33,092 - With their red meat alternatives 477 00:27:33,129 --> 00:27:35,919 coming up short, Fred Turner is looking for new ways 478 00:27:35,958 --> 00:27:38,308 to lure customers back to McDonald's 479 00:27:38,352 --> 00:27:40,532 and buy Rene Arend more time. 480 00:27:40,571 --> 00:27:43,141 - I just spoke with the guys in advertising. 481 00:27:43,183 --> 00:27:44,713 - I don't wanna hear it. 482 00:27:44,750 --> 00:27:46,320 - I think you might. 483 00:27:48,754 --> 00:27:50,494 - What the hell is that? 484 00:27:50,538 --> 00:27:53,848 - If we can get the kids, parents will come. 485 00:28:02,071 --> 00:28:04,681 We offer a kids meal. 486 00:28:06,075 --> 00:28:09,855 A burger, fries, and a cookie, 487 00:28:11,037 --> 00:28:13,557 served in a fun little box the kids can take home. 488 00:28:17,565 --> 00:28:19,825 - Today, kids menus are standard 489 00:28:19,872 --> 00:28:21,482 in sit-down restaurants 490 00:28:21,525 --> 00:28:24,525 and offered by nearly every fast food chain in the country. 491 00:28:24,572 --> 00:28:26,752 But at the time, it's revolutionary. 492 00:28:28,141 --> 00:28:30,531 - Kids were always a huge part of the McDonald's experience 493 00:28:30,578 --> 00:28:32,408 because the food was affordable. 494 00:28:32,449 --> 00:28:34,889 But for a kid to be able to go to a counter 495 00:28:34,930 --> 00:28:36,850 and order a hamburger, that was unique. 496 00:28:40,109 --> 00:28:41,369 - What's this? 497 00:28:43,112 --> 00:28:46,422 - What do kids want more than anything else in the world? 498 00:28:51,120 --> 00:28:51,900 - Toy. 499 00:28:56,909 --> 00:28:59,039 - In June of 1979, 500 00:29:00,782 --> 00:29:03,392 the iconic Happy Meal makes its debut, 501 00:29:04,655 --> 00:29:06,395 and it's a wild success. 502 00:29:07,833 --> 00:29:09,103 - Market towards the child, 503 00:29:09,138 --> 00:29:11,578 don't just market towards the parent, 504 00:29:11,619 --> 00:29:15,359 and kids will be demanding Happy Meals when they're in cars. 505 00:29:15,405 --> 00:29:18,365 I know; My children used to ask for Happy Meals. 506 00:29:18,408 --> 00:29:19,708 I'd hear it in the backseat. 507 00:29:19,758 --> 00:29:21,368 "Happy Meals?" 508 00:29:21,411 --> 00:29:23,151 I don't even know how they learned about them, 509 00:29:23,196 --> 00:29:24,456 but they did. 510 00:29:24,501 --> 00:29:26,941 - It was a stroke of marketing genius. 511 00:29:26,982 --> 00:29:30,812 Very often, the toys would be so sought after, 512 00:29:30,856 --> 00:29:32,946 adults would even go to get their Happy Meal, 513 00:29:32,988 --> 00:29:34,638 just to get these toys. 514 00:29:34,685 --> 00:29:38,335 And great way to keep bringing families in, 515 00:29:38,385 --> 00:29:40,905 despite the dietary craze at the time. 516 00:29:43,694 --> 00:29:45,484 - Today, Happy Meals account 517 00:29:45,522 --> 00:29:50,092 for a whopping $10 million per day in McDonald's sales, 518 00:29:50,136 --> 00:29:51,826 making the fast food giant 519 00:29:51,877 --> 00:29:54,707 the largest distributor of toys in the world. 520 00:29:55,619 --> 00:29:57,619 - Fast food owes its success to children. 521 00:29:57,665 --> 00:29:59,145 And as a result, 522 00:29:59,188 --> 00:30:01,798 children's palates were transformed by fast food. 523 00:30:01,843 --> 00:30:04,413 - The Happy Meal gives McDonald's a boost, 524 00:30:04,454 --> 00:30:05,674 but they still don't have 525 00:30:05,716 --> 00:30:07,886 a signature non-beef dish that can compete 526 00:30:07,936 --> 00:30:11,156 with Burger King's Original Chicken Sandwich, 527 00:30:11,200 --> 00:30:12,990 and Rene Arend has been working 528 00:30:13,028 --> 00:30:14,938 around the clock to create one. 529 00:30:14,987 --> 00:30:17,157 - This was a fine dining chef 530 00:30:17,206 --> 00:30:20,166 and you're throwing him into the realm of the french fry. 531 00:30:20,209 --> 00:30:26,299 And he has to take his French classic culinary training 532 00:30:26,346 --> 00:30:29,516 and find a way to make American fast food, 533 00:30:29,566 --> 00:30:32,656 and that was a major challenge. 534 00:30:38,924 --> 00:30:40,014 - What's this? 535 00:30:42,666 --> 00:30:43,886 Crispy. 536 00:30:43,929 --> 00:30:44,969 Bite-size. 537 00:30:46,061 --> 00:30:47,321 Brilliant. 538 00:30:54,896 --> 00:30:56,456 What's in that? 539 00:30:56,506 --> 00:30:57,676 Onion? 540 00:30:57,725 --> 00:30:58,935 - Yes. 541 00:31:01,860 --> 00:31:03,770 - Chef Arend had created something 542 00:31:03,818 --> 00:31:05,598 called the onion nugget, 543 00:31:05,646 --> 00:31:08,736 and they just couldn't figure out how to get it working 544 00:31:08,779 --> 00:31:10,649 and they really couldn't figure out 545 00:31:10,694 --> 00:31:12,874 a place for it on the menu. 546 00:31:21,227 --> 00:31:23,527 - Can you do this with chicken? 547 00:31:25,971 --> 00:31:29,631 - They realized that they could use this template 548 00:31:29,670 --> 00:31:32,670 and create a de-boned chicken nugget. 549 00:31:32,716 --> 00:31:35,196 Never before would you have 550 00:31:35,241 --> 00:31:37,421 a piece of fried chicken without a bone in it 551 00:31:37,460 --> 00:31:39,720 that you could consume in two bites, 552 00:31:39,767 --> 00:31:42,027 so it was revolutionary. 553 00:31:43,814 --> 00:31:45,434 - Fred Turner has a bold vision 554 00:31:45,468 --> 00:31:48,378 to create bite-size pieces of boneless chicken. 555 00:31:52,823 --> 00:31:56,443 But at the time, chicken is served in filets or on the bone, 556 00:31:56,479 --> 00:31:59,479 and the infrastructure to mass-produce any other form 557 00:31:59,526 --> 00:32:00,916 simply doesn't exist. 558 00:32:02,659 --> 00:32:04,709 - One of the reasons why there's a delay 559 00:32:04,748 --> 00:32:08,138 on serving boneless chicken in fast food restaurants 560 00:32:08,187 --> 00:32:10,147 is that de-boning chicken takes a while. 561 00:32:10,189 --> 00:32:12,669 They don't have the technology to do it quickly. 562 00:32:12,713 --> 00:32:15,283 - There's no part of the chicken called the nugget. 563 00:32:15,324 --> 00:32:16,804 There's no- 564 00:32:16,847 --> 00:32:20,287 It's not the wing, the leg, and the nugget. 565 00:32:25,334 --> 00:32:27,124 - To bring the new product to market 566 00:32:27,162 --> 00:32:28,602 as fast as possible, 567 00:32:28,642 --> 00:32:31,652 Fred Turner calls on the head of a frozen-food company 568 00:32:31,688 --> 00:32:35,128 that makes everything from meat pies to fried chicken. 569 00:32:36,432 --> 00:32:38,572 - They're already losing the chicken battle to Burger King, 570 00:32:38,608 --> 00:32:40,088 and so what they have to do 571 00:32:40,132 --> 00:32:42,832 is come up with the McNugget that will scale 572 00:32:42,873 --> 00:32:47,273 and can be served to the masses in rapid fire time. 573 00:32:48,488 --> 00:32:50,488 - You call this a chicken nugget? 574 00:32:51,230 --> 00:32:52,450 If I wanted a chicken sausage, 575 00:32:52,492 --> 00:32:54,972 I woulda sliced one up myself. 576 00:32:56,365 --> 00:32:58,055 - Can you give us a minute? 577 00:33:01,196 --> 00:33:03,016 - Where'd you find this guy? 578 00:33:08,116 --> 00:33:10,116 - Wasn't quite working with regular ground chicken, 579 00:33:10,162 --> 00:33:13,342 so they had to take the next step, constantly researching, 580 00:33:13,382 --> 00:33:16,302 constantly trying to figure out a way that it holds together 581 00:33:16,342 --> 00:33:19,172 and then, can be served quickly. 582 00:33:19,214 --> 00:33:21,834 - Turner realizes that if he's going to create 583 00:33:21,869 --> 00:33:23,519 an entirely new product, 584 00:33:26,134 --> 00:33:28,664 he'll have to build it from the ground up. 585 00:33:29,877 --> 00:33:31,137 - Pretty exciting, right? 586 00:33:32,575 --> 00:33:34,835 It's way more complicated than the Filet-O-Fish. 587 00:33:36,101 --> 00:33:37,841 - So he enlists Bud Sweeney, 588 00:33:37,885 --> 00:33:39,665 the man who successfully oversaw 589 00:33:39,713 --> 00:33:41,723 development of the Filet-O-Fish, 590 00:33:41,758 --> 00:33:45,888 to design a new system and head up a McNugget SWAT team. 591 00:33:47,764 --> 00:33:48,984 - So, that bit there, 592 00:33:49,027 --> 00:33:50,897 is that the part that de-bones the chicken 593 00:33:50,941 --> 00:33:53,071 or the one that cuts its into identical pieces? 594 00:33:57,426 --> 00:33:59,556 Even after we've figured out the process, 595 00:34:00,777 --> 00:34:02,557 we still need to modify the recipe 596 00:34:02,605 --> 00:34:03,905 so that it can handle flash-freezing 597 00:34:03,954 --> 00:34:06,784 and be refried at individual restaurants 598 00:34:06,827 --> 00:34:09,177 without losing the original flavor and texture. 599 00:34:12,615 --> 00:34:13,395 Sorry. 600 00:34:14,400 --> 00:34:15,580 I'll let you concentrate. 601 00:34:25,237 --> 00:34:28,107 - McDonald's forges the McNugget SWAT team, 602 00:34:28,153 --> 00:34:31,423 which is a collection of culinary specialists 603 00:34:31,460 --> 00:34:33,680 within the company that work to create 604 00:34:33,723 --> 00:34:36,123 the Chicken McNugget in very quick time. 605 00:34:37,162 --> 00:34:38,732 - McDonald's is working on 606 00:34:38,772 --> 00:34:41,602 a groundbreaking new weapon in their war with Burger King. 607 00:34:41,644 --> 00:34:43,264 And when it's ready, 608 00:34:43,298 --> 00:34:46,388 it'll be the most dominant fast food product ever unleashed. 609 00:34:55,093 --> 00:34:58,923 It's 1979, and McDonald's elite Chicken McNugget SWAT team 610 00:34:58,966 --> 00:35:02,096 is working to produce bite-sized pieces of boneless chicken. 611 00:35:03,492 --> 00:35:06,892 And in just five months, 612 00:35:06,930 --> 00:35:08,450 they create an assembly line 613 00:35:08,497 --> 00:35:11,067 to efficiently de-bone chicken by hand 614 00:35:11,109 --> 00:35:13,419 and re-engineer a hamburger patty machine 615 00:35:13,459 --> 00:35:15,109 to process the chicken parts. 616 00:35:16,505 --> 00:35:17,985 - They de-bone the chickens, 617 00:35:18,028 --> 00:35:20,768 but then they grind them into a chicken paste, 618 00:35:20,814 --> 00:35:23,644 and then they make that chicken paste into various shapes, 619 00:35:23,686 --> 00:35:25,776 and then they fry those shapes. 620 00:35:25,819 --> 00:35:28,999 - The chicken's 621 00:35:29,039 --> 00:35:32,739 a bell, a ball, a boot, and a bow tie, 622 00:35:32,782 --> 00:35:34,262 all still in use today. 623 00:35:35,437 --> 00:35:40,177 - And he coats it with a very appealing crust 624 00:35:40,225 --> 00:35:42,745 that gives chicken a whole new mouthfeel. 625 00:35:42,792 --> 00:35:46,672 It gives it a kind of explosion of flavor 626 00:35:46,709 --> 00:35:48,489 that ordinary chicken doesn't have. 627 00:35:52,715 --> 00:35:55,495 - To create a McNugget is an obsession 628 00:35:55,544 --> 00:35:58,594 for the team at McDonald's, and it's this obsession 629 00:35:58,634 --> 00:36:01,334 that permeates the culture of McDonald's 630 00:36:01,376 --> 00:36:03,676 from Ray Kroc on down, and that's how the SWAT team 631 00:36:03,726 --> 00:36:05,856 delivers the McNugget to the world. 632 00:36:05,902 --> 00:36:07,212 - Before McDonald's launches 633 00:36:07,252 --> 00:36:09,342 their revolutionary new chicken nugget, 634 00:36:09,384 --> 00:36:13,004 Rene Arend sees an opportunity to maximize its potential- 635 00:36:13,040 --> 00:36:14,430 - Mm-mm, out. 636 00:36:14,476 --> 00:36:16,826 - By creating a sauce to dip it in. 637 00:36:18,741 --> 00:36:20,921 - In the fast food marketplace at the time, 638 00:36:20,961 --> 00:36:23,661 dipping sauces were not something you had 639 00:36:23,703 --> 00:36:26,013 and there were really not many things you could dip. 640 00:36:26,053 --> 00:36:28,323 You could dip onion rings or french fries. 641 00:36:28,360 --> 00:36:29,840 Maybe up in Buffalo, New York, 642 00:36:29,883 --> 00:36:31,453 people putting blue cheese on wings, 643 00:36:31,493 --> 00:36:33,233 but it wasn't really that common. 644 00:36:33,278 --> 00:36:34,798 - More salt for this. 645 00:36:37,934 --> 00:36:40,684 - One thing that Rene Arend brings to McDonald's 646 00:36:40,720 --> 00:36:42,640 is that European sensibility, 647 00:36:42,678 --> 00:36:44,898 which involves a lot of sauces in cooking 648 00:36:44,941 --> 00:36:46,511 that are his specialty, 649 00:36:46,552 --> 00:36:49,212 which isn't necessarily a part of the American experience. 650 00:36:52,775 --> 00:36:54,295 - After weeks of work- 651 00:36:54,342 --> 00:36:55,742 - Mm. 652 00:36:55,778 --> 00:36:56,738 Yeah, that's good. 653 00:36:57,824 --> 00:36:59,174 - Arend narrows hundreds 654 00:36:59,217 --> 00:37:01,087 of potential sauces down to four, 655 00:37:03,264 --> 00:37:05,574 hoping one of them is good enough 656 00:37:05,614 --> 00:37:08,274 for Ray Kroc to send to market. 657 00:37:08,313 --> 00:37:10,103 - We have mustard sauce. 658 00:37:16,930 --> 00:37:18,110 Sweet and sour. 659 00:37:23,502 --> 00:37:24,372 Honey sauce. 660 00:37:32,554 --> 00:37:36,124 And last but not least, barbecue. 661 00:37:48,091 --> 00:37:48,921 - So... 662 00:37:49,919 --> 00:37:51,569 Which ones do you like? 663 00:37:54,924 --> 00:37:56,144 - All of 'em. 664 00:37:56,186 --> 00:37:57,576 I want 'em all. 665 00:38:02,280 --> 00:38:04,540 But we can't serve them like this. 666 00:38:04,586 --> 00:38:08,626 Gotta be dippable, like fries and ketchup on the go. 667 00:38:10,026 --> 00:38:13,326 - It comes down to the function of how you eat that chicken. 668 00:38:13,378 --> 00:38:15,078 You can't eat that chicken with a fork. 669 00:38:15,118 --> 00:38:16,948 You have to eat it with your hands. 670 00:38:19,688 --> 00:38:22,778 - We could make disposable dipping cups 671 00:38:22,822 --> 00:38:24,652 prefilled with sauces. 672 00:38:24,693 --> 00:38:25,913 - Perfect. 673 00:38:25,955 --> 00:38:26,775 Love it. 674 00:38:28,088 --> 00:38:29,218 - In 1980, 675 00:38:29,263 --> 00:38:31,743 after years of grueling experimentation, 676 00:38:31,787 --> 00:38:35,177 McDonald's finally launches the Chicken McNugget. 677 00:38:38,881 --> 00:38:40,361 - There are few ways to overstate 678 00:38:40,405 --> 00:38:42,405 how wildly successful the McNuggets were. 679 00:38:42,450 --> 00:38:44,320 Local newscasts were filming 680 00:38:44,365 --> 00:38:46,185 outside of McDonald's across the country, 681 00:38:46,236 --> 00:38:50,066 showing lines of people waiting to try the McNugget, 682 00:38:50,110 --> 00:38:52,500 being upset when they ran out of stock. 683 00:38:52,547 --> 00:38:56,807 - It was small, portable, crunchy fried chicken. 684 00:38:56,856 --> 00:39:00,336 You had it on the go and it was fun. 685 00:39:00,381 --> 00:39:03,211 The word McNugget is fun to say. 686 00:39:03,253 --> 00:39:04,733 It was really unlike 687 00:39:04,777 --> 00:39:07,037 anything you were getting anywhere else. 688 00:39:08,737 --> 00:39:09,867 - Within months, 689 00:39:09,912 --> 00:39:12,652 the McNugget makes up 20% of sales, 690 00:39:12,698 --> 00:39:14,048 making it the most successful 691 00:39:14,090 --> 00:39:16,530 McDonald's menu item ever launched, 692 00:39:18,007 --> 00:39:21,357 ushering in a completely new way to consume chicken. 693 00:39:24,274 --> 00:39:25,974 - I think the most brilliant thing 694 00:39:26,015 --> 00:39:28,365 about the chicken nugget is the dipping sauce, 695 00:39:29,454 --> 00:39:30,544 because what that does 696 00:39:30,585 --> 00:39:33,675 is allows you to change it all the time. 697 00:39:33,719 --> 00:39:35,979 - Think about the chicken nugget 698 00:39:36,025 --> 00:39:39,375 and the container in which you dip it and how that container 699 00:39:39,420 --> 00:39:42,820 is perfectly sized to the chicken nugget. 700 00:39:42,858 --> 00:39:44,118 I mean, that's science. 701 00:39:44,164 --> 00:39:46,434 That's somebody using their brain for good. 702 00:39:46,471 --> 00:39:49,911 - That's now a part of every kids menu 703 00:39:49,952 --> 00:39:52,002 in every restaurant across the world, 704 00:39:52,041 --> 00:39:55,831 and that all stems from the creation of the McNugget, 705 00:39:55,871 --> 00:39:59,181 which is not a technical part of a chicken, 706 00:39:59,222 --> 00:40:01,882 but was a core idea that McDonald's developed 707 00:40:01,921 --> 00:40:03,361 into becoming something 708 00:40:03,401 --> 00:40:06,061 that we make synonymous with chicken now. 709 00:40:06,099 --> 00:40:07,929 Yet again, McDonald's and Ray Kroc 710 00:40:07,970 --> 00:40:10,580 are at the forefront of a huge shift in American diets. 711 00:40:11,626 --> 00:40:13,496 - Ray Kroc is, once again, 712 00:40:13,541 --> 00:40:15,941 the undisputed king of fast food. 713 00:40:21,331 --> 00:40:26,291 And 1,200 miles away, all Don Smith can do is watch. 714 00:40:26,336 --> 00:40:30,206 - Burger King often struggled to keep up with McDonald's 715 00:40:30,253 --> 00:40:33,173 and was always at the heels of McDonald's, 716 00:40:33,213 --> 00:40:36,523 trying to compete where McDonald's was excelling. 717 00:40:36,564 --> 00:40:38,314 - Under his brilliant leadership, 718 00:40:38,348 --> 00:40:40,608 Burger King has firmly established themselves 719 00:40:40,655 --> 00:40:43,265 as the second-largest fast food chain, 720 00:40:43,310 --> 00:40:46,310 but simply can't catch up with McDonald's. 721 00:40:46,356 --> 00:40:47,966 - What Don Smith was able to do 722 00:40:48,010 --> 00:40:50,970 was to bring some of Ray Kroc's ingenuity 723 00:40:51,013 --> 00:40:52,283 and the spirit of McDonald's 724 00:40:52,319 --> 00:40:53,969 into Burger King when it needed it the most. 725 00:40:54,016 --> 00:40:57,056 You can't have Burger King without Don Smith. 726 00:40:57,106 --> 00:40:59,626 - This rebirth of this great brand, 727 00:40:59,674 --> 00:41:01,154 the only brand that could really compete 728 00:41:01,197 --> 00:41:04,367 with McDonald's supremacy, and he really did it 729 00:41:04,418 --> 00:41:07,598 by kind of beating McDonald's at their own game. 730 00:41:11,817 --> 00:41:14,987 - In 1980, Don Smith is poached by PepsiCo, 731 00:41:17,692 --> 00:41:19,352 where he's tasked to oversee 732 00:41:19,389 --> 00:41:21,999 two of their newest 733 00:41:23,437 --> 00:41:25,347 Pizza Hut and Taco Bell. 734 00:41:33,491 --> 00:41:35,491 The bold innovation of the Chicken McNugget 735 00:41:35,536 --> 00:41:38,146 soon inspires mega-hit menu items 736 00:41:38,191 --> 00:41:41,371 like the McRib and the McChicken Sandwich, 737 00:41:41,411 --> 00:41:44,851 cementing McDonald's place as industry leaders. 738 00:41:48,244 --> 00:41:51,204 Today, McDonald's has over 37,000 restaurants 739 00:41:51,247 --> 00:41:53,507 in 120 countries, 740 00:41:54,860 --> 00:41:56,210 an influence so massive 741 00:41:56,252 --> 00:41:59,172 it affects the prices of commodities worldwide. 742 00:42:03,564 --> 00:42:05,394 - In order for McDonald's to stock up 743 00:42:05,435 --> 00:42:06,565 all of its restaurants, 744 00:42:06,611 --> 00:42:09,351 it has to make massive orders in beef, 745 00:42:09,396 --> 00:42:12,306 in chicken, in fish, and in potatoes. 746 00:42:12,355 --> 00:42:14,785 McDonald's growth has transformed 747 00:42:14,836 --> 00:42:17,186 the agricultural landscape in this country. 748 00:42:18,710 --> 00:42:21,410 - Burger King is an icon in its own right, 749 00:42:21,451 --> 00:42:24,541 with 18,000 locations spread across the globe, 750 00:42:24,585 --> 00:42:26,365 and they generate $10 billion 751 00:42:26,413 --> 00:42:29,553 in annual sales in the United States alone. 752 00:42:31,287 --> 00:42:34,597 - Having that kinda competition from Burger King 753 00:42:34,639 --> 00:42:37,509 is what forces McDonald's to innovate 754 00:42:37,555 --> 00:42:39,595 and forces them to create new things 755 00:42:39,644 --> 00:42:42,084 that without the competition of someone like Burger King, 756 00:42:42,124 --> 00:42:43,654 McDonald's might not have 757 00:42:43,691 --> 00:42:46,391 the menu variety that it does today. 55455

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