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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,
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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.
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00:03:14,368 --> 00:03:17,068
- It has to be a set
leader with a set goal,
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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,
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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.
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00:03:26,075 --> 00:03:27,685
Just 20 years before,
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00:03:28,991 --> 00:03:31,561
there were less than a few
thousand fast food restaurants.
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00:03:31,602 --> 00:03:35,482
But by the mid-1970s,
there are nearly 60,000,
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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
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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.
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00:03:51,970 --> 00:03:53,450
- Five
years after releasing
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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
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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.
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00:04:17,344 --> 00:04:21,224
- In California,
franchise owner Herb Peterson
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00:04:21,261 --> 00:04:23,611
pitches Kroc an item
unlike anything else
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00:04:23,654 --> 00:04:25,274
on McDonald's menu.
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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,
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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
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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
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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.
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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.
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00:06:22,773 --> 00:06:24,253
- In 1976,
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00:06:24,296 --> 00:06:28,336
McDonald's launches the
Egg McMuffin nationwide.
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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,
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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
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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
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00:07:22,616 --> 00:07:25,746
eaten outside the home is
at a fast food restaurant.
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00:07:28,709 --> 00:07:31,319
By dominating all
three meals of the day,
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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
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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.
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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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