This is a summary of the different sections of my paper, I am i the process of expanding them all and focusing my essay more carefully. I am more than open to any and all feedback.
The market for non-luxury restaurant food has dramatically evolved since 1950. On the supply side: the firms are much larger and less localized, they are franchises of large corporations instead of small-businesses. On the demand side: taste and preference have changed and the consumers are dramatically more overweight. Over the past 50 years fast food industry has reaped financial success as the American consumers ruin their health. As the negative externalities of the fast food industry become more and more apparent, the government and other organizations have responded by creating more regulations on the industry and promoting healthier eating among the consumers. This paper will review how fast food took over and the affect on consumers. Then analyze the effects of efforts to curb the negative externalities. McDonalds is focus of much of the paper because it is much a significant industry leader. The goal of this paper is to answer whether or not the fast good industry can continue to thrive in a world increasingly affected and concerned by obesity.
The origins of the massive fast food corporations are in small business. McDonald’s began in 1940 as Dick and Mac McDonald opened “McDonalds Bar-B-Q”, in California. Within eight years the McDonald’s found its niche and focused on a limited hamburger-focused menu. Other restaurants followed McDonald’s lead and they formed a Stackleberg Oligopoly, with McDonalds as the dominant firm.
The standard for healthy eating is the USDA food pyramid. Guidelines for healthy eating began with Wilbur Olin Atwater, who wrote the first guideline for healthy eating in 1902. He was an agricultural chemist, and he highlighted proportions moderation and was an innovator in studying calories the amount of energy in different foods. In 1917 the USDA published the first official food guide. It was called “How to Select foods,” and contained 5 basic food groups 1. Milk and Meat 2.Cereals 3. Vegetables and Fruit 4. Fats and fatty food 5. Sugars and sugary food. Next came the food pyramid, which was much easier to read. The documentary “Super Size Me” called out McDonalds and gave physical evidence of how fast food destroys the body.
Much of the developed world has created universal health systems. These systems give free or discounted health care to all citizens, with the costs covered by the government. The effectiveness of these systems is often questioned and has become a heated political argument in the United States. Regardless, with the re-election of Barak Obama the United States will most likely adopt a universal system in the near future. An inherit externality of such as system, is that individual personal health becomes a public concern.
Obesity is a global concern, with over 1 billion people over weight and over 300 million people who are clinically obese. The numbers are even more appalling when looking at the United States. From 1950 to 1980 the average weight of an 18 year old man in America has increased 6 kilograms. It is no coincidence that this significant increase in average weight correlates with the rise of the fast food industry.
McDonalds has worked hard to adapt and is currently succeeding in today’s market. The company invested in public relations help, and has taken steps to rebrand and move away from its unhealthy image. From 2008 to 2011 the average McDonalds increased sales by around 13 percent, and the company continuous to out perform growth predictions. They changed their advertising strategy, renovated the design of their restaurants, changed the menu and most importantly they striving to meet the customers demand for a more nutritious and less fatty meal.
It is apparent that the convenience and cheap prices that fast food provides make consumer demand very inelastic. However, the industry still must evolve to meet the taste and preferences of its customers. Companies like McDonalds have found a new model that is able to combat current health concerns.