In a recent photo illustration, a McDonald’s Quarter Pounder hamburger meal was captured at a McDonald’s location on October 23, 2024, in the Flatbush neighborhood of Brooklyn, New York City. As McDonald’s and health authorities work to manage a deadly E. coli outbreak, the company is confronted with significant challenges in maintaining the confidence of both diners and investors in the upcoming months. Since the Centers for Disease Control and Prevention (CDC) issued an advisory notice linking their Quarter Pounder burgers to an E. coli outbreak in 10 states, resulting in one fatality, McDonald’s shares have experienced a 5% decline.
Health investigators have identified slivered onions used in the Quarter Pounder as the likely source of contamination. McDonald’s confirmed removing California-based Taylor Farms as their onion supplier from their supply chain after the producer recalled four raw onion products due to potential E. coli contamination. However, U.S. Foods, a restaurant supplier, clarified that it is not a provider to McDonald’s.
As of Tuesday, 49 individuals have fallen ill from the outbreak, with cases reported between September 27 and October 11. Health experts suggest the number of cases may continue to grow as the investigation unfolds. The potential effects on McDonald’s business, particularly if case numbers increase, remain uncertain. Concerns among investors include potential sales declines as the company attempts to recover from previous traffic downturns by appealing to price-sensitive customers.
McDonald’s representatives stated on Wednesday that it is premature to assess the outbreak’s impact on their sales. The company is scheduled to announce its third-quarter results on October 29. The extent of the outbreak’s damage will depend on how effectively McDonald’s has contained it and its ability to reassure consumers of the safety of dining at its establishments.
Investigations into multistate foodborne outbreaks can take from a few weeks to several months. Dr. Thomas Jaenisch, an epidemiology professor at the Colorado School of Public Health, anticipates that it will likely take two to three weeks for federal agencies and McDonald’s to determine the exact source of contamination and the events leading to the E. coli outbreak. The CDC suggests that many cases may go unreported as individuals recover without seeking medical care, typically requiring three to four weeks to confirm involvement in an outbreak.
Professor Xiang Yang of the University of California, Davis, warns of the possibility of cases emerging in states or regions not yet affected. For instance, someone traveling to a state like Colorado, impacted by the outbreak, could become infected and transport the bacteria elsewhere. It remains unclear whether the onion supplier provides ingredients to other U.S. regions that could potentially spread the E. coli strain responsible for the McDonald’s outbreak.
The E. coli strain, known as O157:H7, can lead to serious complications, including kidney failure. The federal government prohibits the sale of ground beef contaminated with this strain, requiring suppliers to conduct testing.
The CDC and affected states are conducting interviews with each patient to gather detailed information about their exposure to E. coli, including their dietary habits and timelines. The CDC and states share their findings with the Food and Drug Administration (FDA) to trace onion distribution and identify the contamination source. The U.S. Department of Agriculture’s Food Safety and Inspection Service also shares this information concerning ground beef.
The investigation is focused on both the Quarter Pounder’s uncooked slivered onions and beef patties as potential culprits. Craig Hedberg, co-director of the Minnesota Integrated Food Safety Center of Excellence, notes the plausibility of raw onion contamination, citing similar past incidents. McDonald’s employs a single onion supplier to wash and slice the vegetable in the affected regions.
Despite using multiple beef suppliers in these areas and cooking their burgers to an internal temperature that should eliminate bacteria, the size of the outbreak implies widespread undercooking across various McDonald’s locations. This scenario seems unlikely since most fast-food chains have robust cooking systems to prevent E. coli contamination in ground beef, a known hazard. Nonetheless, investigators will likely examine cooking practices at several locations.
Dr. Jaenisch emphasizes the need to scrutinize the preparation process of Quarter Pounders for potential cross-contamination between onions and other ingredients.
McDonald’s has already withdrawn Quarter Pounders from restaurants in impacted areas, with around a fifth of its U.S. locations ceasing sales of the product. Additionally, they have instructed restaurants to remove slivered onions from supply and halted distribution in the region.
Historical cases of foodborne illness outbreaks at other restaurant chains suggest that McDonald’s brand image and sales might not necessarily suffer. Wendy’s, for example, experienced a similar link to an E. coli outbreak two years ago but did not face long-term effects on its sales.
In contrast, Jack in the Box suffered significant brand and financial impacts following a severe outbreak in the early 1990s, while Chipotle struggled for years to restore its reputation after successive incidents of foodborne illnesses.
Concerns about a potential downturn in McDonald’s sales persist; however, the company may not face the same fate as Chipotle or Jack in the Box. McDonald’s status as a sophisticated organization with a complex supply chain instills confidence in its capability to contain the outbreak.
To reassure customers about food safety, McDonald’s has outlined its response steps in a statement and released a video featuring Joe Erlinger, President of McDonald’s USA. Erlinger has appeared on NBC’s “TODAY,” asserting that the company’s products remain safe to consume.
Experts suggest that McDonald’s should offer a public apology and address its messaging to both consumers and shareholders, though this approach could increase media scrutiny. Some experts advocate for heightened sanitation and ingredient testing across all locations to mitigate further outbreak risks.
In response, McDonald’s has started facing lawsuits linked to the outbreak, with plaintiffs alleging E. coli infection after dining at McDonald’s locations. Although lawsuits may attract additional attention, they are unlikely to threaten the chain’s long-term viability.
The outbreak emerges amid McDonald’s efforts to attract diners deterred by years of price hikes, amid an industry-wide decline in restaurant traffic. McDonald’s had been promoting a $5 value meal since June and recently launched the higher-priced Chicken Big Mac, attracting customer interest before the outbreak.
With McDonald’s, Burger King, and Wendy’s dominating approximately 70% of the burger quick-service restaurant market, any dips in McDonald’s sales could present opportunities for its competitors.
