McDonald's Eyeing Natural Chicken

McDonald's to curb use of antibiotics in its U.S. chicken.
5:54 | 03/05/15

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Transcript for McDonald's Eyeing Natural Chicken
Okay. It's Thursday march 5 the markets in Europe are open debate over this morning 400 million. As it 400 million pounds up shipped yet which is the amount McDonald's has that it bought last year. The covers over the next two years though it will stop using check in treated with antibiotics commonly used by humans. Now McDonald's which is one of the biggest buyers of chickens and eggs in the United States is making it bold statement with this move one that will no doubt have ripple effects throughout the entire industry. But when I'm Dan Butler in New York written with Yahoo! finds joining us on this snowy Wednesday Thursday morning excuse me. Rick this is a big deal what McDonald's doing this now. McDonald's needs to update its image that's the first part of it. You know McDonald's basically cut has the image of a company that sells 1950s. Era factory dude. Compared to places like to Poe led a Panera Bread all these outlook to become real shake shack is not a one Ali skeleton to become really successful. Emphasizing fresh foods sometimes locally sourced. In just a higher attention to quality McDonald's has really been struggling against that. And also. This is Connie keeping up a trends I'm not a medical expert here Dan but scientists say that. There's so much antibiotics being fed to livestock that this is one of the reasons we're seeing the development of bugs that are resistant to antibiotics. So I think McDonald is trying to get you can you can be you can be very sure that this was a very careful decision because. McDonald's uses so much chicken they have massive supply. A pet supply change to get that food and then there was a lot that had to go into this working with suppliers. But this is a gradual step in what McDonald's thinks is the right direction for transforming the company and updating its image. Transfer over the public housing and transform the industry because like you pointed out there and when there are major player like this when they decide to make a move. And clear that there working with ties in the regular suppliers as well as you pointed out there. Yeah it's still I mean if you're looking at likes smaller operations I mean and they just got to follow suit whether they want to or not. Depth probably. Or they may just you know what are McDonald's could end up doing here shifting the cost basis for certain types of chicken. Products so that if suddenly you know the demand is huge source of demand is now for a different type of chicken. Well that's that's going to put could end up being the cheaper type a product to get so. So I think you'll probably see other purchasers who don't have the half McDonald's has. Going over and buying what McDonald's buys because that's what's available. You're talking about updating the entire company new CEO Steve Esther Brooks in place now. I mean does this kind of and it gives sort of a signal about just how serious he is about changing that though the monitor the image though overall. Appeal of McDonald's. Sure I mean it's. It is it's it's not just us symbolic I mean it's an actual change now you have to ask yourself. How much are McDonald's customers gonna care or with Willis is this a move alone is as a kind of thing that would. Drive somebody into McDonald's who wouldn't otherwise. By through their I kind of doubt it I think. McDonald's is a lot more to do they eat you know they're stuck in a tough spot because. Their main value proposition eight if you will say you can get a tasty meal but cheap. So once you start adding fresher ingredients or higher quality ingredients you're messing with the cheap part of that equation. That's you know that's what McDonald's does this is a witness so they have a long way to go but this is a very Smart company. They they have been the best at what they do for a long time they're stumbling now. What we're probably gonna see is a lot of other smaller moves like this. But back at it somehow has to coalesce. Into something news that says look mcdonalds is trendy. It's that quality is up and it's kind of a cool place to eat nonstick not just a place for cheap food. Yet what it's because it's gotta go up guts places like you put it out to pull lace Starbucks as well. Which is hugely popular with Milan meals that are of lead. For had perhaps more in tune with what they're putting into their bodies and maybe some other generations Miami as well. This I mean is something like this and is second in the enough you know to to kind of a change that mindset. No and you know you mention just a couple of changed me we've seen this explosion of gourmet burger chain's. Oh mommy burger net. In other places like that manes and these are big change that are starting out very small but they're growing. They're becoming sort of regionally powerful and when you put them all together that's really the challenge to mcdonalds so McDonald's has a long way to go. And you know I guess the good news for McDonald's is. Peak murderer. For America is nowhere in sight and we keep happening we keep batting burger chain's Americans keep eating more burgers so for everything we know about health trends. Americans love burgers and have you know the event McDonald's just needs to get back to the front of people's consciousness when they think about birders speaking. Of burgers McDonald's they said anything if they're looking at making antibiotic beef is part of their bid Carolina as well. I don't know if they've said anything about it but you have to assume that that's something I'm looking at I would assume they're looking at probably dozens of things. And saying you know what can we do. That. Fulfills our our you know our need to keep costs down. Which means he's need to be careful moves where you've got all your suppliers on board vs things it would like to do but it's going to be too disruptive. It's gonna push costs up and yet you just have to remember. McDonald's customers are very price sensitive I mean you know stop something goes up by a dime. Or you know you you go you've yet to cross that threshold where it goes from 19 209. Our 99 cents to a dollar nine you know that actually drives some customers away so they they have to be really nimble here. There aren't written or for Yahoo! finance Rick thanks so much a candidates or independents here. You can keep up let us electorate here and you know much in the big number I'm Dan Kessler York.

This transcript has been automatically generated and may not be 100% accurate.

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