Despite the wonderful athletic performances at the Olympics – including Canada’s many medals – the big winner in Rio was certainly the International Olympic Committee (IOC), through its mega sponsorship deals.
Over the years, well-known companies such as Coke and Kellogg’s have poured millions into the IOC.
But the biggest name in food at the Olympics, year after year, is arguably McDonald’s Restaurants. The fast-food giant’s relationship with the Olympic movement goes back more than 40 years, beginning with the 1976 Summer Olympics in Montreal. Its current deal ends after the 2020 Tokyo Summer Olympics. The deal is apparently worth more than $50 million per Olympics – and that’s just for the right to use the famous Olympic symbol on its products.
The McDonald’s-IOC association has been lucrative for both parties.
McDonald’s is the world’s largest toy distributor, through the millions of Happy Meals it sells every year. Since 1979 in Canada, stencils, 3D glasses, Frisbees, balls, posters, mini gardening tools and video games have been given away with Happy Meals. Most toys are associated with a movie or TV show, and are part of a collection. That draws parents and children back to collect the entire set.
Over the years, the toys have become more sophisticated.
This year, in the spirit of the games, McDonald’s wanted to encourage kids to be active. So it arranged to give away Step-iT, a step counter made for children. The watch-like device was meant to allow kids to monitor their daily activities. However, children developed skin abrasions from wearing the counters and McDonald’s had to issue a recall.
The interesting idea to encourage children to get into shape completely backfired for McDonald’s.
The situation highlights the questionable morality of giving away toys to sell Happy Meals. It’s not really advertising directly to children, which is forbidden in many places, including Quebec. But McDonald’s focus on distributing toys, along with marketing food of questionable nutritional value, has made many uncomfortable for years.
Happy Meal represents about 20 per cent of McDonald’s sales – more than 1.5 billion Happy Meals are sold worldwide every year. So continuing to give away toys is important to the company’s bottom line. A few years ago, the City of San Francisco tried to ban toy giveaways. McDonald’s outsmarted city council by selling the toys for a dime each.
But a look to social licensing suggests those days are numbered.
Social licensing is an organization’s ability to operate with the confidence of stakeholders that its activities are morally and socially legitimate. Supply chain transparency, operational gender equality and environmental stewardship all fit in a description of social licensing.
It’s surprising, then, that Happy Meals haven’t garnered much more attention in recent years. Somehow, McDonald’s has maintained a social licence to distribute the toys.
That may soon change.
Chile, attempting to address childhood obesity, has forbidden McDonald’s from giving away toys with Happy Meals. In some countries, McDonald’s gives books with Happy Meals rather than toys. Digital books are also available.
Striking a balance between pleasing responsible parents and entertaining children is difficult, but not impossible. And let’s face it, most McDonald’s toys capture a child’s imagination for only a few hours, if that. Some don’t even make it to the car (the waste is another issue, then).
The moral contract between consumers and the food industry is constantly revisited. What was acceptable just a few years ago may not be anymore. It’s easy to bet that the days of associating toys with fast food are numbered.
As a responsible company, McDonald’s has made some interesting adjustments in recent years, but problems remain. Giveaways on the surface aren’t a bad idea. Who doesn’t like gifts?
McDonald’s obviously used its latest Happy Meals giveaway as an attempt to improve society through childhood fitness, piggybacking on its Olympic relationship.
Its failure is a sign that society’s standards are on the rise. Now McDonald’s must match that social evolution.