The French Way (29 page)

An important element of the “made in France” campaign, which was led by the CEO of McDonald's-France, Denis Hennequin, after 1996, was the modifications made in menus and restaurants. Management admitted that the initial strategy emphasizing “external visibility”—that is, the standard Golden Arches look and ambiance of red and yellow plastic, fluorescent lighting, and white tiles, was outmoded: now the accent was on the quality of each restaurant's interior and the harmony of its exterior with its surroundings.
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Refurbishing outlets that appeared shabby and dated became a priority.
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On the Champs-Elysees the unit received new soft lighting and brick interior walls, while other branches were made more comfortable and more upmarket with fireplaces and leather furniture. For afternoon tea in the Galeries Lafayette, McCafe used porcelain tea services. Some Alpine restaurants were redecorated with wood and stone interiors, giving them the aura of chalets. And, as if to prove the circulation of culture, the classier look of French sites inspired the redesign of some American franchises, like the theater-style outlet in New York's Times Square. Not only was the decor improved but the menu became more varied, offering a version of a Croque Monsieur called a “Croque McDo,” Danone yogurts, premium salads, and Carte Noire coffee as well as dainty macarons served at the McCafe-and, to the dismay of Coca-Cola, one would imagine, customers could now order Orangina.
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The restaurants also served healthier dishes like a variety of salads and they be
came “transparent,” meaning customers could consult a detailed guide specifying nutritional content such as calories, fats, and sugar for all of the food served. By clicking on
poulet
at the website one could find detailed information about the birds used for Chicken McNuggets, such as their age and feed.
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Hennequin fought back in other ways against the company's image as a globalized, computerized, tacky, supplier of la malbouffe. He retaliated with a booklet disputing the charges made by its critics and elaborating the company's contributions to employment, food hygiene, customer service, and philanthropy, as well as diversity.
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McDonald's-France, to the chagrin of the home office in Illinois, even ran an “advertorial” about childhood obesity in a woman's magazine recommending a “slow down” in the consumption of junk food, stating there was “no reason to go more than once a week to McDonald's.”
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As the capstone to this remaking of McDonald's post-Bove image, the company retired Ronald McDonald and replaced him with Asterix as its icon.
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The irony was obvious: Jose Bove, who with his grand moustache and sturdy stature resembled the comic-strip Gaul, had appropriated Asterix as his symbol of resistance to McDonald's. And now McDonald's had appropriated Asterix and, by extension, Bove.

One should not exaggerate the localization of product or the much touted autonomy of franchises. McDonald's, like Disney and Coca-Cola, was notorious for running a “tight ship” and monitoring standards. McDonald's claim that its outlets were operated by local retailers seems dubious since the company trained its top managers at Hamburger University in Illinois, provided suppliers, picked sites, and rigorously enforced its highly detailed operating procedures—specifying the placement of hamburgers on the grill and the dimensions of the french fry (9/32 of an inch thick). In fact, most of the outlets in Paris (as opposed to France) were owned and operated by the Chicago firm rather than by French franchisees. Parading one's local credentials was an important tactic, but in the end the essence of McDonald's appeal did not change. As Hennequin explained, the French liked McDonald's
because it was fast, convenient, affordable, and child-friendly, unlike traditional restaurants, and because the French were “fascinated with America.”
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This fascination made France the most profitable market in Europe—second only to that of the United States. And Hennequin's success in France made him CEO for Europe in 2004 where he replicated his strategy of remodeling restaurants and introducing healthier, more local, and more “transparent” menus.
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The incident at Millau did not interrupt McDonald's march to dominate the fast food industry. It opened its 1,000th outlet in 2003; its nearest competitor, France Quick, had only 316 units. The Golden Arches could be seen in more than 700 French cities and towns. France had more franchises per capita than its neighbors, including Germany, Italy, Spain and the Netherlands—but not the United Kingdom.
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Twenty years after it had relaunched its expansion in France it had transformed fast food in the sense of how food was supplied, prepared, and sold; what was consumed; and who was employed. It had pushed aside some rivals and changed how others did business. McDonald's had also adapted to its setting while retaining its identity. But the Golden Arches had not transformed how the French ate or thought about food. The U.S.-based chain did not control fast food, much less the traditional sector of the restaurant business or home preparation. McDonald's still had to compete with other burger chains, as well as cafes, trendy sandwich shops, theme restaurants, grills, viennoiseries, gas stations on the highways, and home delivery of pizza—and, increasingly, with simple takeout service from the neighborhood
boulangerie
or
charcuterie.
In 1997 the French spent $30 billion eating out, $24 billion of it in independent restaurants; of the remainder only $1.9 billion went to American-style fast food places like McDonald's, and the rest was scattered among viennoiseries, takeout, and the like.
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McDonald's found its niche within the larger world of restaurants. At the same time its own menu had become far more varied than one of just hamburgers and fries.

The coming of McDonald's added variety to a palate that was becoming more cosmopolitan and global.
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The range of food available
in markets and restaurants was wider than ever before. Within the food industry itself, restaurateurs and “fast fooders” acted more like colleagues than rivals because they were serving different clienteles—even if they might quarrel over issues like the tax on restaurants. There were entrepreneurs who owned and operated both classic restaurants and fast food outlets.
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And some of the finest French chefs admitted that their own children patronized McDonald's.
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As one commentator noted, “Between the Chinese restaurants and the great chefs, between the shelves of his supermarket and the regional specialties brought home from vacation, the French consumer has never had more varied nutrition. He can, from time to time, spend his evening at the corner McDonald's without feeling guilty. His culture will survive.”
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Coca-Cola

Of the three protagonists in this story Coca-Cola has the longest history in France; it made its debut in the era of the First World War. Then, in 1949-50, it crossed the Atlantic in force, expecting an easy entry into an allied country but running into fierce resistance. This episode has been analyzed in depth elsewhere and need only be sketched here.
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Atlanta's marketing strategy for France, which featured an advertising blitz, heightened suspicions of a brash American takeover. The company inadvertently created a veritable anti-Coca-Cola coalition that featured the Communist Party, left-wing intellectuals, and much of the beverage industry, like fruit juice and wine interests. If this were not sufficient trouble, several government agencies including the Ministry of Finance joined the attack. Objections to the soft drink ranged from concern about national health, the corruption of taste, and a loss of scarce dollars, to fear of “Coca-colonization”—a new term for American imperialism. Coca-Cola was forced to wage a long, hard battle to overcome opponents who brought law suits and even managed to persuade the National Assembly to pass legislation
that, if enforced, would have banned the drink on the grounds that it was injurious to public health.

The company had misjudged how the ideological struggles of the Cold War, French insecurity, and the dominating presence of the United States in the postwar era might affect the arrival of its soft drink. And it ignored the Gallic habit of magnifying the cultural meaning of American products.
Le Monde
, for example, asserted that what was at stake with Coca-Cola, and other recent American imports like the
Reader's Digest
, was “the moral landscape of France.”
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Some said the national beverage was the essence of national identity and that if Coke replaced wine France itself was at risk. In the end the Coca-Cola Company had to rely on its contacts in high places, including the U.S. State Department; its deep pockets and legal skills; and French vulnerability—that is, its need for economic aid—to overcome the opposition. By the early 1950s litigation subsided, the government surrendered, and the French could slake their thirst with the sweet import from the United States.

But this was only the beginning of Coke's adventures. It licensed most of its bottling and distribution to the subsidiary of a prominent French beverage firm, Pernod-Ricard. In the long run this proved to be a poor business decision. Pernod-Ricard's performance was listless, and French per-capita consumption lagged far behind what Atlanta expected.

Woven into the narrative of Coca-Cola in France was an orange-colored rival. Orangina, born during the 1930s in Algeria, crossed the Mediterranean in the early 1950s just as the American multinational was crossing the Atlantic. Family-owned and diminutive in scale, the Compagnie Française des Produits Orangina offered a lightly carbonated drink flavored with citrus juice and pulp. In some ways it mimicked the American import: Orangina also featured a distinctive bottle, a textured bulb shape rather than the classic Coke ribbed “hobble-skirt”; high-profile advertising; its own color scheme (orange rather than red); and a catchy motto, “Secouez-moi” (“Shake me,” in
order to mix the pulp). It promoted itself as a healthy alternative to Coke—given the rumors about Coca-Cola's secret and possibly harmful additives—and it capitalized on being homegrown given its origins in a French department of Algeria. Orangina found a niche within the carbonated drink market and in time occupied second place, although a distant second, to the American cola giant.

Our tale, however, begins in the 1980s rather than the 1950s. It was then, under the direction of CEO Roberto Goizueta, that the Coca-Cola Company decided to relaunch Coke in Europe, and in France in particular.
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Since the home market was almost saturated, Goizueta reasoned the greatest potential for growth lay outside the United States. The European Community beckoned because the adoption of the Single European Act meant that Europe would, by removing trade barriers, create enormous opportunities for investment. France could serve as a production and supply center for all of Europe. Boosting global sales, however, required restructuring—above all, regaining control of concessionaires like bottlers who resisted expansion. The French situation was especially troublesome. Ever since 1949 Pernod-Ricard had been the primary bottler and distributor of Coca-Cola, but managers at the home office in Atlanta came to believe they were being short-changed, that the French firm was reluctant to invest, and that it promoted its own soft drinks like Orangina, which it had acquired, over Coca-Cola. What also piqued the Americans was the fact that the French were such slack consumers. On the basis of per-capita consumption, the British and Italians drank twice as many eight-ounce servings of Coke per year as the French; the Belgians, Spanish, and Germans three times as much. Of course, none of the Europeans drank as much the Americans. France had been a tough market for Coke for forty years.
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Goizueta picked the hard-charging Douglas Ivester to take European operations in hand. Ivester used a bare knuckles approach to business. He took aim at Pernod-Ricard, whose subsidiary, the Societe Parisienne de Boissons Gazeuses (SPBG), acted as bottler not only for the
Paris area but also for the regions served by the Lille, Lyons, Marseilles, Nancy, and Rennes bottling facilities. When Pernod-Ricard balked at selling out, Ivester outflanked it by buying other regional bottlers like the one in Bordeaux and then filed a law suit in 1988 to terminate its contract. After eighteen months of bitter litigation Pernod-Ricard relented and Coca-Cola Beverages, a new company, replaced SPBG, gaining control of 80 percent of the production and distribution of Coca-Cola products in France by the U.S.-based company.
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Ousting Pernod-Ricard in 1989 was only the beginning of overhauling the French market. In 1990 Ivester called on William Hoffman, the Atlanta bottler who had no familiarity with either France or Europe but was notorious for his aggressive tactics. He would sell Coke the way it was done in the United States: via huge promotional displays in supermarkets, deals with food retailers that assured prime shelf space for Coca-Cola products, unorthodox advertising including racy ads, and partnerships with most everyone from oil companies to Club Med. Hoffman stunned the locals by presenting them with “Georgia Week,” featuring American football, screenings of
Gone with the Wind
, and grits.
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But what proved most offensive was selling Coke through vending machines, including one placed at the base of the Eiffel Tower. The introduction of curbside vending machines in Bordeaux, sometimes just outside local cafes, spelled trouble. When customers began buying their Cokes more cheaply from the machines, cafe owners balked and staged a three-month boycott, forcing Hoffman to remove the offending machines. An official of the cafe owners' association said, “In France we are not used to this sort of very forward and impersonal type of distribution, and we were a bit shocked by it.”
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After only eighteen months Hoffman was recalled to Atlanta, but not before he had spurred sales increasing annual per-capita consumption from thirty-nine to forty-nine small (eight-ounce) bottles.
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Atlanta officials admitted Hoffman's tactics had been provocative. The company also realigned its theme park alliances at this point. It terminated its contract with Parc Asterix in 1992 and shifted its loyalty to the new Disney park at Marne-la-Vallee.