Circular Hotdogs: A Fable

From time to time I’ll try to document the story about the round hotdog, just because I’d like to teach people about it; it’s such an appealingly goofy idea that it seems like there should be a lesson about it in business school. Unfortunately, there’s very little to be had, either from library or Internet sources; I only know the story because many years ago I had the privilege to meet and talk with one of the company’s R&D people, and he swore that this was true. I’m going to recount it for you here, because even if this tale isn’t altogether true, it still contains a valuable lesson…

Unless you’ve read Ray Kroc’s autobiography (I can’t really recommend that you do; it’s difficult reading in places), you may not know that Kroc himself was dead-set against McDonald’s ever selling hotdogs, and actually forbade the company to sell them, even if there was a demand for such products. This was because he regarded them as unhygienic; even today, most hotdogs are made out of scraps and odds-and-ends of meat that end up on the slaughterhouse floor, and back in the fifties and sixties the FDA regulations were even more of a joke than they are now. Food snobs may look down on McDonald’s food quality, but the truth is the company has been obsessed with food safety and consistency since the beginning; it’s one of the keys to making a product that is uniform and uniformly better than the competition. But the company has offered a limited number of hotdog products over the years; mostly at locations where hotdogs are traditional fare, such as ballparks and zoos. They’ve even experimented with bratwurst and corn dogs…

This led somebody to suggest that the company produce its own hotdogs, using its own suppliers, processors, factories, and so on. To make them look unique, and to keep from having build bun warmers in different shapes, the new product would be circular, like a doughnut. Prototypes of the new sandwich had been created, and the company had actually progressed to the point of looking into a slightly different bun for the new product (asking if its bakery supplier could make these) when several members of the management team actually saw one of these, and declared it the dumbest-looking thing every produced by a fast-food kitchen. Even more to the point, the same managers realized that if they marketed the new sandwich it was unlikely to bring in any new customers; sales of the McHot Dog would just cannibalize sales for their burgers – not to mention what would happen if people started questioning the quality and safety of the company’s primary product lines…

Now, I’m not trying to be critical of the R&D people at McDonald’s. The fact is, the company has sold (and continues to sell) some fairly strange food products around the world, and many of these do not bear even a passing resemblance to a hamburger. No one would have thought much of the fried chicken morsels known as “McNuggets” if they’d seen the way those are extruded into shape (and in fact it did take a while for the market to accept them), but that product has worked out quite well, and led to development of other big sellers like the McChicken sandwiches and the Chicken Snack Wraps. It’s possible that given the right market, and the right marketing support, that the McHot Dog would have been a winner as well. It is even more likely, however, that a single focus group discussion would have terminated the project’s development with howls of derisive laughter…

The lesson here is twofold, I think. First, just because a product is technically possible, that doesn’t mean there’s a market for it. Just because you can make a revolutionary new round hotdog, that doesn’t mean anyone is going to buy it. In this case, going to market with the product you need, rather than the one you have, is probably not an option. And secondly, keep a close eye on what product needs your R&D people can meet. After all, if there’s ever a market for circular extruded-meat products anywhere in the world, McDonald’s will be ready to roll before the competition has stopped wondering why anybody would ever want to eat such a thing…