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Last Updated: Tuesday, 20 April, 2004, 08:07 GMT 09:07 UK
McDonald's: The journey to health

By Stephen Evans
BBC North America business correspondent

Children eating at McDonald's
Can McDonald's retain the next generation's loyalty?

The irony is painful.

James Cantalupo had come out of retirement to attempt what seemed an impossible task: Turning a company synonymous with fat and meat into one frequented by the thin and the cool of a generation where vegetarianism was chic.

On the eve - literally, the eve - of a gathering where success would be celebrated, he died of a heart-attack.

In his first year as chief executive, Mr Cantalupo brought McDonald's back to profit after the first loss in its history - red on McDonald's bottom line had caused shock and self-doubt.

It wasn't the way it was meant to be for a global icon (the phrase is over-used but justified with McDonald's).

Selective growth

Mr Cantalupo had ascribed the recovery to the change from "growing by being bigger to growing by being better".

There were two sides to this strategy: Recognise the changed tastes of consumers and provide healthier options for them like good salads, and cut back on the number of new stores.

New McDonald's chief executive Charlie Bell
New boss Charlie Bell started at the bottom flipping burgers in Australia before becoming the country's youngest manager at 19
The aim would not be to have more and more McDonald's covering every inch of the planet, but to ration them and make sure the ones that survived would be clean and attractive.

Only last week, Mr Cantalupo was involved in the launch of a new range of healthy foods in America under the "Adult Happy Meals" tag.

Throughout its history, the McDonald's way had been to "bulk up" portions - size and calories mattered; the more, the better.

Now, though, it has announced, for example, that it will stop selling "Super Size" French fries.

The results were coming through: Sales were improving month after month (globally, they're up by nearly a quarter on a year ago).

First non-American

Mr Cantalupo died the day before McDonald's biggest convention of restaurant operators was due to take place in Florida, an event widely expected to feature some back-slapping and congratulation at a corner turned.

McDonald's All American High School Soccer Games
McDonald's is keen to build up a healthy image
In the event, the gathering at the Orlando Convention Centre went ahead, albeit, according to one eye-witness, with much sobbing.

But for the board, clear but fast thinking had to accompany the grief.

They quickly appointed McDonald's president and chief operating officer, Charlie Bell, to the top job.

Nobody can doubt the new man's commitment.

He's the first non-American in the post, having started at the bottom flipping burgers in Sydney, Australia.

He then became the country's youngest manager at 19 and a member of the McDonald's board there at 29.

Super Size

Mr Bell had been widely seen as a successor - but not one to take over within the next three years.

He is clearly immersed in the company's culture - and that's important - but most of his time has been spent outside America.

Wall Street was pleased that the McDonald's board moved swiftly while recognising that Mr Cantalupo was central to the re-invention of the company.

Charlie Bell inherits the strategy - and the problems.

Is it possible to turn a company synonymous with fat into one associated with health?

As though to emphasise the size of the task, a documentary ("Super Size Me") is about to be broadcast in America featuring a person who eats nothing but McDonald's meals for a month - and who gains 25 pounds in weight.

McDonald's CEO Jim Cantalupo dies
19 Apr 04  |  Business

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