Not lovin' it: Why McDonald's is shutting down in Bolivia

For the first time in the history of McDonald’s, the first food giant has shut down operations in a country because they find themselves unable to make profits even after ten years.

Anant Rangaswami December 12, 2012 17:25:35 IST
Not lovin' it: Why McDonald's is shutting down in Bolivia

For the first time in the history of McDonald’s, the first food giant has shut down operations in a country because they find themselves unable to make profits even after ten years.

Yesterday, McDonald’s pulled down shutters on their Bolivian operations. In a documentary made to explain the decision, McDonald’s says. “The rejection is in the minds and mentality of Bolivians. Everything indicates that “fast food” is literally the opposite of a Bolivian’s conception of how to prepare a meal. In Bolivia, the food to be good requires, in addition to taste, care, and hygiene, a lot of preparation time. This is how a consumer values the quality of what goes into the stomach, also by the amount of time it took to make the meal. Fast food is not for these people, the Americans concluded,” says TrueActivist.

McDonald's Bolivian experience is not an exception in global food brands. Kellogg's was mystified when it first entered India.

Not lovin it Why McDonalds is shutting down in Bolivia

For the first time in the history of McDonald’s, the first food giant has shut down operations in a country because they find themselves unable to make profits even after ten years.Reuters

In their experience, too, the problem was more cultural than taste. “A typical, average middle-class Indian family did not have breakfast on a regular basis like their Western counterparts. Those who did have breakfast, consumed milk, biscuits, bread, butter, jam or local food preparations like idlis, parathas etc. According to analysts, a major reason for Kellogg's failure was the fact that the taste of its products did not suit Indian breakfast habits. Kellogg sources were however quick to assert that the company was not trying to change these habits; the idea was only to launch its products on the health platform and make consumers see the benefit of this healthier alternative,” says an ICMR study.

However, we're not going to see a Bolivia-like problem in India — India is accepting of fast food, so that's much of the battle won. Fast food giants have tinkered with their menus to suit the palate, introducing, for example, vegetarian pizzas and potato burgers and keeping beef off the menu.

So while Bolivia is lost to McDonald's – and, thanks to their loss-making experience, to other fast food chains, there's still a large world which will be lovin’ it. Because, to begin with, they love fast food anyway.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply