In the 1950s and 60s, fast food chains epitomized by McDonald's revolutionized the restaurant industry and changed farming and food distribution businesses.
The first McDonald's restaurant was actually a barbecue joint that opened in 1940 by brothers Dick and Maurice (Mac) McDonald along Route 66 in San Bernardino, California. At first, they offered 25 different items served by carhops. They catered to young affluent people who were part of the emerging California car culture. Teens drove up, placed their order with the carhops and were served on trays that hooked onto rolled down windows.
In 1940, The brothers figured out that almost all of their profits were coming the sale of hamburgers. They also sensed that teens and families alike were interested in eating quickly. So, they closed down their restaurant for several months and developed their "Speedee Service System" of food preparation. This was a streamlined assembly line for food. They also streamlined their menu to hamburgers, milkshakes and french fries. The burgers sold for 15-cents, about half of what a burger cost at regular diners of the time. With success, the brothers franchised their enterprise and had eight restaurants open by the early 50s.
It's significant that McDonald's concentrated on milkshakes because that brought Ray Kroc to McDonalds in 1954. Kroc was selling the Multimixer a machine that could mix five shakes at a time when he became fascinated with the Speedee system. He asks the brothers to allow him to franchise McDonald's outside of California. They do and Kroc opened his first outlet in Des Plaines, Illinois, a suburb of Chicago.
By 1958, the company sold its 100 millionth hamburger. By 1961, Kroc bought out the McDonald brothers and opened a training facility called Hamburger University in Illinois. The rest, as they say, is history.
In a way, Burger King was an outgrowth of McDonald's. The same year that Ray Kroc visited the original McDonald's, James McLamore and David Edgerton visited as well. They were both graduates of the Cornell University course in hotel administration, and they also saw the potential of assembly-line fast food. They opened their first restaurant in 1954 in a suburb of Miami, Florida. Now, Burger King has more than 11,220 franchise outlets in 61 countries.
The franchise model was quickly adapted to other types of food, for example, pizza. By the early 50s, servicemen returning from Italy brought back a taste for pizza. Up until then, pizza was a regional dish concentrated in Italian immigrant neighborhoods in New York and Chicago. New York pizza was very thin, and Chicago pizza tended to be very thick. After WWII, other local pizza joints began to open up with a variety of recipes.
In 1958, Dan and Frank Carney borrowed $600 from their mother and opened the first Pizza Hut in Wichita Kansas. It was so successful that they began franchising restaurants quickly. By 1968, they opened their first restaurant in Canada. Now they have operations in over 100 countries.
Dominos added delivery to the pizza business when they opened their first store in Detroit Michigan in 1960. Their guarantee delivery in 30 minutes or it's free helped them expand to include more than 8,000 stores in 55 countries.
Today, there are 4.2 billion pizzas sold every year by 60,000 pizzerias.
The franchise model with a central source of supply for food items and standardized menu became so successful that fast food joints are now part of multi-national corporate giants. Pizza Hut is now part of the aptly named Yum! Brands, a corporation that also owns Taco Bell, A&W, Long John Silver's, and the American icon KFC.
In the early 1950s, Col. Harland Sanders was both a victim and a beneficiary of the automobile boom. Since the Depression, Sanders had been serving fried chicken prepared with a "secret recipe of 11 herbs and spices" at his gas station and restaurant in Corbin, Kentucky. But the route for the new Interstate 75 was going to bypass his establishment, so the Colonel sold his property and started traveling across the U.S. trying to sell his spice recipe and preparation method. Sanders claimed that frying his chicken in a pressure cooker shortened the preparation time. The short cooking time would take advantage of the fast food boom. No one bought, until Pete Harman of South Salt Lake, Utah, opened the first "Kentucky Fried Chicken outlet in 1952. Today, KFC has 750,000 employees and is the most popular Western fast food chain in China.
Coincidently, Dave Thomas got into the fast food business by franchising several KFC stores in Ohio. He was the one who came up the idea that the chicken should be sold in paper buckets to wick away excess moisture, and he also came up with the rotating bucket-of-chicken advertising sign that, at one time, was outside every KFC.
But in 1969, Thomas wanted to go out on his own, and so he opened the first Wendy's in Columbus, Ohio. He stressed fresh, rather than frozen, meat served as square patties prepared fresh and served "hot off the grill." Wendy's was also the first fast food restaurant to build a drive-through window in 1970. That cut down on labor costs because carhops were no longer needed, and all of the fast food chains built drive-throughs within a few years.
The predominance of fast food restaurants changed the food supply chain all the way down to the farmer. McDonald's quickly became the single largest buyer of beef, pork, potatoes and apples in the U.S. That gave them tremendous economic clout.
The fast food system is all about standardization, and so when the companies went looking for someone to supply their meat, they choose to deal with their large, corporate counterparts in the packing industry. IBP began to produce "boxed beef," where the final cuts of beef, including hamburger, were produced at the processing plant rather than the local grocery. IBP became the largest supplier of hamburger meat to the fast food industry.
Kentucky Fried Chicken buys all of its chickens from huge suppliers like Perdue, Tyson and Pilgrim's Pride. McDonald's gets its fish products from the giant supplier Gorton's of Gloucester.
Because consumers with busy lifestyles needed food fast, the chains needed raw materials in standardized packages. So, meat packers needed a consistent supply of standardized animals to produce their meat. They couldn't afford to deal with the uncertainty of many, small family farms. So, livestock producers became bigger and bigger. McDonald'sand other chains have also been accused of using their huge buying power to keep farm produce prices artificially low.
When McDonald's expanded into international marketplaces beginning in 1971, McDonald's both adapted to local conditions and forced local farmers to adapt to them. For instance, beef is not the lead meat item offered in countries that have cultural taboos or food preferences for other types of meat. However, the company has been accused of changing food preferences and exporting American culture around the world along with its propensity for obesity.
McDonald's and other fast food chains have affected farmers wherever new restaurants open. In 1990, McDonald's opened their first outlet in Russia. When they realized that they couldn't guarantee a high quality, reliable supply of meat and other food products, they opened their own farms, controlling the supply chain at every step.
Written by Bill Ganzel, the Ganzel Group. First published in 2007. A partial bibliography of sources is here.