Coca-Cola President and CEO James Quincey attends a press conference with International Olympic Committee (IOC) president and China Mengniu Dairy CEO and Executive Director, as part of the 134th Session of the International Olympic Committee (IOC) at the SwissTech Convention Centre in Lausanne, on June 24, 2019.
- Coca-Cola CEO James Quincey said an E. coli outbreak linked to its biggest restaurant customer, McDonald's, isn't likely to hurt the beverage company's sales at this stage.
- The CDC said its investigation has linked the outbreak to the fast-food chain's Quarter Pounder burger.
- The burger will be temporarily unavailable in some McDonald's locations, and the company said it's also taken steps to remove onions that might also be contaminated.
Coca-Cola CEO James Quincey said the company doesn't expect an E. coli outbreak linked to McDonald's to hurt the beverage company's sales.
"When one looks at what's in the media so far, in terms of the states that have been affected, I would say at this stage it's not going to be a large, significant impact to the business," Quincey said on Coke's third-quarter earnings call Wednesday.
McDonald's is Coke's largest restaurant customer, and the two companies' symbiotic relationship has existed for nearly seven decades. Most recently, CNBC reported that Coke contributed marketing funds to McDonald's this summer for its $5 value meal, which includes a small soft drink, to make it more attractive to franchisees who can otherwise be wary of steep discounts.
"We're a big partner of McDonald's, they're a big partner of ours," Quincey said. "We'll be helping them in any way we can as they work through whatever's happening here."
On Tuesday, the Centers for Disease Control and Prevention announced that it has linked an E. coli outbreak in 10 states to McDonald's Quarter Pounder burgers. The agency said 49 cases have been reported, with one fatality.
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CDC investigators have narrowed in on two ingredients as the potential cause: the burger's onions and its fresh beef patties. Both ingredients are unique to the Quarter Pounder burgers, although cooking the patty at the correct internal temperature should kill the bacteria.
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McDonald's said in a statement on Tuesday that Quarter Pounders will be temporarily unavailable in several Western states, including Colorado, Kansas, Utah and Wyoming, and portions of other states. The company also said it's instructed all local restaurants to remove slivered onions from their supply and has paused the distribution of that ingredient in the affected area.
"We are very confident that you can go to McDonald's and enjoy our classics. We took swift action yesterday to remove the Quarter Pounder from our menu," McDonald's USA President Joe Erlinger said on NBC's "TODAY" show on Wednesday morning.
At this point, it's unclear what impact the outbreak will have on McDonald's own sales.
The outbreak comes as consumers broadly have been spending less at restaurants, hurting both McDonald's and Coke. McDonald's and its fast-food rivals have been leaning into discounts in the hopes that deals will bring back customers, while Coke has been chipping in to market the combo meals to boost its own sales.
Despite sluggish consumer spending, Coke's third-quarter earnings and revenue topped Wall Street's estimates, thanks to higher prices. Shares of the company fell more than 2% in morning trading.
