How restaurants will change in the next 5 years with McDonald's Foresight Director, Jo Lepore

The Menu Mix is a hospitality podcast that talks to senior thought-leaders across the industry, uncovering the future of the sector. Subscribe on YouTube to follow.

In this episode George Wetz (CEO) and Matt Holy (Director of Strategic Projects) talk to Jo Lepore, Global Foresight Director at McDonald's. Jo explains what foresight is, how it is used in the restaurant industry, and discusses some key topics on how it can be applied in the industry.

Key Takeaways

1.  What is foresight? Foresight helps businesses anticipate long-term trends and changes, enabling them to adapt and thrive in the face of uncertainty. It is not about predicting the future, but rather understanding potential scenarios and implications.
2. How is foresight used in the restaurant industry? Restaurants use foresight to identify emerging consumer trends, technological advancements, and sustainability challenges, helping them make strategic decisions about menu development, operations, and supply chain management, among other things.
3. Key trends impacting the restaurant industry:

• Changing consumer behavior: Consumers are demanding more control and transparency regarding food consumption, data usage, and brand interaction.
• Technological advancements: AI, robotics, and automation are transforming both the front and back of house operations in restaurants, creating new opportunities and challenges for the industry.
• Sustainability concerns: Consumers are increasingly concerned about the environmental impact of their food choices, driving restaurants to explore sustainable practices in sourcing, packaging, and restaurant design.
• Government regulations: Increasing government intervention in areas like food labeling, pricing, and labor compensation is reshaping the operational landscape for restaurants.

Episode transcript

Matt Holy: So joining us today is Jo Lepore, the Global Foresight Director at McDonald's. Now, before joining McDonald's, Jo led teams in the CPG space at General Mills and at Mars.

And as if she wasn't busy enough in her current role, she is also the founder of Foresight Insight Group. A nonprofit organization and collective of some of the leading foresight professionals and futurists. 

She also hosts the podcast looking outside where Jo chats with influential thinkers from a wide range of fields who offer fresh perspectives on a variety of topics, but today she's on the other side of the podcast conversation as today's guest on the menu mix.

Jo, welcome to the show. 

Jo Lepore: Thank you so much for having me on and show. It's awesome.

George Wetz: Thanks, Jo. We're really excited to talk to you today. Um, we're going to cover a wide range of topics with you. One area is Around climate change and sustainability. So we wanted to dig into topics like the rise of chicken in the restaurant space, lab grown meat, food waste, and I guess how that thing could impact on kind of global supply chain, over the future. And then also another areas all around AI I know, you know, loads about. , so looking forward to getting to that, but before we do, It'd be really helpful if you could explain to our listeners what the foresight function is in a business and specifically in restaurants. And now how should restaurants be using foresight to make decisions? 

Jo Lepore: Yeah. And that's a really big question. So feel free to jump in and ask me to clarify any parts of it as we break it down. But I think to start, it's good to say that Foresight, can sit. Inside of any function, any business, any team. So it's a really tailored kind of capability that you're bringing into the business to help you to look further out on the kind of further out horizon.

So we often say, you know, horizon two, horizon three, looking 10 years out, or even looking decades out, you can tailor that kind of intel that's coming at you about the changes in the world to whatever topic you're talking about. So you can absolutely kind of have a perspective on the future. Uh, restaurants or retail or shopping or consumer behavior or eating and food. You can also have it about, you know, security and geopolitics. You can have it about entertainment and, , cinema and branding. Like it really stretches across lots of different areas, which is, I think what's really exciting about the field. It's much more about a capability, the capability of being open to looking at unknown emerging. Weaker parts of the future. So just the things that are kind of what we say on the fringes understanding how they might relate to what's happening right now and what they might mean for the future. So we're talking about intentionally observing the changes in the world, particularly those things that are unmeasurable and much smaller. Analyzing them, critically assessing them, spotting the patterns, sort of creating clusters of different Intel together to understand their implications, usually and third order implications, running scenarios, what could this mean? And then ultimately helping your company or your team or your business or your industry prepare for your own reaction to that potential future scenario. So we often say in Foresight that it's not about predicting the future. It's about anticipating the future because we recognize that nobody can predict the future. In fact, it's a common quote to say, prediction is a fool's game. We haven't got a crystal ball.

Nobody does. But there are certain things that if you're looking really carefully at what's coming at you, you can better prepare your business. You can kind of think about your capabilities, readiness, from an internal perspective to be able to handle some of these changes that are coming at us. I think like, it's really good to. Maybe you reiterate the point that when we're talking about the future, oftentimes businesses are very focused on the kind of immediate future. So we know most organizations have a mandate to look 1 to 3 years out. So it's not very often that you would have the business looking further out than that. Unless it's in a specific part of the business, like maybe sustainability. But it's really important that you do that and that you don't discount what's coming in the longterm because you know, there's a famous law called Amara's law, which says we overestimate the short term and we underestimate the longterm. So the decisions that we make today are whether you like it or not, or whether you're planning for it or not, are impacting the longer term future of your organization. 

George Wetz: Yeah, that's really helpful. And I like that phrase you used. It's about anticipating, but not predicting you know, who knows what's going to happen in the future. And I guess, uh, so a lot of leaders will be. Doing this naturally as they're reading the financial news and thinking about political climate and and other topics are looking ahead.

But this is about being in a more formal and structured. of doing that, but also looking at yeah, whether it's, uh, social changes happening or consumer changes and how that could eventually end up being a big thing. that time horizon was quite interesting because I thought you were going to say this is about looking five years, 10 years ahead. a lot of the work is more near term. So you could explain some of the, what are some of the big meta trends, I guess, that are going on right now that relate to restaurants, that restaurants should be actively considering how they respond to. 

Jo Lepore: Yeah, it's really interesting. And like, I like your frame up as well, because it is about studying what's happening today and almost like providing clarity and context around like, why are you seeing this growth of this thing? Is this just a fad? Is it going to grow into something bigger? So it is very much about connecting in the what is and what could be.   So if you think about some of the mega kind of changes that are happening inside of the restaurant space, or I would say even inside of businesses, because if you think about the shape of business models today, really changing and adapting. So you don't really have a restaurant that's just playing like a restaurant. Today, like if you think about Domino's as an example that I use quite often, like being an Australian, when Domino's launched their delivery model, it kind of like spend on a whole bunch of innovation in that, uh, delivery opportunity for, for restaurants. So they kind of consider themselves a tech company, not just, you know, a pizza company.

Or if you think about McDonald's, like a lot of what we say is where consumer facing or a consumer led company. We're really designing around consumer needs and around, creating new cultural experiences with our customers. We're not just a burger company. So I think the expectation is that your business model adapts to the climate and therefore evolves what it is.

And we have so many examples of companies that have done this, like Samsung started as a noodle company. For example, uh, what we see now is, um, and sorry, a slight deviation on your question, but you know, the S and P 500, like half of those companies are gone from when they were in the seventies. So the ones that have stuck around and McDonald's is in that, in that bucket have done so because they're able to adapt.

Their business models and adapt how they think about some of these megatrends that are coming at them in the longer term horizon. if you're constantly kind of paying attention to that, and you're right, CEOs are business leaders are, um, they're naturally kind of reading a lot. They're digesting a lot.

They're getting a lot of information from external sources and their internal. Experts and various functions, the skill is then to say, how are these things connected and influencing one another? And what, what are the opportunities that arise from that for my business? As I think about adapting it to the next decade or to last the next, in our case, 69 years. So to answer your question more specifically, so if you look across the macro forces of change, this is kind of like the lens that I always put on some of the megatrends that we're seeing. So the steep macro forces. So from a societal perspective, like one of the things that we really recognize in the restaurant space, or even in the branding space, going back to that point. Is the consumer having a much higher sense of control over what they consume, whether it's food consumption or media consumption, brand interaction, business interaction, they're wanting more control and they're gaining more control and more knowledge. So that can apply to a whole range of things, including nutrition or Like how their data is used and first party data and loyalty right through to what kind of products they can co create with brands, which I think is a really exciting space if we then move into, sorry, this might be like a really long answer.

You might have to edit this down, but like from, we move into the T which is technological. And obviously here just so much happening in AI, which we're going to talk about. Inside of robotics automation and thinking about how the back of house is changing the front of house is changing and how consumers are even able to order like the example that I love is really started in decades ago in the 70s when they were Um, initially being innovated and then they came into airports and then they came into restaurants and now it's kind of like commonplace that we use technology to order my food. So where that's going is really, really exciting as well. Uh, from an economic standpoint, you know, we see a lot of kind of redefinition of what value is for consumers, because right now, obviously we're living through an inflationary environment. Cost of living is high. We're talking about shrinkflation. What value consumers are getting for their money. But it's not just the dollar that I pay. It's about the entire experience that you're offering for customers. So that redefinition is really interesting in the economic context. We're then moving into E we're almost there. We're getting into E, which is environment.

Right. And so this is like a really, really big one that we're also going to talk about maybe later, but The greater transparency demands for companies to be able to demonstrate, you know, how is your food source? Where does it come from? What kind of footprint does it have? How are you investing in, know, more sustainable options, even in your restaurant design?

So McDonald's is doing some tremendous things inside of our net zero restaurants and circularity and everything else. It's really evolving how those kind of static buildings. Or even design from the outside and then the experiences on the inside then lucky last we have political and obviously this is a really big one that's impacting brands and businesses, particularly when we think about, you know, the shifting expectations of governments and how much they intervene inside of the kind of the day to day. of a restaurant business or the restaurant industry, you know, where you can build a new restaurant, how you should be packaging your food and a restaurant, how you should be labeling or pricing or, how much you're compensating for labor. The government is getting much more involved in that. And so if you think about that entire steep context, the operational world. Inside of a restaurant or for a brand is really changing from a multitude of different areas. And that's where I think Foresight can really help is to, to make you think about the interconnection between a lot of those forces and the implications for your business.

George Wetz: That's fascinating and super comprehensive. I'm going to be replaying and watching that over and over again. So I think the job is of understanding that as a framework, as a leader to then think specifically for my business, what could that mean? What does that mean? What decisions could we be, should we be making right now?

How could we be preparing the future? And these, and these, some of these trends. They can be local or, know, national in nature and also global.  And one of the things I find really interesting is how trends, you know, start and evolve and move around. I was wondering, given your, you know, perspective, can you give an example of a trend that is maybe a major trend that you're seeing in the U.

1. right now or in North America, but emerged or started somewhere totally different and kind of just helping to describe how. Trends seem to move in the mechanics of that. 

Jo Lepore: Yeah, that's a really interesting question because I think there's a lot that you can learn from other parts of the world and how trends transfer, and it's not really about trends transferring, right? It's about cultural norms changing in different parts of the world, expectations of companies changing, innovation growing and transferring across regions.

So that's kind of the bit that we look at is, you know, like if we're asked what are the food trends that are transferring from Europe to. America, I'd be like, that's really interesting. That's not what we do. We would say, you know, what are the, the real cultural shifts that are starting to indicate where change is coming? So I think a really obvious one at the moment is around nutrition. all of that starting to come into play in the U S much more. And obviously it's been really, really prominent inside of with consumer awareness, education, what we call kind of like data literacy, where they're able to know exactly what. goes into that product and therefore what I'm consuming. And if it's right for my health and this kind of very overt focus on nutrition in the European region, of that we're starting to see now play out inside of the American region. And, and obviously health and wellness comes through in a very nuanced way in America, which is really, um, Also interesting is like we have a global, let's call it a trends framework that we deploy to our business.

But we always say, you know, this will come to life in a very unique way for your region, because, , going back to nutrition as an example in the U S you know, it will never be about regulating your behavior. And what you eat or what we think you should be eating. Like, yes, there are a number of things happening.

Like the food pyramid is getting reassessed at the moment. Nutritional guidelines are being reassessed. The labeling on food products is being reassessed. So all of that is still taking place and that's kind of global. then the nuance is like, well, in America, what we value is freedom of choice. So how do you provide more diversity of options that are maybe more culturally relevant? So for example, we know the Latin American diet is quite nuanced and unique and that's starting to come through into the U S. We also know that mental health and well being and how you feel and also like body confidence, all of those kind of aspects are going to play into how nutrition evolves in the American landscape. But I think that is definitely one where, you know, sometimes we say, U S doesn't really like to regulate. We like to innovate. We're a very innovative country, the third most innovative country in the world, according to the innovation index. So we like to regulate after we create a lot of innovation.

So that's the first priority in Europe. It's slightly different. and so there might be sometimes, you know, trends that you see in other parts of the world where you say, Oh, This is less relevant for us because of the current kind of like the, this, the systematic conditions of our country. But I would say all of these global trends and these macro forces are definitely going to play into your region and your country, they'll just show up in a very different way. 

Matt Holy: Wow. Super interesting. You touched on a lot of stuff there. I mean, on nutrition, but also, you know, previously you were talking a little bit about sustainability. Some of the South American diet trends, uh, kind of affecting what we're seeing in the U S right now. And that just got me thinking about chicken versus beef and this really big boom that we're seeing in chicken right now.

so I guess outside of. Diet and access and price. It also seems like part of the trend is driven by Sustainability. Obviously, it's, you know, beef requires a lot more land, a lot more resources, more expensive to produce. could you talk about, guess, the rise of chicken? And we even saw it in McDonald's very recently with the Release of the Chicken Big Mac.

So, yeah. From, from your perspective, what were some of the driving forces behind this big boom in chicken that we're seeing right now? 

Jo Lepore: You know, I guess I have a really important question to ask both of you first, is the chicken Big Mac a Big Mac? 

Matt Holy: it's a tough one. I mean, I'm, I'm an OG McChicken person myself. I actually, when I go to McDonald's, ever since I was a little kid. I would always get the McChicken. I would never get the burgers. So when I saw chicken Big Mac, I'm like, wow, finally they're there, they're make this one's for me. But, yeah, I, I view it as different personally, but, uh, George? 

George Wetz: I'm not, I'm not going to answer other than to   say Athena fly on the wall during those discussions internally would have been absolutely fascinating. 

Jo Lepore: Yeah. And to be fair, I wasn't a part of those conversations internally. I would have been like, you know, I'm, I'm that annoying person. That's like, let's just experiment with all of the food and let's just throw everything out there. So I think it's really cool. I actually ordered my first chicken Big Mac recently. um, Yeah, I think that the U. S. menu team in particular is really great at kind of, evolving and innovating on the core. So 70 percent of our sales come from our core menu, and this is things like the Big Mac, the fries, the nuggets. And so really thinking about how do you create, um, an evolution of what people already want and love and are kind of coming in and get like their staples almost, you know, the stuff that they really love from McDonald's. How do you experiment with that? And I think an area. we are experimenting in and growing in is chicken. People love our chicken products. Obviously they love our chicken nuggets. They love our um, the crispy now that we have our chicken sandwich portfolio or chicken burger, as we like to say in Australia. So obviously we have things like the chicken sandwich wars and all of this conversation around the growth of chicken, chicken products are absolutely growing. And again, I don't. Necessarily look at that in as granular detail as our US innovation or menu team would because we're not really looking at things like flavor trends or portfolio trends, what we can see is this movement towards, like, firstly, diversification of menu options. So people do want just more choice, whether it's, you know, that they like, just being able to choose different things for, uh, sensorial diversity or whether they're doing it because they feel like a, you know, a lighter option or the, I don't know, more kind of experimental tasty option. I think what's really interesting is when you look at chicken, uh, I love looking at the Asian region because that's a lot of where chicken sandwich or chicken innovation growth really came from. and a lot of those markets, the way that they're experimenting and exploring, and I'm talking even with McDonald's with chicken products is just so. Like big part of my job is I'm going and researching what's happening in other parts of the world. And I can tell, I can't tell you how many times I've ordered on my phone, like straight away, because I've been researching it because it looks so bloody delicious.

So yeah, I think that it's a response to growing demand from consumers for a wide range of needs. Um, I think it, it does kind of show a shift in the industry. Because we do see chicken growing at such an expedited rate, you know, much more so than, than beef, although beef is still growing. And it's an interesting thing when you look at different parts of the world and how that mix between menu proteins is starting to change. And so don't think it's necessarily directly reflective of this, uh, the points that you were making around sustainability or at least consumers awareness of that. I don't think it's quite there yet. It's more about the experience. I mean, unlike, not unlike, um, anything else that we know about food and restaurants and retail, it's taste first, right?

People go in for a great tasting product. That's where a lot of the innovation is driven from is thinking about new ways that you can deliver on that. And then doing that in a way that's kind of like familiar, great value, accessible, affordable, all of those things that really deliver on customer needs. And then in the backend, you know, we as a business are really thinking about how do we do that in line with our sustainability ambitions, uh, you know, to make sure that our supply chain can handle it, to make sure that we're offering, you know, product for our franchisees as well, because obviously our franchisees need to, you know, be well taken care of when we're launching product expansions and innovations. So, it's really interesting, like coming from a CPG background and coming into retail, it's a, it's a really different way of thinking about innovation and expansion of portfolio, which is really cool.

George Wetz: That's really interesting. I'm thinking about an innovation and ultimately the end product needing to be good quality, tasty and commercially viable. One of the things we really wanted to ask you around was, was lab grown meat, which has been a lot of talk about in

Jo Lepore: Yeah,

George Wetz: few years. Could you just touch on what the kind of state of the art here is with what's possible today?

But then also, do you have any views on what consumers think about it or might think about it in the future? Because from what you were talking about before with the core offering, You know, you're switching out ultimately you would be switching out a core ingredient within the offering, but it's also a fundamental change at the same time. So anyway, I just wanted to open that up to you and see what views you had on that. Not, 

Jo Lepore: yeah, and you know, like, my, my perspective on it is much more of like just studying that entire growing space versus specifically what McDonald's thinks about it or is doing about it. But I can say it's incredibly nascent. Like, it's like, Tiny right now to the point where, you know, there was a lot of innovation and lab grown products, um, or cellular based products, uh, or synthetic biology in general, in food, we're seeing this kind of growth of mycelium products or kind of alternatives through mushrooms and things like that now evolving lab grown and kind of replicating that. Product inside of those conditions, I think, yeah, they started off kind of saying, well, we have this innovation. It could be really beneficial for sustainability. It doesn't compromise on taste too much. It's very expensive right now, but it'll be less expensive in the future. And they realized that actually people are not ready for this.

That it lives much better inside of a kind of a controlled environment where people who are more willing to experiment, those kind of early adopters are not necessarily people who are like super concerned about the planet sustainability and all of that. Although some of them are, but much more just people who are a little bit more like adventurous or like trying new things.

So high end. Fine dining type of restaurant experience. Like if you think about what Vow is doing, the Australian company and like lab grown inside of Australia is absolutely huge, right? It's a huge business, high potential growth. now launching into the Singapore restaurants to create a kind of a unique experience as we get people comfortable with this. to your question, I think it's really, really small. It's going to take decades before this is even substantial. That's not to say it's not worth looking at or investing in or experimenting in. I don't know if you guys have tasted these products yourself. 

Matt Holy: not yet. I mean, I would love to, I, you know, just haven't had the opportunity. So Jo, if you have any, uh, any ins on how to do that, definitely let us know. 

Jo Lepore: Yeah, I think a lot of these kind of food expos are a great place to taste these products. Um, I had an opportunity, I think the last one that I tried was in Dubai,  uh, where they had on display. I mean, I think just you guys answering no is a great kind of indication of, you know, Probably most people have not tasted it or have not eaten, probably even really heard of it or really understand this is formed.

And one thing we know about people is people really want to know what they're eating and what they're consuming and what they're buying. So I just don't think that we're quite ready for it yet. It's also just like incredibly expensive. That being said, going back to that point, I think that there's a lot of really, really interesting things happening in food tech innovation inside of particularly plant based products.

Um, you know, Like Eura Foods is a, is one that I really love. Levee is another one that I love where they're using lots of, I mean, obviously I have to say NotCo as well, using a lot of technology and science and interdisciplinary methods to think about how we create food and kind of new and unique ways that can help us to deliver on the things that people love in a way that really meets their expectations, and evolve our industry.

But a lot of these things. Are going to take time because they depend on three core things, one understanding and acceptance of them to pricing, and being able to get these things to be affordable and three, the types of regulations that are required to be able to actually sell these products mainstream way, which like, if you look at all of the regulation around, even like lab grown, Sale of products or plant based labeling of products in Europe.

That's happening right now. know, not everyone is like gung ho and ready for this. The, it's a systematic change in our industry. That's going to take.

Matt Holy: Interesting. Yeah, definitely right at the very, very beginning of that, innovation adoption curve. really excited to see where, where it goes, but I guess transitioning the conversation to an area that is, you know, just starting to affect different parts of the world in terms of, uh, you know, supply chains, uh, of food commodities, global warming.

We're just starting to see. Some of how that could affect supply chains moving forward. I mean, there's, there's tons of statistics that, you know, by 2050, , rice, like a staple good right now, 90 percent of rice production could be exposed to higher extreme heat stress. coffee as well is another big one that, you know, I drink coffee every day.

I think a lot of people drink tons of coffee every day as well. Up to 50 percent of, you know, the areas that, uh, are the biggest coffee producers in the world as well will be affected, by rising temperatures by 2050, wheat, shellfish, dairy. It feels like nothing is safe. So I guess, is there anything restaurants could.

Do today to, future proof their business a little bit for some of these changes, that we're starting to see in the supply chain due to global warming. And I guess, secondly, what are some of the biggest risks that you foresee, from global warming to the restaurant supply chain right now? 

Jo Lepore: Yeah, gosh, what a huge question. Um, I mean, a really, really important question because like, I think I mentioned it before, but going back to that point, we're going to need to produce 70 percent more food to feed our growing population by 2050. We also know the cost of food is going to go up really significantly in the next few years because of extreme weather events and declining crop yields and even, um, expense of food.

Farming the food that we need. So I think a lot of the challenges that we're facing, we're kind of aware of, but maybe underestimate again, going back to underestimating the long term underestimate how much we're going to have to deal with at the same time. This is a part of the reason why we talk about the poly crisis, right?

It's like multiple crises happening at the same time. So, yeah, I think some of the big things that we're going to be, uh, You know, looking out for is how do we produce the food that we need to be able to feed our populations? How do we produce it in a way that's sustainable? And how do we produce it in a climate?

That's kind of making it harder to. Grow food. We also have, even like, as you put that food through the supply chain, we have a lot of issues around, you know, a third of the food at the moment is wasted. So we have pretty inefficient systems. So even if you grow it, a lot of it. Might not meet standards and has to be disposed off.

Even if you put that food on a truck, it might not even make it to its end destination. Like we know, I think half of the food in India is wasted because they don't have cooling in their trucks. once it reaches the shelf, it then has a limited life where a lot of that gets disposed off. If it reaches restaurants, there's a lot of food waste, although in McDonald's where we're doing a lot to be able to tackle that. Um, and then obviously we know from a, like a in home consumption perspective, there's a lot of food waste as well. So what's one thing that you can do is visibility and tracking. There's a famous Peter Drucker quote, you can only act on what you can see. Right. So we need full visibility of that entire end to end value chain what are the gaps that we have right now? What are the potential implications, science based targets that we're trying to meet, you know, so really thinking about SBTI and how we're like actively making changes to be able to move towards that 

George Wetz: SBTI? 

Jo Lepore: Science based targets. Yeah. Yeah. Just added the acronym just to sound fancy. yeah, I think like one of the things that keeps me up at night if I think about this. , so I couple of weeks ago, I had the opportunity to meet with. think was about 15 of our farmers for a farmer panel. So, , our farmers are basically directly engaged with our suppliers. So, we, we kind of rely on the cargills of the world to engage with our farmer community. But in this instance, we, uh, Actually had them kind of fly in and have a seat at the table and had a conversation with them about some of their challenges. And I had the opportunity to come into that and have a conversation with them, some things that I'm seeing and hear their questions and tensions.

And they're dealing with a lot. And I just have so much empathy and sympathy. For them, because like, they're only getting in America anywhere, 15 cents of every dollar for the produce that they produce is getting harder. The next generation of farmers is less engaged. We're having a lot fewer younger people going into farming. have, you know, most of the global farmer people are retiring soon. So like that, going back to that point of like, if we think about change in the context of food and restaurants being about food, obviously, how are we going to grow this food? How are we going to support the agriculture industry to survive and to evolve to what it needs to, there's a lot of really big challenges underway. And then like, if you think about like even like putting food aside beyond food, you have things like, like building construction and building new restaurants. So we have a public goal around growing, I think it's around 10, 000 restaurants in the next years so it's a lot of new restaurants that we're trying to build across the world.

And how are we building them? What kind of materials we're using? Are we using, you know, sustainable practices to make sure that we're making a lesser impact on the environment or that we're being really purposeful about how we design things to for this changing climate that we're all growing up in.

So. Yeah, I think it's a really big question because it's a, it's a really challenging one. So what can people do? I think it's just be really, measured and, intentional about how you think about the future in that context.

George Wetz: That's, that's very insightful. A quick question before we move on would be, do you ever see there being vertical integration of the supply chain from end restaurants to right back into farming? right now, obviously farms then pass on to the suppliers, pass on to the restaurant, but you see in other industries as they mature, they, they go through that process often as sort of vertically integrate through the supply chain. 

Jo Lepore: yeah, it's a really interesting concept. I mean, I think it's definitely possible. And like you said, we do see that in some cases, not necessarily the most scalable option, at least not right now. I think what we're finding is that We, I mean, we try to source a lot of our products, um, locally, to give you an example.

Um, in some cases we have 80%, 90 percent local sourcing, even right through to ingredients, machinery, components, and everything, but that's not always the most sustainable option and it's not always, you know, the, the most efficient option. So this kind of goes back to the complexity of our modern world, that we do have these systems, which are on scale globalization and kind of creating efficiency, which don't always go hand in hand with then. Thinking about a new business model and adapting to that based on the conditions that you're facing right now. But I think that that's where, like, if you have space to experiment and you have case studies where you can look at how some of these things work. I mean, another example is this is not directly for restaurants or vertical supply chains, but like donut cities or donut economics.

Or like the 15 minute city concept where these things are not really scalable right now. They're not completely like 100 percent ironed out right now, but where we have those examples of cities planning towards concept of being completely, kind of repurposing. Everything that they have, it's upcycled, it's short distance commutes to obtain what you need. it's really interesting to study to see how we can then scale it. So I would say it's a similar thing with vertical supply chains. 

Matt Holy: That's cool. Well, speaking of things that are still, I guess, in its infancy, this is an area that you're very much an expert on that we're excited to talk to you about. Generative AI. guess  you've, you've seen some applications within McDonald's, but also just broadly applied across the industry. , what are some specific use cases that you think. AI is mature enough to tackle today, and provide benefits to, to restaurants versus, you know, what do you think would require another couple of years to really do what it says on the box? 

Jo Lepore: Yeah. I'm very much like a pragmatist when it comes to generative AI. I see so much exciting potential in it, but also a lot of kind of overstating its, current delivery and like really, really scared about some of the aspects that are also playing out in gen AI. The sweet kind of middle ground on that.

I think that there is a lot of application at the moment inside of customer service. Like that's pretty much where the majority of the focus in generative AI is being used right now. So obviously. Um, this can be from back of house, front of house, however you  want to employ it. It has a pretty clear application there.

And, and it's pretty good, actually. It's pretty well received by our customers and it's pretty well, adopted by crew. So even if you think about. If you think about it in the context of problem solving for crew members, that's kind of where a lot of our focus has been is you're, and I know this is like a running joke in America, the ice cream machine breaking down.

If you're, uh, you know, a 16 year old working in a restaurant, the ice cream machine breaks down instead of going to a physical manual where you're like flicking through pages, trying to find a solution. What if you had, An AI in your, like an AI manual in your ear that could help you work through that. And then you take that to the next level, whether it's back of house or front of house, if you don't have fluent English, and you're trying to do that, how could it translate from your native language? So I think a lot of that is really well adopted right now. It's growing and it has huge potential, obviously also huge implication for the customer services. Industries that are going to be impacted by that. I think it's also, really promising in the food innovation space. So going back again to companies like not co, which have their juice up AI platform of being able to kind of create and innovate. leveraging kind of a broader database of ingredients or scientific components and how they can come together to create new product solutions and innovations.

I think that's also been proven to be really effective because combinations of different things, we can only do that so quickly as human beings, the AI can do that really well, which is also another area that I think is really high potential, which is knowledge management. So. In in house knowledge management, creating more efficient systems with all of the copious data that we have.

We know so much work is repeated. so this is kind of going back maybe to head office application of a I, trend like trend analysis is another area that you could use it for. Although I would say with great great caution because there you're really looking at what was trending in the past, not really telling you what's ahead in the future. But a good starting point. I think what we're seeing is like, you know, seven and 10 CEOs are saying that they want to use it more in the future. They want to invest more in it. I think it'll be a used to address some of the key questions and issues that they have as global business leaders, like competition, changing business models, new skills that you need for your labor force. I think that there's, you know, A huge potential for it, but it needs to be used, kind of with caution. And that's kind of the approach that McDonald's has. We've created a dedicated center of excellence for generative AI so that we can really methodically this out in a very careful and conscientious way, by pilots more in the back of house versus the front of house. with people who are data governance experts, who are data science experts, who are AI experts. So they really understand it. And then as we pilot experiment, have case studies, we can scale it out. Uh, while we're kind of taking in from markets and functions around where they're wanting to see the application of it. So I think the one area that I would caution, then I would stay away from is maybe caution is the better word is brand. communications and marketing, because we know that one of the biggest issues with generative AI is brand safety and IP issues. that's the area where I think you can be really playful, but it potentially opens you up to pretty significant risks.

So. Approach it carefully. 

George Wetz: That's that's very interesting. You've got to say the sort of center of excellence So there's a hub within the business that can think about these topics and integrate them into the business for practical purposes on the right became exposed to just a few weeks ago was, really thinking about AI as a thought partner. So using it when I had to write a financial report recently, actually, and I just uploaded it there and gave it some context. And it did a really good job for me of kind of creating that. And so there's a whole bunch of things at the head office. And that was, I guess the reason I bring that up is it was a, it was a non obvious use of it for me that sort of sudden came to me and I'm finding incredibly valuable. wondered if could share any non obvious, uses of it right now that you think would be interesting for people to play around with or consider themselves. or if there's, or if there's not, or less of that, maybe kind of what the one step ahead from today, you think people might be thinking, should be thinking about. 

Jo Lepore: So, I mean, uh, one thing I would say back to you though, is like, did you, do you use the AI to shortcut towards what you need or do you use it to learn? I think that's where the tension. Is right. Like, I don't know if you've gone through this exercise, but I've put, , reports that we read a lot of reports in foresight, like 200 a year, put a report into the AI and ask it for the summary and the, the insight and the aha is really missing in that summary. But if you're using it to like, Hey, just help me, like I've already done the insight. I just need you to like, summarize it for me. Then I think it's really, really strong. 

George Wetz: I've been using both,

but both ones, and the one where I've had the real big aha is where I'm actually using it as somebody, so instead of getting up with a whiteboard with somebody and have bouncing ideas. Thanks. actually going back and forth with it to generate ideas and drawing on all of

the knowledge, because it just very quickly exposes me to different ways of thinking about things that maybe I would have got to eventually, or I might have missed. And it's provided me with a fresh perspective, similar to if I'd had an expert in that domain, of with me in the room. And that's led to me, I think, making much faster progress on some of the decisions that I've been making recently.

Jo Lepore: Yeah, yeah, definitely. I think it's, it's really good for that. It's almost like a conversational search, It's like what you probably would have done with Google in like really, really tedious steps, but you can have in a much more intimate way. I do think that's a huge opportunity is like, you know, you can, a data, like a specific, you can create obviously a specific, AI platform based on this specific area that you're looking at and then dive into it, ask questions, go deeper.

I think it's really, really, uh, promising in that respect. so going back to your question, I think, uh, one area or two, there's two areas that I'm really excited about. One is, I mean, what, sorry, just going back. I really prefer not to use it for anything that requires critical thinking and creativity. That's my own personal kind of mandate for myself. You mentioned before, I've got a podcast.

I absolutely will not get it to write my show notes, or anything or design my   graphics. Like that really goes to a person that can actually, create a more personalized kind of experience with it. We've all seen those videos of like students in school who are copying and pasting the questions and the AI just answers it for you.

So I think, you know, when you're writing, when you're learning, when you're listening, when you're asking questions. You're growing as an individual. And I hate to think that that is starting to decline in a road for human beings. getting so far away from restaurants now. Let me bring it back. So, one area that I think is really promising and maybe non obvious is really thinking about how you create almost like a.

You know, like a digital twin of yourself that the AI can dynamically analyze to give you advice. That's really tailored for you. So an example of where I think that's kind of coming as January AI. So the, um, specific, uh, app that was designed by a nutritionist that can give you like a diagnosis of yourself. And then as you're eating products and you're kind of going about your diet restrictions or goals, it's really. It can help you in real time to kind of predict this is your response. This is your glucose response that you might get from this, or this is how it's gonna veer you off track. Or maybe you should try eating this instead. So I think that that is really, really interesting where you can apply it in a way that really matches your very Advanced data about yourself that you wouldn't normally analyze. So, you know, we talk a lot about things like the aura ring or like tracking my sleep and like, am I walking around enough?

Like people know that information, but they don't really know what to do with it. Like, yes, I'm getting 8, 000 steps. I need 10, 000. Okay. know that. So what's the implication of that on my goals on my, you know, more, uh, nutritional. It's like scientific physiological aspects of my, my individual health.

So I think all of that, including, you know, DNA testing and everything that's going to feed into that together is a really exciting space in medicine.  What that obviously means is that imagine somebody going into a restaurant and ordering food and getting a real time generative AI recommendation on whether this is right for me or not, or recommendation for something.

On the menu or something at a different restaurant. So I think it has really big implications for the restaurant space and food more broadly. And then the other one that I think is really interesting you know, there's a lot of AI that's kind of, being used to tell stories. And again, I wouldn't use it for creative expression, but I do think that. If you, uh, if you look at some of the emerging kind of use of AI to be able to, for example, input a personal heritage story for me and my family, and then it visualizes that in an animated film. kind of a lever to pull to be able to create something that's a little bit more personal and meaningful. So one example, one, what if that I gave to our businesses, you know, we have a lot of these founder stories. So people who created McDonald's  products in their restaurants, like the big Mac was created by a franchisee, you know, the nuggets, like all of these items. if you could retell that story and almost have it like a movie play out as you're onboarding stuff, or as you're kind of creating these, um, more emotive stories with our customers, it has a lot of, really interesting. Potential in getting us started and, creating a more meaningful and personalized connection with our, customers 

Matt Holy: That's really cool. I like it especially, the point you touched on about personalized nutrition and it like recommending dishes in the restaurant or suggesting You know, maybe you should have this instead of that. I feels you know, it's no secret. There's. An obesity crisis epidemic in the U.

1. And I just feel like something like this could be globally. Yeah, fair, fair enough. and something like this just feels like it could have such big impact, on helping,  Even solve a small part of that. So that's, uh, that's really interesting. We could, we could talk for ages to you, Jo. It's been, it's been really, really interesting, but before we close out, did want to chat a little bit about your podcast, uh, looking outside.

Uh, I I've been an avid listener since we, uh, initially linked up a few months ago. Uh, and you've had tons of really interesting conversations with. Everyone from like a top LAPD detective to CEOs and scholars and even like a pastry chef. So can you share a little bit about, I guess, how you started the podcast and what some of your favorite conversations have been, in your show thus far? 

Jo Lepore: Yeah, definitely. Um, so. I started it really as like a bit of a hobby. I'm, I'm sure that you guys and your inspiration for the show is relatively similar where you're trying to get an insight into something from various kind of perspectives and angles from across the industry. And, you know, when you have this conversation one on one with somebody, It's really insightful.

And you're like, Oh man, I wish I could share that conversation with other people. So that's basically how it started. I'm, I was having these really interesting conversations with people who didn't do what I do that were in a completely different field or industry. I felt like maybe other people can benefit from this.

So I decided to start the podcast. Um, it's been a nice way for me to kind of, um, Diversify my thinking and create new connection points. And I I'm honestly really always surprised when people say yes to coming on my show, like particularly cause I had an airline pilot on, I had the LOPD detective on, um, yeah, I had a French pastry chef on.

I'm like, why are these people saying yes to me? So I felt really, really lucky to be able to, explore their specific area of expertise and then, you know, think about the connection that that has to. What I do day to day and to my business and to bring that back. So I appreciate, um, the opportunity and the feedback that I get from my audience, that they're getting something similar from it in terms of, you know, some interesting conversations, I think it's like really a balance between the people who come on, who are like experts in an area.

That I also operate in, like I've had a lot of futurists on. And even though that is my day job, I still get something really, really different out of those conversations. Like I had Amy Webb on the show who is a pretty, pretty famous futurist. She talked about how you need to bring more science and quantification into projecting the future. Um, I had Andy Hinz on who is studying, , post-capitalism. So what happens once the capitalist world that we live in. We'll stop and we'll go into like, not, not thinking about GDP growth as we think about growth of society in the future. So like really different angles on similar fields. And then the people who are like really, really close to food and how our food industry is evolving, like, You know, Seth Goldman came on and, and spoke about how he's trying to create kind of more nutritional, more planet friendly food. then, uh, you know, again, like going back to the pilot and the, LAPD cop, it's like, I got to ask an LAD cop how he. He interrogates people in a room where they're lying to him. And he like uses tactics of body reading and, you know, like body language and acts of deception to kind of get the truth out of them.

Like actually you might think it's really disconnected to what you do day to day, but it's actually really, really relevant if you think about it in a, like, how do I interact with people? How do I make sure I'm more persuasive? Um, Yeah. So it's, uh, yeah, it's a lot of learnings that I've taken from it and it's been really good fun.

George Wetz: And that's a really nice message to end on. I think it's, you know, you've talked a lot today about connecting disparate and maybe unrelated phenomena that are happening in society and trying to understand them, make sense of them and see. If, what, and when be really thinking about it in a, in a practical sense, and the inspiration can come from, from everywhere.

So encourage everyone, if you're interested in, in the topic to go and check out the looking outside podcast. So Jo, thank you so much on the show today. This is Jo global foresight director at McDonald's. Um, you can find her on LinkedIn. Uh, just look for her as Joanna Lepore and that's L E P O R E. she's a regular content contributor to all sorts of things to do with Foresight in the future. So it's been awesome to have you on the show today. Jo, thank you so much for being 

Jo Lepore: Thank you so much. Had good fun. Really enjoyed the conversation.

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