Opinion: As McDonald’s retreat from Russia shows, branding goes well beyond the burger
To build trust in today’s world, brands must align with customers’ values and demonstrate that they help to address social problems
As Moscow awoke to a grey morning on January 31, 1990, a new era was dawning. By the time the USSR’s first McDonald’s restaurant opened, hundreds of hungry Russians, clad in fur hats and blowing into their hands, were waiting in line. After McDonald’s CEO George Cohon’s 14 years of intense negotiations with the Soviet government, Muscovites would get to taste capitalism in a bun.
“If you can’t go to America, come to McDonald’s in Moscow,” urged the burger chain. The Berlin Wall had been torn down a few months earlier; by the end of 1991, the Soviet empire would collapse entirely.
One of a handful of brands that encapsulated Western values, McDonald’s was more than a burger joint. In March 2022, after Russia’s invasion of Ukraine, McDonald’s closed its 850 restaurants across Russia, in protest against “unspeakable suffering to innocent people.”
Brands have always been about values, but never more than today. Companies like McDonald’s have become acutely aware of the need to go much further than providing good, reliable products and service with a smile. They need to align with their customers’ beliefs, to think beyond the bun.
Authenticity rules
Canadian consumers are becoming increasingly conscious of the values that brands represent—and they trust brands whose values align with their own. This impacts the bottom line: if consumers trust you, not only do they stay loyal to your product but they recommend it to others. Companies are awakening to this reality and actively managing brand trust.
Since 2015, we at the Gustavson School of Business have conducted an annual survey of brand trust, the Gustavson Brand Trust Index. Each year, we analyze brand ability (how a brand performs its function), brand affinity (how it treats customers) and brand authenticity (the values it represents), for over 400 brands among a sample of over 9,000 consumers.
We find that authenticity is an important factor in consumers’ overall trust of a brand. A consumer today doesn’t just consider the product, service or value for money. They take into account whether they trust the brand to help address problems in society—be it by reducing greenhouse gas emissions, treating employees well or being a good corporate citizen.
This is especially true of millennials and younger consumers. For example, in 2021, we saw that those aged 19 to 35 recognized Patagonia as their most trusted brand, which we may attribute to its support of climate activism. The previous year, this younger group ranked Lush Fresh Handmade Cosmetics—with a history of supporting grassroots campaigns—most trustworthy.
Companies are acutely aware of this increasing scrutiny: in 2018, the Business Roundtable, an elite group of CEOs of America’s leading companies, issued a statement that committed their organizations to delivering sustainable value to all stakeholders—customers, employees, suppliers—a far cry from the old model of exclusively delivering shareholder value.
A hasty exit
Perhaps the most astonishing part, however, of brands’ reaction to Russia’s invasion of Ukraine was the speed with which it happened. Oil and tech companies led the rush to the exits. Following the invasion, BP, ExxonMobil Corp. and Shell all announced closure of their Russian operations. Tech giants like Apple, Amazon, Microsoft Corp. and Samsung Group followed rapidly by suspending or shuttering their business in the country. Retail brands like McDonald’s and Starbucks were slower to respond. But in the face of widespread criticism, they quickly closed down, too.
Our research shows that trust, once lost, can be slow and difficult to recover. It’s clear that companies are not just aware of the impact of values on consumer trust: they’re now proactively getting ahead of a trust crisis by taking rapid action.
Gone are the days when businesses avoided taking a position on global issues like sustainability, justice and security. Consumers now want to know that their purchasing decisions help build a better world, and they expect brands to behave accordingly.
For now, McDonald’s restaurants in Russia are “temporarily closed.” What is permanent is the fact that it’s no longer just about the burger: we invest brands with our hopes, fears and beliefs about how the world ought to be. Would you like trust with that?
