McDonald's massive burger change won't impact the Big Mac — and it reveals the fast-food giant's biggest challenge (MCD)

However, the chain isn't currently making the change to other burgers, such as the Big Mac.
"We have value customers and they're happy with where those products are," the company's U.S. president, Chris Kempczinski, told Business Insider
McDonald's needs to win over upscale customers with innovation like fresh beef, while still

McDonald's is now serving burgers made with fresh beef. However, the Big Mac will not be affected by the change — and there's a clear reason why.

On Tuesday, McDonald's announced it was swapping frozen for fresh beef in all of its Quarter Pounder burgers by early May. Roughly 3,500 restaurants across the US are already serving burgers made with the fresh beef.

The company's U.S. president, Chris Kempczinski, told Business Insider that there aren't any plans to make the switch for other burgers, such as the iconic Big Mac — at least not yet.

"Much like you saw with all-day breakfast, we started with some things," Kempczinski said. "We're starting with the Quarter Pounder and we'll see what the reaction is and go from there. So, it's possible."

Executives said McDonald's decided to make the fresh-beef swap on the Quarter Pounder, instead of other burgers, after listening to customers' demands. Linda VanGosen, McDonald's vice president of menu innovation, said that a certain subset of customers has been seeking "hotter, juicier, more flavorful" burgers from the chain.

"We have value customers and they're happy with where those products are," VanGosen said.

McDonald's recent menu initiatives have been split between attracting customers looking for higher-quality (and more expensive) food and diners that simply want the best deal possible. According to Kempczinski, the two groups "tend to be two customers segments" that visit McDonald's for different reasons.

Budget shoppers are visiting McDonald's for the deals, such as the chain's new $1 $2 $3 value menu. If they can get a better deal at a different fast-food chain, they will ditch McDonald's to save a few dollars.

Meanwhile, a different subset of shoppers is drawn to McDonald's because they want higher-quality food that they can enjoy and not feel guilty consuming. McDonald's has tried to win over these customers with things such as antibiotics-free chicken, upscale espresso drinks, and, of course, fresh-beef Quarter Pounders.

To grow sales, McDonald's needs to win over both groups of customers — who have completely different and opposing needs.

"When you have 30 million people a day coming into McDonald's in the US, you serve a lot of people," Kempczinski said.

"Certainly there's a few different segments that we try to focus on," he continued, "and there are areas that we try to make sure we win. But we serve ... a broad cross-section of the country. So, we have to appeal to a wide variety of people."