Anduril Industries co-founder Palmer Luckey has launched a blistering response at former Taco Bell CEO Greg Creed after the latter criticized McDonald’s Corp (NYSE:MCD) growing push into specialty beverages and its partnership with Red Bull.
Palmer Luckey Pushes Back on Criticism
Last week, Creed, who previously led Yum! Brands Inc. (NYSE:YUM), argued that McDonald’s new lineup of Refreshers and the Red Bull Dragonberry Energizer could create unnecessary operational complexity while failing to give the restaurant chain a distinctive beverage identity.
"I get that beverages are hot right now and they are definitely very profitable," Creed said in a post on LinkedIn, while questioning what was uniquely McDonald’s about the new drinks.
Luckey pushed back sharply, calling Creed a "bitter, used-up old man" who takes shots at people still building things.
"He used to live down the street from me," Luckey said, adding that Creed was upset about Luckey hosting President Donald Trump at his home. "What a loser," he added.
Why Palmer Luckey Says McDonald’s Is Making Sense
Luckey argued that McDonald’s isn’t trying to create an entirely new beverage category. Instead, the company is attempting to capitalize on an established trend that consumers already understand.
He pointed to similar offerings from Starbucks Corporation (NASDAQ:SBUX), Taco Bell, Sonic, Panera and Jack in the Box, saying consumers already know what a "Refresher" represents.
"McDonald’s is explicitly trying to ride this fruit+caffeine fad," Luckey said, arguing that creating a new McDonald’s-specific term would force the company to educate customers unnecessarily.
McDonald’s Beverage Push Comes Under Pressure
The dispute comes as McDonald’s looks to boost customer traffic through value deals and new beverages.
The company posted just a 0.8% increase in U.S. comparable sales in the second quarter, compared with an 8.5% gain at Burger King. Restaurant Brands International Inc. (NYSE:QSR) owns Burger King.
McDonald’s has also acknowledged that its 10-items-under-$3 promotion failed to meet expectations, citing inconsistent execution.
"As we look at actually what happened in the quarter, the 10 items for under $3 has not delivered against our expectations," the CEO stated during the earnings call.
The chain launched its Red Bull Dragonberry Energizer nationwide on Aug. 17.
Price Action: McDonald’s closed at $265.53 on Monday, down 2.66%. The stock was trading at $265.98 in after-hours trading, up 0.17%, according to Benzinga Pro.
Benzinga Edge places McDonald’s stock in the 69th percentile for Growth, while its short-, medium- and long-term price trends remain negative.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Sombat Muycheen / Shutterstock.com
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