Hindsight bias (and McDonald's)

It seems so obvious in retrospect.

There’s a concept in psychology known as “hindsight bias.” It’s the idea that if you ask people if they think they could have predicted the future before it happened, they’ll almost always overestimate the likelihood that they would have gotten it right.

It’s hard to test. But about 50 years ago, researchers came up with a smart experiment. They wrote about it in the journal, Organizational Behavior and Human Performance.

(You’ll like the title: “I Knew It Would Happen: Remembered Probabilities of Once—Future Things.”)

To be clear: This was the early 1970s, and the researchers tested the idea by asking college students just before President Nixon’s 1972 trips to China and Russia to predict the outcome of the visits.

Afterward, they were asked to remember what they’d predicted.

Bottom line: Nearly everyone remembered incorrectly, aligning their recollections more closely what actually did happen.

This is what I thought of when I started thinking deeply -- very deeply -- about the return of Snack Wraps to McDonald’s.

A bright, shiny quarter?

Snack Wraps have apparently been highly successful in the short time since McDonald’s brought them back to the menu in the U.S. after a very long time, to the point where it seems like it was an obvious decision.

But maybe that’s just hindsight bias?

Let’s set the stage. McDonald’s has had a tough two years or so, because customers just haven’t been visiting or buying as much as they used to.

As McDonald’s CEO Chris Kempczinski explained in an earnings call earlier this year:

“McDonald’s can weather these difficult conditions better than most … [but] low- and middle-income consumers, in particular, are being weighed down by the cumulative impact of inflation and heightened anxiety about the economic outlook.”

McDonald’s tried a bunch of things to reverse that trend, most notably the $5 Meal Deal.

That seems like it might have helped — but McDonald’s reportedly only makes 25 cents profit on each Meal Deal it sells.

Besides, in terms of sheer customer excitement, it’s nothing compared to what happened after McDonald’s announced that it was bringing back Snack Wraps.

A brief history of Snack Wraps

Snack Wraps are simple concoctions: breaded chicken tenders, shredded lettuce, ranch sauce, and cheese — all wrapped in a tortilla.

McDonald’s rolled them out for American customers in 2006, and they lasted until 2016, becoming (at least in retrospect) a cult favorite.

Once they disappeared from the menu, McDonald’s customers spent literally a decade trying to bring them back.

There’s a fan Facebook group, of course, and a Change.org campaign with more than 18,900 signatures.

In fact, McDonald’s said on social media that a potential return of the Snack Wrap was its “most requested item of all time.”

“If you ever wonder if your posts here matter, if they have an impact, if we even care, let me tell you something, you and you only with your countless posts and requests and petitions made it happen,” McDonald’s senior marketing director Guillaume Huin posted on social media earlier this year. “You won, Snack Wrap fans. Thank you.”

See what I mean?

In retrospect, obvious—even game-changing.

A lettuce shortage

One of the wild things about living in our current age is that we can track what people do in real life, because we walk around with smartphones in our pockets.

As a result, we can look to geolocation data from a company like Placer.ai that says customer visits have jumped as a result.

Moreover, an analyst that closely tracks McDonald’s called Evercore ISI estimates that in the U.S., same-store sales at McDonald’s have are up 7% so far in the third quarter.

Oh, and they’re apparently so popular that they’ve caused a lettuce shortage at some restaurants, according to an internal memo.

“After nine years of pent-up demand, fans showed up in full force to celebrate the return of the Snack Wrap,” McDonald’s told Fox Business. “We’ve been blown away by the response, from packed restaurants with lines out the door to nonstop social buzz.”

Great news for McDonald’s.

But seriously: Why didn’t they do this months or even years ago?

A headache

Actually, it turns out there were some really good reasons:

First, while Snack Wraps are fairly simple, they were a “headache” to put together in a McDonald’s kitchen. This, from Bloomberg back then: “Wraps were time-consuming for workers to assemble and they never took off with many customers, said Jack Russo, an analyst at Edward Jones.

Second, McDonald’s marketed Snack Wraps as a healthier snack option — but back in the aughts and the 2010s, customers just weren’t into those ideas as much as they might be today.

Third, and this is the kicker: They just didn’t sell that well among McDonald’s core target customer demographic at the time — Millennials.

Of course, that was then. This is now.

‘Just throwing this out there …’

It almost seems customers remembered themselves loving Snack Wraps more than they actually did — thus sparking a social media maelstrom, which led McDonald’s to consider giving them another try.

McDonald’s didn’t reply when I asked for comment or more context, but you can almost imagine them coming up in some kind of “no bad ideas, people!” brainstorming session at McDonald’s headquarters in Chicago’s West Loop:

“Just throwing this out there … Millennials didn’t buy them during the Obama administration, but Millennials are 10 years older today. Plus, we’re targeting Gen Z, so maybe they’d be more into them?”

Next thing you know?

Snack Wraps are back, geolocation data tells a tale, and the whole thing looks inevitable in retrospect.

Not for the first time, I end with the conclusion there's a fascinating story and a practical business lesson to learn from McDonald’s.

I'll bet you knew that would happen.

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7 other things worth knowing

• The family of Epstein victim Virginia Roberts Giuffre say they're "outraged" that the Trump Justice Department released transcripts from convicted sex trafficker Ghislaine Maxwell’s jailhouse interview. "During [Deputy Attorney General] Todd Blanche’s bizarre interview, she is never challenged about her court-proven lies, providing her a platform to rewrite history," the family of said. President Trump has not ruled out pardoning Maxwell or commuting her 20-year prison sentence. (NBC)

• In an "abrupt reversal," Trump indicated Monday he was leaning against deploying federal forces to fight crime in Chicago. Trump had said Friday that he planned to replicate his DC crime crackdown in the Windy City, followed by New York City — only to be met with local pushback. (New York Post)

• Struggling after 23 months of war, the Israeli army is looking to recruit members of the Jewish diaspora in the U.S. and France, along with the Orthodox community and even former deserters, who have been offered a one-time amnesty if they sign up. (France24)

• Thousands of people will paint a town red with tomato pulp Wednesday, flinging the fruit at one another in the 80th anniversary of Spain’s famous “Tomatina” tomato street fight. The hourlong event, inspired by a 1945 food fight, brings 120 tons of overripe tomatoes to the eastern town of Buñol, where tarp-covered buildings flank a crowd of up to 22,000 participants awaiting their ammo. “When it’s going on, it’s just a blur of tomatoes,” said Adrian Columb of Ireland, who attended in 1999. “It was a blast.” (AP)

• Cute and adorable Welsh corgis, widely known for their association with the British royal family, are in fact a breed of passionate racers. That’s at least according to the 120 teams from around Europe taking part in the Corgi Race Vilnius, in Lithuania. Thousands of Lithuanians gathered in the capital’s largest park on Saturday and Sunday to watch the events — a solo sprint, a contest for the “mightiest voice,” costume challenges, and group racing. (AP)

• In a box office twist, a film from the theatrical-averse Netflix appears to be No. 1 on North American charts. “Kpop Demon Hunters,“ sing-along version of the hit animated musical, is estimated to have earned $18 million to $20 million on Saturday and Sunday. It's also the second-most watched film ever on the platform while three of the film’s original tunes — “Golden,” “Your Idol” and “Soda Pop” — are currently in the top 10 of Billboard’s Hot 100 chart. (Variety)

• For centuries, getting a drink in Britain has meant going straight to the bar, finding a gap and making eye contact with the bartender. But now, more people are now ordering their pints from single-file lines, and it’s driving pub purists to distraction. (WSJ)

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Thanks for reading. Photo by Jurij Kenda on Unsplash. I wrote about some of this before at Inc.com. See you in the comments.