Fresh-minded McDonald’s

by Joel Crews
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McD burger
McDonald's is on schedule to shift its supply chain to offer fresh, never-frozen Quarter Pounders by 2018.
 
Oak Brook, Illinois-based McDonald’s Corp.’s announcement in late March that it plans to transition to fresh versus frozen beef patties to make its Quarter Pounders, has suppliers to the QSR giant working behind the scenes to meet its mandated 2018 deadline. By mid-2018, Quarter Pounders, Quarter Pounders with Cheese, Double Quarter Pounders with Cheese, Quarter Pounders with Cheese Deluxe and Signature Crafted Recipe burgers will be made using fresh beef patties.

Lopez Foods Inc., based in Oklahoma City, is a longtime beef supplier to the burger giant and was part of test-marketing the shift to fresh beef at McDonald’s.

“This represents a strong partnership between McDonald’s, Lopez Foods and their other beef suppliers to support this initiative and deliver McDonald’s quality standards,” Ed Sanchez, president and CEO of Lopez Foods, said in a statement when the plan was announced earlier this year. “It was exciting to be part of the test and we look forward to bringing fresh beef to more McDonald’s customers in 2018.”

During a conference call with analysts to discuss the company’s Q2 results on July 25, President and CEO Stephen Easterbrook gave some insight into the decision-making process and provided an update on what the conversion means.

Easterbrook said he and CFO Kevin Ozan visited the two test markets to assess whether consumers believed the Quarter Pounder was tastier and juicier using fresh beef.

“So, we had a resounding yes from the consumer on this one,” he said. “…As you can imagine, our patty suppliers have to adjust both the way they prepare and then store and transport the finished product. So, we’re working our way through.”

The decision to convert the rest of the burger offerings to fresh is being considered as adjustments to the fresh-beef supply system also affects in-store operations and labor costs. Ozan noted that investments have been made to ensure smooth execution while readying for the introduction of fresh-beef patties next year.

“There’s a lot of change that has to be absorbed in a restaurant level right now,” Easterbrook said, “which talks to Kevin’s previous point about why we are purposefully investing labor and training and capabilities in our restaurants to have all the technology advances, Experience of the Future adjustments, the enhanced hospitality, all the way to fresh beef. So, it’s a balancing act for us. But the customer will always be our ultimate guide.”

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