2/28/2005

MacDonald's Produce

The MacDonald's franchise has had a major effect on the beef-raising and the potato-growing industries for quite some time. One might not think so from one view point because it only consumes about 4.1 % of the beef and 2.2% of the potatoes grown. It's because of their picky specifications and standards as to exactly what kind of beef and what kind of potatoes that have such a huge effect on the market. With the new health kick especially around the U.S., MacDonald's has taken a big step into the fresh produce market and plans on buying hundreds of millions of pounds in this area. The company plans on buying 135 million apples during this year alone (making it the #1 apple buyer in the world). As far as lettuce goes, the plan is 116 million pounds along with 50 million pounds of grape tomatoes http://www.oligopolywatch.com/. The prediction is that small farmers will still be overlooked being as that MacDonald's is likely to reduce the suppliers to only a few and will certainly demand for more standardization. Will the rest of the fast food market follow? Will America become more healthy with all of these food alternatives? Certainly demand is going up.

6 comments:

Jim said...

Interesting comment about McDonnalds trying to become a healthy fast food establishment. Or, is McDonnalds buying so many apples for their sugar loaded apple pies? Also, most of the tomatoes that McDonnalds is buying are for the sandwiches, along with most of the lettuce as well. So, is McDonnalds really looking to be more healthy?

Jane said...

Fast food chains are looking to be more healty and will continue to do so as long as there is a demand for it and lawsuits against them continue.

Of course MacDonalds' trend will be followed by other fast food chains if it looks to be profitable.

"Will America become more healthly ... ?" I doubt it. There are constantly fads that come and go with the food industry, and this "health craze" probably wouldn't have started in the first place if lawsuit happy people and lawyers hadn't decided that fast food chains and their impact on obesity was a profitable little niche.

When Taco Bell recently did a study on a new taco, thinking that the market would be looking for a "healthy" alternative, they found that their sample group wanted an artery clogging three cheese 'indulgent' burrito.

Of course, I could be wrong, but I think a large amount of us still order our Big Macs and fries and will continue to do so.

heather said...

I have gotten bored with people blaming McDonalds for making people fat (see "Supersize Me"). Is it really McDonalds responsibility to govern what people eat? Are they really to blame for people having a lack of self control? McDonalds offers enough healthy alternatives for those who want them.

heather said...
This comment has been removed by a blog administrator.
salty said...

America is just in a fad right now. We realize that we are the fattest nation out there and want to do something about it for the short-term. Will this craze last in the long-run? No. Once the lawsuits get under control and the news has exhausted all of its stories, this fad will be a thing of the past.

Dr. Tufte said...

-1 on Jim's comment for spelling errors.

I'm not sure this will have much effect on small producers. What McDonald's is really looking for is consistency of produce, and there is no reason that small producers can't do that if they want to.

I admit that a lot of this is a fad effect, but you will see a lot more produce at places like McDonald's in the future. The reason is that the technology to provide produce in a fast food environment has not been available until recently. Bagged salads are easier technologically, and they only go back about 10 years.

BTW: since grape tomatoes were brought up, did you know that they are illegal in Europe? This is because they are an American hybrid that the Europeans don't want introduced into their market because it will impact their tomato growers.