“Beef is at the core of what we do past, present and future,” says Bob Langert, vice-president of global sustainability for McDonald’s Corporation. “We want the beef industry and McDonald’s to prosper as a result of ensuring that beef is sustainable long-term.”
This has been true since founder Ray Kroc opened the first McDonald’s restaurant in 1955. So has focusing on customers as the primary driver of its business.
Both are reasons why McDonald’s announced in January that it wants to begin buying verified sustainable beef in 2016.
Customers are different today
“Consumer demands have changed,” Langert says. “I’d like for everyone in agriculture to think long and hard about today’s consumer. They have an extraordinary interest about where their food comes from and how it was produced.”
Though the trend began 25 years ago, Langert says it gained a head of steam in the past 7 to 8 years. All told, he says consumers’ desire to know more about the food they eat and the global impact of food production is one of the most extraordinary consumer trends he’s witnessed during his professional career.
Sign up now for BEEF Daily and get all the latest hot topics straight to your inbox!
“Consumers really want to know where their food comes from, how it’s grown and raised, who the people are that produced it, if the environment was handled well, and whether or not the animals were treated with respect,” Langert says.
Customers today tell McDonald’s they want to purchase sustainable products.
“This is not a risk management strategy or a marketing ploy,” Langert says of the company’s decision to move toward source-verified sustainable beef. Neither is McDonald’s trying to placate one activist group or another. This is, after all, a company portrayed by various activist groups since the mid-1980s as the poster child for everything wrong with the world.
Instead, Langert emphasizes the move is a business strategy.
Keep in mind that McDonald’s has long operated with the belief that giving back and doing good for the communities in which it operates is also good for their business.
Also, understand that McDonald’s believes the story of American agriculture in general, and the story surrounding the U.S. beef value chain specifically, is one of indescribable success.
“I think the system we have now is phenomenal. Sometimes, I think it is a miracle that we can serve 70 million customers every day,” Langert says. “We at McDonald’s thank everyone in food and agriculture for having such a system.”
But, Langert adds, “The customer is reshaping their expectations of companies like McDonald’s. They want to know and have proof points about where their food comes from, that people are being treated well, along with the environment and the animals.”
Customers are willing to let others define sustainability for them. However, they want to know beef is sustainable, according to a specific definition that makes sense to them, proven by sensible measures, verified by a credible third party.
“We have to be adaptive to where the customers are going. Our work is not motivated out of an elite group of people we want to satisfy who are defining sustainability very narrowly,” Langert explains. “We see sustainability as something appealing to the masses, to all consumers.
“Sustainability should be mainstream; it’s not niche, it’s not premium. The customer wants it and wants to do business with companies that share their values. They want to see companies like ours and those of our suppliers also doing things with a sense of purpose, that we’re not in business just to make money but we’re here to serve them with food that is safe, affordable, high quality and now sustainable for our customers,” he says.
Most beef may already be sustainable
“Sometimes, I think we’re already buying sustainable beef,” Langert emphasizes. “The fact is, though, we can’t just say it and we can’t just tell stories; we have to prove it. So, let’s get on board together and prove it and sell more beef.”
Since McDonald’s announcement in January, plenty of beef industry speculation has revolved around what exactly McDonald’s means by sustainable.
Ask Langert and he’ll tell you that McDonalds’ doesn’t know. He’ll also tell you, though McDonald’s buys 2% of all beef produced globally each year, the chain isn’t big enough to demand beef that complies with sustainability defined by McDonald’s alone.
“We know that we’re one spoke in the wheel. We need the entire value chain to help define what sustainable beef is; what are going to be the principles, criteria and indicators. We want to do it in a way that we collaborate, not mandate,” Langert stresses. “We’re relying on the Global Roundtable for Sustainable Beef (GRSB) and all the stakeholders in the value chain to scientifically and rationally develop these principles so that we can begin buying sustainable beef in 2016.”
McDonalds is a founding member of GRSB, which began in 2011. That organization plans to release for public comment guiding principles for defining sustainable beef.
“We’re starting out from a foundation of strength, so let’s build on this and build in sustainability,” Langert says.
The sustainability vision
Although McDonald’s is working with others in the value chain to define beef sustainability, its vision for sustainable supply chains has been defined for a long time: “McDonald’s vision for a sustainable supply is a supply chain that profitably yields high-quality products without supply interruption, while leveraging its leadership position to improve the ethical, environmental and economic impact of doing business with McDonald’s,” Langert says.
He emphasizes that McDonald’s focuses on mainstream consumers. When he talks about sustainability and its ultimate value chain definition, he isn’t arguing for or against niche products and markets like locally grown, organic or GMO-free. But, he explains, “That doesn’t get us where we need to go. The definition needs to be holistic and account for people, the environment, food safety, animal welfare and economics. It’s multi-faceted.”
McDonald’s understands that any definition of sustainability that makes business economically untenable for its supplies means the same reality for its own company. For much of its history, a guiding McDonald’s philosophy has been: “We’ll be successful if our company does well, our owner-operators do well, and our suppliers do well.” The success of each is interdependent.
Incidentally, McDonald’s four growth platforms, in no particular order, are: beef, breakfast, poultry and beverages.
“We all need to do this in a way that is profitable and economic for our business model and for our suppliers’ business model,” Langert says. “Just thinking or saying you’re sustainable isn’t good enough; you have to have evidence points. It’s not just saying, ‘trust us,’ it’s proving it. Sustainability should be a mainstream part of our business and what we do.”
Some fast facts about McDonald’s
• Globally, McDonald’s restaurants serve 70 million customers/day.
• A total of 1.8 million people work for McDonald’s.
• There are 35,000 McDonald’s restaurants in 120 countries.
• There are 14,000 McDonald’s restaurants in the U.S., and more than 5,000 independent restaurant owners.
• McDonald’s buys 2% of all beef produced each year globally.
• Five of McDonald’s burgers are billion-dollar brands (meaning sales of each surpass $1 billion/year).
You might also like: