McDonalds touts ties to its Oregon suppliers
 
 
November 12, 2004
 
By Amy Grennell, freelance writer
 
Capital Press Agriculture Weekly
 
P.O. Box 2048
 
Salem, Oregon 97308
 
800-882-6789
 
To submit a Letter to the Editor: rleidahl@capitalpress.com

Supporting Northwest products has been important to many companies, but after McDonald’s looked into where its food products were coming from, the world’s largest restaurant company decided to tout its support of local agricultural products as well.

The closer look at agricultural products the restaurant chain purchased came after a 2003 economic impact study by Dennis Tootelian, professor of marketing at the University of California at Sacramento. He studied the economic impact of McDonald’s in the Northwest.

Tootelian’s research measured traditional economic factors such as the jobs, wages and taxes the company generates, but it also analyzed the added value or the “multiplier effect” that the business has within its supplier chain, like farm and industrial products, as well as investments in new technology.

The company then conducted its own agricultural food product studies among its purchasing departments.

Larry Stewart, regional purchasing manager for McDonald’s from Alaska to Northern California and Hawaii, Montana and Idaho, said the company began looking into how much it was buying from which states about two years ago. Oregon was the first state to be studied.

The company was interested in the results in dollar amounts as well as poundage.

“It astounded me; we buy $1.3 million in pickles from Oregon,” Stewart said.

McDonald’s also buys french fries from the J.R. Simplot Co. of Idaho. Simplot is one of the world’s largest frozen-potato processors, annually turning out 3 billion pounds of french fries and other potato products worldwide.

The corporation buys 320 million pounds of potatoes from Oregon, and many of the products go throughout the world.

Japanese customers are most likely eating french fries from Idaho and Oregon, Stewart said.

Agricultural studies were then conducted for Washington, Montana and Idaho, but have not yet been analyzed or released.

The Oregon agricultural products study was part of the company’s “Communities Grow with McDonald’s” campaign that includes its economic, agricultural, educational and charitable contributions to communities nationwide.

Oregon was the first state to use the information in a new print advertising campaign. The current ad features Joe Eder, a cucumber grower from Mount Angel, Oregon, who grows for Dean Specialty Foods, a supplier of McDonald’s pickles. The ad touts McDonald’s purchase of more than 320 million potatoes from Oregon farms.

According to Julie Edwards of Davis Elen Advertising & Public Relations, this is a new approach for McDonald’s. The firm handles public relations and advertising for McDonald’s in Oregon and Southwest Washington.

“This is the first time they've decided to get factual information,” Edwards said about the study and its use in advertising. She said many consumers have a misconception about the corporation, but stressed it supports communities and all the restaurants are locally owned.

Already there has been interest from other regions in doing advertising with the agricultural component as the focus.

“The idea has taken off and there’s a lot of interest in the study,” Stewart said.

Edwards said Idaho is interested in running ads following Oregon’s lead. The current Oregon print ad will run through this year, with another print ad possibly to run in 2005.

Though not every item at a McDonald’s restaurant in Oregon is Northwest-acquired, the company has developed key relationships with Northwest suppliers.

“We are very loyal to our suppliers, and they are loyal to us,” Stewart said. “From a business standpoint we want the best price, but we want to keep dollars in the local economy.

“We would love consumers to know the bun is made outside Seattle, the pickle more than likely came from Mount Angel and the ketchup came from California. It isn't being trucked in from New Jersey.”

In the Portland metro area, McDonald’s Coke products are from Portland, Tillamook ice cream is offered and the onions are grown in the Walla Walla, Washington, region.

“There are a lot of growers that are happy about McDonald’s,” Stewart said. “We don't toot our horn, but we try to do the right thing.”

BUYING OREGON

Annually McDonald’s purchases from Oregon …

• 1.6 million pounds of onions

• 4.5 million pounds of cucumbers

• 22,986 pounds of sweet potatoes

• 243,840 pounds of pumpkins

• 4,000 pounds of Tillamook cheese

• 320 million pounds of potatoes

• 16.5 million pounds of Northwest apples*

*From Oregon and Washington

Information from McDonald’s 2003 study
 
Copyright 2004, Capital Press Agriculture Weekly.
 
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