McDonald’s Ensures Access to Food For Millions During COVID-19
July 17, 2020
Ray V. | Director, Strategic Sourcing US Supply Chain | USA
Every day in over 100 countries around the world, my colleagues in US and global supply chain and I work with our suppliers to source beef, chicken, pork, fish, produce and other ingredients from hundreds of local and global suppliers. Over decades we have developed strong, trusted supplier relationships that represent the very foundation of McDonald’s business – and make it possible for us to reliably feed millions of customers the world over.
COVID-19 threatened that foundation like never before.
No industry was spared from the effects of coronavirus, but the food industry had a unique set of challenges to overcome, many of which we are still navigating today. When the pandemic first arrived in the U.S., there were inventory surpluses as our customers were following stay-at-home regulations. Then, we saw beef industry capacity decrease to around 50%, as production facilities began to close and people began to fall ill with COVID-19. Simultaneously, demand from customers began to normalize, which threatened to create shortages of ingredients in our restaurants. These rapid swings between surplus and potential shortfall created new challenges to matching supply to consumer demand.
In our restaurants, as news of industry shortages was spreading throughout the country, managers were ordering a little extra food as backup to ensure their ability to serve local customers. In a system as large as ours, if everyone decided to order an extra case or two, it could further exacerbate the risk that we would eventually run out.
In our communities, school closures and rising unemployment meant that food insecurity was becoming an even bigger concern and it became critical to balance supply and demand so that we could do our part to feed communities and donate bulk ingredients and meals to those most in need.
As the world was reeling from the effects of the COVID-19 pandemic, our most critical task was to ensure that we were protecting the health and safety of those in our restaurants and our global supply chain. So we started implementing new procedures and provided suppliers guidance to keep workers safe.
Amidst massive industry supply chain volatility, McDonald’s ensured there were no breaks anywhere in the world.
How did we do it? We relied on the relationships within our supply chain that we have fostered over many years. There are many levers we can pull in order to maintain control of our inventory and assure supply for our customers. For example, we moved quickly to further diversify our beef supply chain in the U.S. by adding new local suppliers and sourcing additional product globally where needed. To ensure that some U.S. restaurants didn’t have too much food while others didn’t have enough, we temporarily controlled allocation of certain items to ensure food was distributed appropriately across our restaurants. In addition, we worked with our suppliers to monitor total available beef supply so that we could quickly replenish in advance of shortages.
We are taking lessons from this crisis and adapting for the future.
As a supply chain we are constantly planning for natural disasters, facility closures in one part of the country, and making contingencies to divert supply from one area to another in times of crisis. A less likely scenario, was the onset of a global pandemic that would threaten the operation of food systems throughout the world. We are constantly learning and evolving as this pandemic continues to impact our food system.
We know the decisions we make now will define us for years to come, and we’re committed to meeting consumer demand responsibly. We are looking at even more ways to diversify our sourcing and buy locally more often. We will continue to work with farmers, ranchers and producers to help identify and elevate practices that lead to positive environmental outcomes, support long-term farmer viability and meet the needs of our customers. Our sustainability work is critical to McDonald’s success but also the health and resilience of all businesses across our supply chain.
Throughout this pandemic, McDonald’s has been able to stave off breaks, donate millions of pounds of food to families in need, and safely feed our communities including healthcare workers and first responders. We are leaning into the strength and agility of our supply chain to continue to feed millions of people in communities around the world.