Staff Writer
PRESQUE ISLE – Maine potato growers are doing something right in the eyes of McDonald’s.
At last Thursday night’s Agricultural Bargaining Council’s annual dinner and meeting, Mitch Smith, McDonald’s U.S. director of quality systems, told growers and dealers that the East was the highest rated production area last year.
“Of growers in the East, Midwest, and West, last year you were the highest rated area for McDonald’s USA,” said Smith, “so you should give yourselves a hand. I know that comes after an historical point where we struggled a lot on this side of the country, so whatever you’re doing, you’re doing the right thing and you’re to be commended.
“Right now, the Northeast – for both specific gravities and for size – are very comparable to the West,” he said. “You’re doing a darn good job, and are beating the Midwest by quite a bit. You’re doing a great job controlling inputs to achieve higher ranges.”
Smith said that quality, service, cleanliness and value “are at the heart of our principles.”
“They’re all key in keeping our customers coming back,” he said.
“We have a very strong supply chain and that’s because of our supplier base, which is something we cherish. It’s a key part of what we do, and it’s how we do business,” said Smith, giving a special nod to McCain Foods in Easton. “Having a strong supply chain allows us to be more flexible, more responsive, more innovative, and better aligned with our goals. We want to make sure our goals and objectives line up with those of our suppliers.”
Smith said McDonald’s approaches its supply base with the “3-legged stool principle.”
“The 3-legged stool is made up of our suppliers, our corporation and our owner/operators,” he said. “If any one of those legs is not healthy or not equal, then the stool falls down. The key thing in our whole approach to suppliers is partnership. I can’t emphasize that enough.”
Smith told the growers and dealers in attendance that while McDonald’s sales started to stagnate from 1998 to 2002, sales have since turned around and continue to grow.
“At this point in time, sales are $57 billion globally, and the U.S. accounts for about one-third of that,” he said. “In restaurant numbers, we’ve been relatively stable only growing about 100 to 200 stores a year for the last five or six years. We’re actually growing our sales by growing our store numbers. We had to get better, not bigger.
“Our growth has been realized for a number of reasons,” said Smith. “A lot of it has to do with upgrades in terms of global décor and landscaping, as well as a different, fresher, tastier and hotter product.”
Despite overall sales growth, french fry sales have been going down.
“It’s not just us,” Smith said. “We’re down about 1 percent in terms of total count, while the industry itself has seen about a 3 percent decrease over the last three or four years. There are several reasons why we think this is occurring; one that we know we have to look at is our advertising and how we approach our marketing. There are different menu items that we’re serving now [snack wraps, apple dippers, etc.] that are subtracting or maybe cannibalizing some of that, as well.
“In addition, consumers are more cognizant of diets and calorie intake,” he said. “There are a lot of choices being made not to eat french fries along with a sandwich. In our business, we also had to make some choices as to what went on our value meal, and when you start serving a small fry versus a medium fry, you do have an impact on overall quantities that you’re selling. The good news is McDonald’s is never going to abandon french fries. French fries are our icon … our brand. We feel and know that people come to McDonald’s because of our Mac fries.”
Smith said it’s important for McDonald’s to continue to use healthier oils so consumers “will feel less guilty about what they eat.”
“We need to continue to develop varieties that have higher Vitamin C content, higher fiber, etc.,” he said, “and we’ll continue to work with the industry on this. We’ll also continue to look at marketing, and look at other potato items like our new potato vegetable blend that goes into our breakfast burrito. All those things are important.”
Recognizing that at one time McDonald’s only used Russet Burbanks, Smith said the company now uses four varieties.
“We will be very open minded to looking at better yielding, less sugar developing, less susceptible varieties in the future,” he said.
Smith thanked the growers for their hard work in supplying quality spuds.
“I’d like to thank you as growers … those folks who supply our processors because without you, we can’t do it,” he said. “Thank you very much for all you do, and please be assured that we have no intention of not supporting our world famous french fries.”
During the annual meeting, outgoing ABC president Trevor Michaud noted that change is good.
“We’ve changed a lot of things including our negotiating team,” he said. “We have to change with the industry.”
Michaud thanked Aroostook County’s processing growers who “rose to the occasion” regarding the GAP certification program.
“I believe we have 100 percent certification in the GAP program,” he said, “which is great.”
It’s ABC’s goal, Michaud said, to preserve quality.
“When your increased costs get to the point that what you’re getting isn’t covering what you’re putting into it, things need to be addressed. With the world market the way it is, fertilizer really jumped and it’s not something that we have built into our negotiations. We try to make the right decisions for the best crop. We can’t do it for nothing, but we’ll do everything we can to get what we can for it.”
New ABC president Greg Schools said he’s looking forward to working with industry members in his new role.
“We’d like to invite people who are not members of the ABC to check us out, or revisit us. We are changing and are adapting, and we want everyone to give us a look,” said Schools. “I look forward with not only working with our board of directors, but also our processors and the rest of the industry leaders. Our goal is to strengthen our leg of the stool.”
Vern DeLong, executive director of the ABC, encouraged growers to explore planting rotation crops.
“This year, of any year I can remember, I invite you as growers, who are managers of your operations, to take a serious look at what your opportunities are this year,” said DeLong. “Rotation crops … we always considered them a necessary evil … but as you look at the opportunity, it can become a cash crop.
“I’m not hung up on which rotation crop you want to talk about. You can talk about oats, you can talk about barley, you can talk about canola, you can talk about soybeans. Those all can be grown here successfully, and the market is at record highs for some of those products,” he said. “I invite you to take a serious look at this. It’s a cash crop. Canola today is selling for approximately $600 a ton, while soybeans are selling for $12.60 per bushel. Don’t just plant potatoes because it’s something you always did after you got your commitments filled; take a look at what your alternatives are.”
DeLong said this was his last ABC annual dinner/meeting as executive director.
“My retirement is June 30,” he said. “It is fact; written in stone. The board of directors has agreed that I will oversee the canola and soybean program on a part-time basis. It’s been a pleasure working for ABC for 17 years. I leave with mixed feelings, but the time has come, but I know I’ll be leaving this organization in good hands.”
Before wrapping up the 2008 meeting, DeLong presented a plaque to longtime ABC supporter Darrell Chandler.
“He has been involved with ABC for as long as I can remember,” said DeLong. “I don’t know any man who has given more of his time and money, and traveled more miles for ABC than this gentleman.
“The plaque says, ‘Presented to Darrell Chandler in recognition of unselfish service in time and money to ABC over the last 30-plus years,’” DeLong said.
Chandler humbly accepted the plaque, but declined to offer remarks.
