McDonald's - University Of Florida

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McDonald’s 5/12/15

Perspectives on Production Sustainability, Production, and Products Ernie Meier Director of Quality System McDonalds US

Introduction

Ray Kroc “Be a good citizen. Have a real sense of community. Be involved in the life and spirit of the community you serve.”

McDonald’s U.S. 14000 Restaurants 3,100 Owner-Operators Multi-Generational 80% Franchise Owned

Our Business The 3-legged Stool Suppliers Owner/Operators Employees

McDonald’s U.S. Supply Chain Strategic Supply Quality Systems Field Supply Chain

McDonald’s U.S. Supply Chain Farm Supplier Distributor Restaurant Customer

McDonald’s Supply Chain Model is One-of-a-Kind Committed to partnering with suppliers and owner/operators to deliver the highest quality products at the best value. Food Safety & Quality Sustainability Animal Health & Welfare Strategic sourcing Supplier partnership & investment Distribution Risk management

How is McDonald’s Supply Chain Different? We cultivate strategic, long-term relationships giving our suppliers a heightened sense of belonging and commitment. We focus on strategic suppliers whose products or services significantly impact the consumer experience, food quality, cost of goods sold, and brand protection.

McDonald's U.S Restaurants Purchases . 780 MILLION pounds of beef 510 MILLION pounds of chicken 1.4 BILLION pounds of potatoes 235 MILLION pounds of cheese 160 MILLION dozen eggs 32 MILLION pounds of tomatoes 41 MILLION pounds of apples 52 MILLION pounds of coffee

Globally 5 - Billion Dollar Brands 2011 Annual Sales (Billions) Source: McDonald’s Internal Sales 2011 extrapolated to estimate WW Sales; Note: total sales for these products from internal database were adjusted to remove Fry/Drink portion of EVM sales and assumes discount of 20% on EVMs

US Beef Supply Chain

McDonald’s Impact on Florida

McDonald’s Beef Impact Rank State Pounds Percent of Supply 1 NEBRASKA 116,300,719 21.58% 2 TEXAS 110,274,920 20.46% 3 KANSAS 94,320,465 17.50% 4 COLORADO 79,459,216 14.74% 5 MINNESOTA 36,962,087 6.86% 6 CALIFORNIA 35,720,730 6.63% 7 FLORIDA 17,544,097 3.25% 8 ARIZONA 16,692,115 3.10% 9 WISCONSIN 12,962,924 2.40% 10 WASHINGTON 8,307,220 1.54% 11 MICHIGAN 4,486,444 0.83% 12 PENNSYLVANIA 2,359,982 0.44% 13 UTAH 2,125,975 0.39% 14 GEORGIA 1,503,512 0.28%

QPC Bun 10% Pickles 1% Ketchup 2% Mustard 0% Onions 2% Beef 69% Cheese 11%

Agriculture Today Percentage of Population Involved in Farming Agriculture Today Percentage of Population Involved in Farming 90% 100% 90% 30% 2% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1810 1810 1910 1910 2010 2010

What does McDonald's do when the cows have wounds on them? What do you mean by 100% beef? Are your cattle corn fed or grass fed? Does McDonald's allow hormones to be used in raising the cattle? What can you say about all the negative allegations about the meat at McDonald's? Is any of it true? What can you tell me about your corporate structure and who is responsible for observing the agricultural department of McDonald's? ASHLEY High School Student Does McDonald's view their cattle as dollar signs or actual animals?

Societal Concerns

Corp orate Citiz enshi p/ Socia l Resp Bra onsib ilitynd Goo d Food , Goo d Peop le, Goo d Neig hbor Bra nd Am Cre biti ati on ng Sha red Val ue WHAT WE’RE TALKING ABOUT IS SUSTAINABILITY Tr ust

LEVERAGE OUR UNIQUE STRENGTHS & EDUCATE 29M Customers Daily 700,000 Employees Touchpoints 14,000 Restaurants 1.5B Beef Supply Chain

US Sustainability Interviews Sustainability 100% Vendors have sustainable practices. 60% Pounds sourced from Vendors with documented sustainability plans and goals. Animal Welfare 100% Vendors have annual 3rd party animal welfare audits. 93% Pounds sourced from Vendors that have PAACO certified auditor resource.

McDonald's U.S. Supply Chain shutterstock_8135944 255267s 260679s Farm Supplier Distributor Restaurant Customer. McDonald's Supply Chain Model . Risk management. How is McDonald's Supply Chain Different? We cultivate strategic, long-term relationships giving our suppliers a

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