My radical plan for McDonald’s

1272056932627So I like McDonald’s. Really, I do. The fries. The coffee. Even the (850 calorie for a large!) strawberry McCafe Shake. The clean bathrooms, too. It’s my default place to stop when driving more than a few hours.

I also like the people I know who work at McDonald’s. Bob Langert, the company’s sustainability chief, is a great guy. Their PR folk are unfailingly gracious. And I’m told by a friend of the CEO, Don Thompson, that he’s a terrific person, too.

But–and you knew there was a “but,” didn’t you?–McDonald’s has a big problem. Actually, a couple.

The company wants to sell the world as many hamburgers as it possibly can. Beef, when produced at an industrial scale, is a terribly inefficient way to deliver protein to people. The production of beef requires more water and more land, and generates more greenhouse gas emissions, than the production of chicken or pork or, goodness knows, vegetable protein. Maybe the easiest way for any of us to do our part to deal with the climate crisis is to eat less beef. So long as McDonald’s is pushing burgers, it is, in effect, pushing climate change and deforestation, not to mention obesity and heart disease, at least for those consumers who do want the company wants them to do and eat more burgers. McDonald’s response to this is to join in the Global Coalition for Sustainable Beef–a laudable idea, and one that could reduce the environmental impacts of beef. But I’m skeptical about how far and how fast coalitions like this will take us. (See my 2012 story for YaleEnvironment360, Should Environmentalists Just Say No To Eating Beef?) The evidence, when you look at similar efforts to produce “sustainable” palm oil or fish, is decidedly mixed.

Then there’s the inequality problem, which is all over the news lately, and for good reason. CEO Thompson made $13 million or so in 2012. The front-line McDonald’s worker makes less than $20,000 a year. Many rely on government assistance to get by. I don’t begrudge Thompson his paycheck, but something’s amiss when the people who work for him need help from the government to feed their families.

What should McDonald’s do? I tried to address that question in a story today for Guardian Sustainable Business.

Here’s how it begins:

Promoting its Dollar Menu and More, McDonald’s says: “An empty stomach shouldn’t mean emptying your wallet, too.” A Bacon McDouble – beef patties topped with bacon, American cheese, pickles and onions – costs just $2. A bargain, no?

Alas, the price of a burger does not reflect its full cost. The environmental impact of beef is staggering: on average, 6.5 kilograms of grain, 36 kilograms of roughage and 15,500 cubic meters of water are required to produce one kilogram of beef, according to the new Meat Atlas from the Heinrich Boll Foundation, an environmental non-profit. What’s more, beef generates more greenhouse gas emissions than cheese, pork, turkey, chicken, eggs or vegetable protein.

Then there are the costs of supporting those who cook and serve burgers: More than half (52%) of the families of front-line fast-foodworkers are enrolled in at least one government-funded safety net program, according to a 2013 UC Berkeley Labor Center study titled“Fast Food, Poverty Wages”. The research estimates the industry-wide cost to these programs, very roughly, at about $7bn. Median pay for front-line fast-food workers is about $8.69 per hour, which comes to a bit more than $18,000 per year. And we won’t even consider the costs of treating the health problems that are caused by consuming too much processed food.

All of which raises a question: how can a company that depends on cheap meat and cheap labor become sustainable, responsible and even admirable?

You’ll have to read the rest of the story to see the full answer, but, in essence, I argue that McDonald’s should do three things.

(1) Nudge its customers to eat less beef.

(2) Raise the wages of its workers, publicly and proudly.

(3) Become an advocate for a price on carbon.

Will this happen? Probably not. Could it happen? I’m curious to know what you think.

Do you want (GMO) fries with that?

 

imgresIt’s a business cliche–the customer is always right–but unlike most cliches, this one is untrue.

I realized that years ago when I was talking with a top executive at Southwest Airlines. Southwest chooses its employees carefully. They are recruited, in large part, for their good character and values, as well as their friendly personalities and desire to serve. So when an airline passenger tangles with a Southwest gate agent or flight attendant, the assumption at headquarters is that the customer is probably wrong. Those customers who are particularly unpleasant or argumentative when dealing with Southwest are politely told that they will never be permitted to fly on the airline again.

I raise this because on the subject of genetically-engineered potatoes, McDonald’s, in all likelihood, will soon find itself caught in an awkward place–between the worries of some of its customers about GMOs and the desires of an important supplier to improve the health of the potato and reduce food waste. That is the topic of today’s column for Guardian Sustainable Business.

Here’s how it begins:

“Do you want fries with that?” Not if they’re made from genetically engineered potatoes, say activists who oppose GMOs.

The advocacy group Food & Water Watch is asking McDonald’s, the world’s biggest buyer of potatoes, not to source a genetically engineered spud that was developed by its biggest supplier, the J.R. Simplot Co.

“This potato is anything but healthy,” writes Wenonah Hauter, the executive director of Food and Water Watch, in a letter (PDF) to Don Thompson, McDonald’s CEO. Altering the plant’s genes, she writes, could unintentionally affect other characteristics of the potato, “with potentially unforeseen consequences for human health”. The letter has been signed by 102,000 people.

Other NGOs, including Friends of the Earth and the Center for Food Safety, also oppose genetically engineered food. The Consumers Unionwants that food labeled. All of them argue that US government regulation of genetically modified crops is inadequate.

This is a problem for McDonald’s – and for anyone who believes that genetic engineering has the potential to increase crop yields, help solve environmental problems or deliver healthier foods.

The interesting thing about the new potato varieties developed by the J.R. Simplot Co., an Idaho-based potato processing giant, is that they are engineered to deliver consumer and environmental benefits, as my story goes on to explain. They are designed to lower levels of acrylamide, a potential carcinogen. And they reduce black spots from bruising, which means fewer potatoes have to be thrown away. Unlike some other GMO crops, which primarily benefitted farmers (not that there’s anything wrong with that), these will benefit people who choose to eat the fries at Mickey D’s.

The GMO debate is complicated, although rarely is it presented that way. See, for example, this page on the Organic Consumer Assn. website, blasting Monsanto with ridiculous headlines like “Monsanto’s GE Seeds Pushing US Agriculture into Bankruptcy.” That will come as a surprise to USDA, which says that the US agriculture sector will enjoy record high income of  $120 billion this year. But I digress. Few people truly understand the science of biotechnology. I certainly don’t. So if we take sides, we do so based mostly based on the opinions of others who we trust. As my story says, the debate

gets emotional very quickly and often comes down to questions of trust. Here the anti-GMO forces have an advantage. They can position themselves as consumer advocates – public interest groups, if you will. By comparison, the companies that favor GMOs are seen as self-interested and lacking credibility. Government regulators also, generally, don’t inspire trust.

No wonder anti-GMO sentiments seem be growing. It’s easy for NGOs to stir up fear, and the record of government regulators–whether we’re talking about USDA, the FDA or the SEC–doesn’t inspire confidence. We should approach new GMO crops with humility and caution, particularly when considering their environmental impact. Like any technology, genetic engineering comes with risks as well as benefits.

But let’s not forget that Americans eat genetically engineered food every day, with no adverse health effects that can be attributed to GMO foods. There’s a broad consensus among mainstream scientists that the GMO crops now on the market are safe to eat.

Consumers may be fearful of GMOs, but that doesn’t make them right.

 

Sustainability at McDonald’s. Really.

coffee-cupHere’s a question. Which trio of companies has done more for the environment…

Patagonia, Starbucks and Chipotle?

Or Walmart, Coca-Cola and McDonald’s?

I don’t have an answer. Patagonia, Starbucks and Chipotle have been path-breaking companies when it comes to sustainability, but Walmart, Coca-Cola and McDonald’s are so much bigger that, despite their glaring flaws, and the fundamental problems with their business models, they will have a greater impact as they get serious about curbing their environmental footprint, and that of their suppliers.

Small and mid-sized companies create sustainability solutions, as a rule, but the impact comes when big global corporations embrace them. Size matters.

All that is by way of introduction to my latest story for Guardian Sustainable Business, about McDonald’s coffee-buying practices and the role of the consumer in driving them to scale.

Here’s how it begins:

Across the US, McDonald’s last week introduced pumpkin spice lattes made with Rainforest Alliance-certified espresso. No such assurance comes with McDonald’s drip coffee. Why? Because consumers haven’t yet shown Mickey D’s that they care.

That’s gradually changing, says Bob Langert, the vice president of sustainability for McDonald’s, and not a moment too soon. As the world’s biggest fast-food chain, which has 34,000 restaurants in 118 countries, seeks to make its supply chain more environmentally friendly, McDonald’s is trying to enlist its customers as allies.

That’s why the pumpkin lattes marketing features the little green frog seal of approval from the Rainforest Alliance. That’s also why McDonald’s fish sandwiches, for the first time, feature a blue ecolabel from the Marine Stewardship Council certifying that the pollock inside comes from better-managed fisheries.

By talking to consumers about its sustainability efforts, McDonald’s hopes to build brand trust and loyalty. Until recently, people had to dig into the company’s website to learn about its environmental performance.

“We’ve had sustainable fish for many years, but we didn’t tell people about it,” Langert told me during lunch in Washington DC. (He ordered fish.) “We feel there’s a tipping point coming. We see the consumer starting to care. Consumer expectations are rising.”

What McDonald’s is doing with its coffee isn’t innovative. Starbucks paved the way. But if McDonald’s, Dunkin’ Donuts, 7-Eleven, Walmart, Costco, Target and others follow, the world’s coffee farmers will be a lot better off.

Meantime, McDonald’s is leading the way as it encourages potato farmers to use fewer pesticides and less fertilizer, as the story goes on to say. And it could potentially have a huge impact as it tackles its most important supply chain–beef.

Elitists will scoff at everything McDonald’s does, of course, and some of their criticisms have merit. A Big Mac, it’s safe to assume, has a big carbon footprint. Eating too much food from Mickey D’s (or anywhere else) makes people fat. I’d like to see fast-food chains pay their workers better, even if that means customers will have to pay more for breakfast or lunch. But on the environment, McDonald’s is moving in the right direction. Just as important, the company is trying to move its customers along, too.

You can read the rest of my Guardian story here.

Why sustainability has to be a team sport

imagesOne of the great virtues of market capitalism is that power is widely dispersed–among consumers, corporate executives, investors and regulators. Lots of people get lots of votes that collectively shape business, and that’s good. But decentralization creates a daunting problem for anyone who cares about corporate sustainability: It’s hard to get things done.

In conversations today at the GreenBiz Forum in New York, people who could be described as powerful—executives with big titles (vice chairman, vice president, CEO) at big institutions (NASDAQ, McDonald’s and Ingram Barge, America’s biggest barge company)–all lamented the limits on their influence over what their companies do, let along how industries can change.

This is why sustainability has to be a team sport. Very few people–or companies–can do much on their own.

Take Bob Langert, vice president for corporate responsibility at McDonald’s, who is one of the most respected sustainability executives in the US. He’s got credibility inside the company and with NGO partners. But to get anything done, he’s got to win over thousands of owner-operators of McDonald’s stores, as well as a a diverse set of suppliers and, in some instances, the tens of millions of people who eat at Mickey D’s every day.

“We are the world’s largest small business,” Langert said. The overwhelming majority of McDonald’s outlets are “owned and operated by independent business people. They have a lot of power in our system. That means we can’t dictate from on high. I challenge people to show me a company that’s more democratic than McDonald’s.” [click to continue…]

The pleasures of slow food

On a biking trip last week through Piedmont, a mostly unspoiled agricultural region in northwest Italy, I came across many things: charming hilltop towns, sleepy sidewalk cafes, vineyards that stretch for acres, fields of corn or cows, lush backyard vegetable gardens and fruit trees bearing plums, peaches, apples and lemons. Even the smaller towns have their own pasticceria (bakery), macelleria (butcher shop) and alimentari (grocery selling fresh fruits and vegetables).

 

Noticeably absent were fast food restaurants or supermarkets. Piedmont is known for its wine, cheese, meats and truffles and the region has created its share of global brands, among them Barolo, Moscato and Nutella. But even in Turin, the region’s commercial hub, you have to look hard to find a McDonald’s or Walmart. (Carrefour Express has outlets in Turin, but they stock more fresh foods than packaged goods.)

This is no accident. Piedmont is home to the Slow Food Movement, which was launched in 1989 after its founder, an Italian journalist named Carlo Petrini, led a campaign that stopped McDonald’s from opening a restaurant near Rome’s Spanish steps. Since then, Slow Food has grown into a global NGO with about 100,000 members in 153 countries (Slow Food USA is based in Brooklyn), a thriving publishing arm and its own small college, the University of Gastronomic Sciences, which is near Bra, Petrini’s home town. [click to continue…]

Cindy Hoots: Transparency and social media at McDonald’s

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Today’s guest post comes from Cindy Hoots of Cone Communications, the company founded by Carol Cone that does excellent work around cause marketing and corporate responsibility. Cindy, whose clients include Johnson & Johnson and Green Mountain Coffee Roasters (but not McDonald’s), previously spent 10 years at Starbucks, working on stakeholder engagement, communications and social media. She also edited The Inspired Economist blog. You can find her on Twitter at @ethicalbiz.

When it comes to multinational corporations, we want to “see the man behind the curtain.” Better yet… we want to question him about his business practices. So what happens when we don’t get the opportunity to ask the burning questions? Well, we begin to spread rumors, create urban myths and make stuff up. McDonald’s Canada has decided to lift “the curtain” (at least a little) and directly answer customer questions through the brilliant use of social media.

Over the summer, the fast food giant launched an initiative called “Our Food. Your Questions” which allows customers to ask questions through Facebook and Twitter and then receive personalized responses from the McDonald’s Canada team. The team has promised to answer every question and has already confronted a number of hot button CSR issues including genetically modified organisms (GM0s), Fair Trade, and animal cruelty. [click to continue…]

A kinder, gentler hot dog

Melissa and Aaron Miller of Kinsman, Ohio recently received Food Alliance certification for their pastured pork and lamb.

Consider meat. It’s bad for the planet. It’s bad for your health if you eat too much of it, which most Americans do. (We eat three times more than the global average.) As for animal welfare, trust me, you don’t want to think about it.

Helene York is a vegetarian, but as director of strategic sourcing and research at Bon Appetit Management Co., a big food-service company, she needs to think about meat. This week, Bamco made a serious commitment to change the way it buys pork, beef, poultry and eggs.

First, the company said, it will

stop serving all pork produced using the cruel and inhumane practice of gestation crates and all eggs, including “liquid” ones (those removed from their shells), from hens confined to battery cages by 2015.

This won’t be easy. About 90 percent of female pigs are raised in metal cages so small that a pregnant sow cannot even turn around. This commitment aims to eliminate one of the worst practices in the meat industry.

Bon Appetit said it will also aim to drive best practices by promising that, by 2015,

at least 25 percent of all our meat, poultry, and eggs will meet the highest animal welfare standards, as verified by the independent third parties Animal Welfare Approved, Food Alliance, or Global Animal Partnership. These four groups don’t just ban gestation crates and battery cages, they prohibit routine antibiotics and all hormones, and reward producers for allowing animals to engage in their natural behaviors.

The news from Bon Appetit, which provides cafeteria food and catering to more than 400 companies, colleges and other venues in 31 states, comes in the wake of an announcement that McDonald’s–which, of course, is much bigger — will ask its pork suppliers to phase out gestation crates. (A stunned Mark Bittman wrote OMG: McDonald’s Does the Right Thing.) Bon Appetit and McDonald’s made their announcements in conjunction with the Humane Society of the United States, an animal rights group. [click to continue…]

Why I’m (still) an optimist

Happy New Year! And good riddance to 2011, a year during which we made little or no progress on some of the issues that I care most about: climate change, the long-term federal debt, social mobility (aka the American dream), and our dysfunctional Congress. Yet I remain an optimist.

Texas drought 2011

I could write many words about our woes. Instead, I’ll try to be succinct. On the climate issue, global emissions of carbon dioxide from fossil-fuel burning jumped by the largest amount on record in 2010, we learned recently, and 2011 surely brought further increases.  Concentrations of CO2 are 39% above where they were at the start of the industrial era and approaching the point when some scientists say it will be nearly impossible to contain global warming, the Guardian reports. Neither the US nor the UN moved closer to regulating CO2. In a discouraging development, Republicans Mitt Romney and Newt Gingrich backed away from their once-sensible support of greenhouse gas regulation, in what can only be seen as shameless pandering to the know-nothing wing of the Republican Party. Discouraging, too, was the Fukushima nuclear disaster, which will slow down the growth of carbon-free nuclear power. So will the failure of Solyndra. Meanwhile, the U.S. suffered massive flooding of the Mississippi and Missouri Rivers, a terrible drought in Texas, record wildfires and at least 2,941 monthly weather records that were broken by extreme events, according to the NRDC.. Coincidence? Uh, no.

Like the atmospheric concentrations of CO2, the federal budget deficit has been growing.That’s no coincidence either. We’re living beyond our means, whether by burning fossil fuels or taxpayer dollars, and sticking future generations with the cleanup bill. Just last week, the White House asked for a $1.2 trillion increase in the federal debt limit, raising it to about $16.4 trillion. According to Marketplace Radio, that amounts to about $52,000 for every American. For a typical  family of four, that’s bigger than the mortgage. [click to continue…]

Smithfield Foods: Sustainable pork?

Unless you avoid pork for religious reasons, you’ve probably eaten pork products from Smithfield Foods: the bacon or sausage in a McDonald’s Egg McMuffin, Armour-Eckrich bologna or ham, pork from Bob Evans or Jimmy Dean’s, an Esskay hot dog at Baltimore’s Camden Yards, and quite likely your Easter ham.

Smithfield is a pork giant. It has 49 factories, 500 or so hog farms, 48,000 employees and about $11 billion in revenues in FY2010. It slaughtered about 27 million animals last year in the U.S. “We’re the largest pork producer in the world, by a long shot,” says Dennis Treacy, the company’s chief sustainability officer.

Yes, Smithfield has a chief sustainability officer–and that may surprise you if you remember reading horror stories about Smithfield’s confined animal feeding operations (CAFO’s), its problems managing pig manure, its labor conflicts or animal welfare  issues in places like The New York Times and Rolling Stone. The company was featured–not in a flattering way–in the movie Food Inc. and sued by Robert F. Kennedy Jr. and the Waterkeeper Alliance.

Dennis Treacy

Treacy had problems with Smithfield, too, before joining the company. In fact, Treacy, who was the director of the Department of Environmental Quality (DEQ) for the state of Virginia from 1998 to 2002 under Republican Gov. Jim Gilmore, once sued Smithfield for polluting the state’s waters.  (You could look it up.) In 1997, Smithfield was fined $12 million, one of the largest fines at the time, for violations of the federal Clean Water Act.

Now, though, Treacy says Smithfield has cleaned up not just the water but its own act. He’s been with the company for nine years, and says he was hired to make the company more sustainable and improve its reputation. “We have slowly but surely built a sustainability program,” he says. “It’s the right thing to do, and everybody wants to work for a company that is respected.”

I met Dennis earlier this week in Washington. He seems like a good guy, and he’s spent his career on environmental issues–he studied fisheries and wildlife at Virginia Tech, got a law degree from Lewis and Clark in Oregon, which is a top environmental law school, and he lives on a small farm near Richmond where he and his wife raise chickens and rabbits. [click to continue…]

Dennis Salazar: the complete package

Dennis and Lenora Salazar

Back in 2007, Dennis Salazar and his wife, Lenora, took a leap.

With about a half a century of combined experience in the packaging industry, they decided to start their own company.

And to make it as “green” as possible.

Then Dennis did something smart. He wrote about his plans. He didn’t write a white paper. “They’re long, they’re boring, they take a lot of time and nobody reads them,” he says. Instead he started a blog, which is no easy feat for someone who’s technical skills aren’t top-of-the-class. “I’m not a young techie,” he told me, unnecessarily, as we struggled to connect via Skype.

He called his first blogpost “Am I retrainable for sustainable?” and wrote:

OK, I admit it. I am confused and perhaps even a tad nervous.

After more than 30 years as a packaging professional focused on flexible—dare I say—plastic packaging, this new movement people are calling ” sustainable” packaging has me seriously concerned.

He obviously didn’t have all the answers, but he promised to try to figure out what’s best for his customers and for the environment.  He listed Seven R’s — renew, reuse, recycle, remove, reduce, revenue and read, promising to education himself, his customers and ordinary consumers as he learned more. “That’s the beauty of this market,” he says. “While we teach on a daily basis, we learn on a daily basis.”

Today, Salazar Packaging is doing well. Based in Plainfield, IL, the firm has customers from all around the U.S. including well-known national brands like Stonyfield Farms and Method and smaller firms like Coyuchi, which makes bath, bedding and baby products from organic cotton, and Volcano Island Honey Co, which makes Hawaiian white organic honey.

I ordinarily don’t write about small b-to-b companies–my focus is the FORTUNE 500, and consumer brands–but Dennis, who is now 56, has a story is worth telling, for several reasons. [click to continue…]