Ágnes Horváth
CEO
McDonald’s Hungary Restaurant Chain LLC
McDonald’s is a widely known and recognised restaurant chain that serves millions of people all around the world daily. As a responsible company we seek to operate and improve our restaurants and supply chain on a sustainable manner. In partnership with our suppliers, we regulate food safety and quality measures starting as early as raw material production. We support the development of sustainable agriculture and our goal is to procure our food and packaging materials from sustainable sources. In 2009, we launched the Flagship Farms program in Europe with the purpose of encouraging broader dialogue with farmers suppling raw materials to McDonald’s, promoting and sharing the most outstanding sustainable agricultural practices, and highlighting the importance of animal welfare, employment, environmental protection and the long-term economic viability of their businesses. By introducing Flagship Farms program participants with the best practices, we intend to create positive changes among farms supplying to McDonald’s and within the entire European agricultural community as well.
Sustainable farming, local suppliers
Industry: FMCG
Date: From 1988
Food and Feed
Solutions of the macro-sustainability challenges
Source raw materials from sustainable farm operations; strengthen the cooperation between local suppliers, food producers and distributors, improve regional value-added food networks based on local resources.
Further targets:
What´s the solution?
McDonalds’s Hungary was among the first companies that used ingredients coming from sustainable farms, certified by an independent certification body:
2008: Arabica coffee beans certified by Rainforest Alliance
2011: White fish certified by Marine Stewardship Council
2015 October: Packaging certified by Forest Stewardship Council (FSC) and Programme for Endorsement of Forest Certification (PEFC)
McDonald’s has maintained a long-term supplier relation – 60% of the Hungarian suppliers deliver to us for more than 20 years. As manager of the food supply-chain, we validate requirements that help our restaurant chain’s continuous development. These expectations do not only include quality and security requirements but sustainability ones too. The aim of McDonald’s Agricultural Assurance Programme (MAAP) implemented in Hungary too, is to provide an internal reference tool used to assess the relative standards in the assurance schemes used on the farms which supply McDonald’s. The MAAP framework enables us to monitor and manage food safety, quality, ethics and sustainability through a series of targets for our direct suppliers.
Business connection
Our customers have high quality and sustainability expectation towards McDonald’s, even though our restaurant chain does not have its own fields and livestock farms; produce or supply raw materials; have processing plants and warehouses; transport; or sell raw materials and products to its restaurants or franchise partners. Therefore, McDonald’s obtains the articulated quality and sustainability goals based on expectations of the supply chain, developed standards and professional co-operation with suppliers.
The key to achieve these goals is a network built on long-term cooperation, which establishes the possibility for mutual trust and adaptability, openness and need for change, and development and innovation. All of these are essential for McDonald’s to continuously meet is customers’ needs and expectations in the field of sustainability as well, and even exceeds them by providing long-term benefits for business operations and creating an example to other market participants.
Results
Purchasing sustainable products and encourage sustainable practices do not only have local impact but they influence the entire sector indirectly. Therefore, as a result of decisions and practices made by those important market actors that are committed to sustainability, sustainability does not only entail business advantage, but it has already become essential condition of competitiveness. Due to long-term relations, continuous high-volume orders, as well as stable and solvent partnership, supplier have the opportunity to invest in sustainable operations. Domestic supplier investments show the benefits of long-term relations: McDonald’s 12 Hungarian suppliers spent HUF 60.4 billion worth of investments on production line modernisation and capacity expansion since the beginning of their partnership with McDonald’s. Within its Flagship Farms (good agricultural practices) program and through its international relations, McDonald’s promotes knowledge-sharing between countries.
Thanks to this, it possible for McDonald’s domestic suppliers to develop more sustainable and efficient production methods. This increases the competitiveness of suppliers, therefore they become capable for expanding on the international markets as well. McDonald’s Hungarian suppliers exported for HUF 68 billion to McDonald’s restaurants abroad, which means HUF 28 billion surplus foreign trade balance, compared to HUF 40 billion worth domestic import. It demonstrates McDonald’s significant export promotion impact, that the company’s foreign trade balance increased nearly six-fold over the period of 4 years.