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[10 comments]

Where's the Sustainable Beef?

January 9, 2014

Earlier this week, McDonald's went public with a pledge "to begin purchasing verified sustainable beef in 2016." Among the first thoughts that came to mind when hearing the news was, "What is sustainable beef?" As it turns out, McDonald's doesn't have a definition either, but as the press around the pledge suggests, it seems pretty intent on addressing the issue nonetheless.

McDonald's does know that it wants to do its "part to improve environmental practices in the way beef is produced, support positive workplaces in the beef industry, and drive continuous improvement in animal health and welfare."

Members of the Milton Friedman fan club won't need to begin firing off nasty letters to McDonald's CEO Donald Thompson. McDonald's plans to do all this and keep its burgers affordable for its customers, which will in turn provide continuing returns for its investors.

The beef announcement is part of a larger mission around sustainability for the company.

"We aspire to source all of our food and packaging from sustainable sources, verified sources for sustainability on the way they treat animals, on the way they treat people, as well as the planet," J.C. Gonzalez-Mendez, senior vice president of global CSR, sustainability and philanthropy, told GreenBiz.

In the same article, McDonald's expressed confidence in its ability to reach its goal because of the close relationship it has with suppliers around the globe. According to the piece, the chain has about 20 suppliers that represent about two-thirds of its annual expenditures.

FINANCIALS:     [NYSE:MCD] [ ]

Discussion Questions:

What do you make of McDonald's announcement that it intends to begin purchasing sustainable beef by 2016? Do "sustainability" efforts by McDonald's and others pay off for the companies and their investors?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Generally speaking, do you think corporate "sustainability" efforts help or hurt companies and their investors?

Comments:

As long as cows can breed they are "sustainable." That is not the problem. The problem is the crap they are being fed (principally corn) and then the antibiotics needed to compensate for what that feed does to the animal.

What producers want is "sustainable" profit regardless of the risk to the public. This is not an agricultural discussion, it's a moral one.

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Ian Percy, President, The Ian Percy Corporation

"Sustainable" may be the new "green." Nobody's quite sure what it is, but the buzzword sounds good in a press release. Soon everybody will say it in fast food and there will be no advantage.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

I love to point out how much I hate it when people "pop-off" in public. (pop-off: Australian slang for spewing utterly meaningless drivel in a compelling manner.)

Unfortunately, Mr. Gonzalez-Mendez is simply falling in line with the herd. From "organic" to "locavores" to "sustainable", many in our industry are flinging terms about with little understanding of what they mean - much less what is involved in accomplishing what they think they are espousing.

Most cattle growers would contend that they are doing EXACTLY what is necessary to provide a sustainable supply of high quality beef at the best possible cost/value. That doing so involves feeding high carbohydrate grains like corn (fattens and increases flavor and tenderness versus grass for all the non-farmers reading) is of little concern to them. It works. And consumers like the end result.

Some consumers have also demonstrated that they think the trade-offs for grass-fed beef are worth it. And some growers (this one included) are happy to meet that need. Wonderful. The market works.

But it is a very tricky proposition to inject moral requirements and judgements made by a population that knows next to nothing about what they are talking about into our food chain. And senior food industry execs who know even less trying to pander to that population is even worse.

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Ben Ball, Senior Vice President, Dechert-Hampe

I'm with Ian and will pose a question. How much outrage would there be if a food company refused to allow any photos or videos to be taken it its green bean factory? "Ag-Gag" laws are being considered by multiple legislatures that criminalize documenting farm/processing cruelty. Transparency before "sustainability" please.

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Carol Spieckerman, President, newmarketbuilders

Like any positioning claim it needs to be clear, distinct and desirable. Assuming McDonald's can do this and deliver on its promise, then it could payoff for McDonald's as well as for other companies and their investors.

Keep in mind, talk is cheap. If it makes a difference and a company delivers, it has real potential for sales and profitability gains.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

I laughed out loud when I read the words "sustainable beef." Yes. I want my beef to be from cows which were fed properly, raised and ultimately butchered humanely - and I want my burgers with as little filler as possible. There are other words to describe all that. I have no idea what sustainable beef is and neither does McDonald's nor does their PR agency, I'd bet. But apparently they think it sounds good.

'Liatt'

The complexity of the issues in "sustainable beef" is well treated by the referenced article from greenbiz.

There's no common definition, there are numerous local variations, and the Global Roundtable group has identified some six broad principles to help define and measure "sustainability." No easy task and whenever you get such a broad group, one has to wonder about ability to reach agreement, let alone have meaningful implementation.

On the consumer side, there is increasing desire to know from where and how their food is grown (transparency). I don't see this trend going away, and if anything it is likely to increase. Given the huge significance of beef in McDonald's revenue stream, they need to be part of the ongoing global dialogue around sustainability. They have two years to figure out how this will work.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

Sustainable is the new green - as in money. Sustainability efforts go forward when the company finds out how to make money off these efforts. For example, clothing manufacturers working on a way to "spin" jeans from a single thread as opposed to spinning fabric and cutting the piece - leaving waste.

As others have said, done right, agriculture is almost always sustainable. Done wrong - see Dustbowl of early 1900s - or read "The Worst Time, The untold story of those who survived the Great Dust Bowl." Free on Amazon Prime.

'Stanaggie'

The message to the public seems to fall short of guaranteeing that the all beef patty is just that. A vast majority of consumers are not indifferent to the possibility of their super sized Berger Meal containing unsavory morsels of pelican, panda, horse or who knows what in place of beef, simply which is there in pursuit of cost savings or maybe just a little mistake. This little bit of information might be of assistance for those looking to define "verified sustainable beef." In fact, if the pledge was expanded to "verified sustainable beef only" it would surely add to the consumer confidence they are looking for from this message. In areas around the world where beef is not attainable or unattractive to the consumer, then simply change the name to better describe the content of a market acceptable product(s).

'gjarnoldjr'

In a literal sense, "Sustainable Beef" means that you can cut a steak off of a living steer and it will grow back.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

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