The next step after McDonald’s apple deal

08/05/2011 08:49:00 AM
Amelia Freidline

MONTEREY, Calif. — In all the thoughts of increased exposure and sales from McDonald’s plan to make sliced apples a standard side item in Happy Meals, perhaps a bigger “tipping point” was reached.

Greg Johnson, EditorMcDonald’s, with one of the world’s best-known brands, is willing to stake its reputation on a fresh-cut produce item.

“It says a lot about sliced apples,” said Tony Freytag, national marketing director for Cashmere, Wash.-based Crunch Pak, a pioneer in the sliced apple market — but not a McDonald’s supplier — at the Produce Marketing Association’s Foodservice Conference.

When McDonald’s commits to a product, the product has to be big enough to supply its 14,000 U.S. stores, Freytag said, and high enough quality that McDonald’s can confidently serve it, let alone make it standard in a kids meal.

He said he was proud to be in that segment, and I don’t blame him. Fresh-cut apples are a model product in showing how they can become a regular part of a fast-food meal.

The July 30 opening session at the conference addressed the McDonald’s news.

“It really speaks well for fresh-cut,” said Lorri Koster, Salinas-based Mann Packing’s vice president of marketing.

Greg Drescher, executive director of strategic initiatives for the Culinary Institute of America at Greystone, said McDonald’s had tried to replace french fries with apples before, but it got hit with consumer backlash. Having both standard in a Happy Meal is “stealth health” that can work.

Peter Testa, president of Testa Produce, Chicago, said product suppliers now have to work to get other items into kids meals.

Rich Dachman, vice president of produce for Sysco Corp., Houston, pointed out that earlier this summer Wendy’s ran a large promotion with fresh berries, and Subway had a promotion with avocados.

Indeed, The Packer’s 2011 Foodservice Achievement Award went to Tina Fitzgerald, director of produce and corporate responsibility for Miami-based Independent Purchasing Cooperative, Subway’s procurement division, in part for her work on promoting avocados in Subway stores.

Matching McDonald’s success

As good as Wendy’s and Subway’s promotions were, they weren’t designed to reach the scale that McDonald’s plans with fresh-cut apples.

There’s still a big difference between being a sometimes pricey addition to a sandwich or meal and being a standard part, like the fries and a drink.

There’s also a big difference between McDonald’s and its competitors. Nation’s Restaurant News research shows McDonald’s U.S. sales at $32.4 billion, more than three times that of No. 2 Subway, at $10.6 billion. Burger King, Starbucks and Wendy’s round out the top 5.

All of those chains have the potential to elevate fresh produce and make its a standard option in combo meals (except Starbucks), and I expect some quickly will in response to McDonald’s news.

Burger competitors can’t risk letting McDonald’s claim the high ground in fighting obesity in children by offering healthier fare.

This is where others in the fresh produce industry need to follow apples’ example.

For a fresh produce item to succeed like apples at McDonald’s, it needs to have high volume, consistent high quality and be able to be packaged so a $1 price point is still profitable, or close to it.

Often fresh-cut is the way to go, but other value-added products could also pull this off.

In the fruit arena, berries will have a tough time because of price, but an example could be the new product from Naples, Fla.-based Naturipe Farms LLC, Berry Quick Snacks, which are washed and packed in 1.5-ounce single servings.

Grapes could also work in a small serving size in fast food. Value-added grape packs have been around for years but they haven’t reached a large audience.

On the vegetable side, carrots are a natural, and last fall, Bakersfield-based Bolthouse Farms showed the commodity could break into non-traditional markets with its Eat ‘Em Like Junk Food campaign.

No doubt some produce companies are already in talks with major QSR chains about such programs.

Apples have the first nationwide opportunity to prove fresh fruit can move past the tipping point to fast-food meal staple.

They should succeed, and others should follow.

gjohnson@thepacker.com

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