McDonald’s CEO says he is confident in the company’s supply chain, as the fast-food giant changes how restaurants get beef and Wendy’s runs out of burgers

Image
McDonald’s CEO Chris Kempczinski is confident in the fast-food giant’s meat supply chain. Hollis Johnson/Business Insider

McDonald’s CEO Chris Kempczinski remains confident in the fast-food giant’s meat supply chain, despite meat processing plants across the US being forced to shut down due to the coronavirus pandemic.

“For us really what’s been incredible is just through this entire pandemic we haven’t had a supply chain break anywhere in all 40,000 restaurants around the globe,” Kempczinski said in an interview with Good Morning America on Thursday.

“That said, in the U.S. And North America, you know, we’re watching very closely this meat supply issue,” Kempczinski continued. “It’s particularly an issue with beef. Right now we feel good about our situation, but it really is a day-to-day status and we’re monitoring it.”

McDonald’s announced last week that it would change how restaurants source meat to combat supply chain concerns, according to an internal announcement obtained by Business Insider. Items including burger patties, bacon, and sausage are now shipped based on calculated demand, as opposed to the usual practice of management ordering the amount believed will be needed.

In an internal call, McDonald’s executives said the company expected major reductions in meat production to continue through the first half of May and that it will likely take months for production to return to pre-COVID-19 levels.

Mcdonald's coronavirus
McDonald’s is making changes in the coronavirus era. REUTERS/Piroschka van de Wouw

Fellow fast-food executives, such as José Cil, the CEO of Burger King’s parent company Restaurant Brands International, have said they are closely monitoring the situation. Earlier this week, news broke that Wendy’s was running out of beef and limiting its menu at roughly 18% of locations.

Concerns around meat shortages have lead to grocers including Kroger and Costco to limit beef purchases at some locations. Pork and beef prices could increase by an unprecedented 20% in grocery stores in the coming months, according to a recent report from CoBank that concluded shortages and price inflation are “nearly assured.”

Meat supply chains have been breaking down as workers in meat processing plants get sick with COVID-19, forcing plants to shutter and convincing employees who are worried about getting sick to stay home.

More than 4,900 workers have been diagnosed with COVID-19, with 20 deaths, according to a report from the Centres for Disease Control and Prevention released on Friday. Experts say that meat processing plants are the next hotspots for coronavirus, following President Trump ordering plants to stay open to combat shortages.