Aussie beef key to McDonald's: FMG boss at Angus conference at Tamworth

Matt Toll, chief executive officer at Fulton Market Group, one of the world's largest beef procurement companies with operations in three countries, had a very encouraging message.

Of all the suppliers FMG deals with on behalf of McDonald's, Australia was in an amazing position with big opportunities ahead, he said.

FMG oversees close to three quarters of McDonald's global beef and pork requirements, which equates to sourcing 450,000 tonnes of beef and 120,000t of pork a year.

Of that beef supply, as much as 90,000t is sourced in Australia.

With a career spanning beef fabrication, import and export sales and logistics, market access and supply chain innovation over 30 years, Mr Toll's presentation at the 2023 Angus National Conference was one of the most anticipated on the beef industry conference circuit.

Australian beef was a key part of McDonald's business, he told the 200-plus strong audience.

"It is in 70pc of McDonald's restaurants globally to some degree," he said.

And there are more than 36,000 Maccas restaurants across the globe.

"It is critical for McDonald's that the situation in Australia remains as is from a quality and sustainability standards point of view."

The McDonald's Angus story was also one of phenomenal strength, as described by Mr Toll.

FMG purchases around 7500t a year on average of Australian Angus, a figure that peaked in 2019 at 9000t. About 56pc of that is exported.

COVID knocked those exports around primarily because volumes into China backed right off, Mr Toll said.

China takes about a third of the Australian Angus that FMG sources. There are four Angus burgers permanently on the McDonald's menu in China and they make up 20pc of sales.

"We are already seeing an Angus rebound into China as they start to open up again," Mr Toll said.

"And there is significant restaurant growth coming in China.

"Already, we have done more Angus to China so far this year than the whole of last year."

ALSO IN BEEF:

Headquartered in Chicago, FMG was formed five years ago on the back of an effort by McDonald's to consolidate its beef supply chain in the United States, Mr Toll said.

"This was for a few reasons - to bring together some leverage in buying but equally important for McDonald's was to use their scale to do things - and right now those things are focussed around sustainability, animal welfare and social welfare."

Fulton Market is the area in Chicago where the meat packing industry started. FMG also has an office in Sydney.

In a nutshell, FMG forecasts markets, then sets procurement strategy around those forecasts, finances the flow of product and manages that flow.

FMG buys from 125 packers around the world and supplies 21 factories that make products for McDonald's.

It purchases from the main beef exporting nations - the US, Australia, Canada, Brazil, New Zealand, the United Kingdom and Ireland.

On the pork side, it sources primarily from the US and Canada. Right now, it is running an assessment on the feasibility of European beef and poultry supply.

Going forward, Mr Toll said he saw FMG as increasingly needing to engage, in a deeper way, the producer at a farm level, mainly around sustainability.

Resiliency, sustainability and digitisation were the three pillars FMG operated on, he said.

"Resiliency is making sure restaurants never run out of meat," he said.

"We're proud to say we kept McDonald's in beef during COVID when most other chains ran out.

"It was game on - the (US) kill was down to 40pc and everyone wanted ground beef to stick in the freezer.

"That was the making of our business."

Diversity and innovation played a big role, he said.

That is why FMG invests heavily in technology and sees digitisation as the way forward, particularly where sustainability is concerned.

"Digitisation is a word bandied around but it's so crucial to us to capture data and be willing to share it, such that we can defend what we do and demonstrate in a verified way our sustainability," Mr Toll said.

"Banks will increasingly ask all of us, at every part of the supply chain, for information in order to allow them to lend.

"I think we will see split lending rates between those who have the data and those who don't."