Senior Farm and Ranch Broadcaster Ron Hays had the chance to talk with the President of Lopez Dorada Foods, John Patrick Lopez about how his family’s business became a top ground beef supplier for the McDonald’s Corporation.
Lopez Foods was started in the ‘90s and has grown to become one of the biggest suppliers of beef patties to the McDonalds Corporation.
Prior to the establishment of Lopez Foods, an Oklahoma beef company was involved in a hostile takeover. Management of the McDonalds Corporation at the time didn’t like people being able to buy their way into the McDonald’s system so they recanted controlling interests and began searching for a new owner.
They were looking for more diversity, and Hispanic, Asian, African American, and female were all demographics that they considered. Ultimately, they decided that they needed more Hispanics and decided to look at their franchisees to find a likely candidate.
“It was a risky move on their part because they had never done it before, but they said [of my parents] they have a true entrepreneurial spirit. They know what is required of them on the restaurant side,” Lopez said. “To make a long story short, they did a nationwide search and selected my parents who lived in Los Angeles, California at the time.”
They invited the Lopezes to Oklahoma with instructions not to decide until they understood the business model.
After operating for several years, Lopez Foods was instrumental in helping transition McDonald’s from frozen to fresh beef in their quarter-pound burgers.
“McDonalds was looking at the quality score associated with their sandwiches. Notably, McDonalds was losing out to other quick-service restaurants,” Lopez explained. “If someone said that their beef was fresh, never froze, then obviously, the consumer had a higher perception of that product.”
When McDonald’s decided to change that, Lopez Foods went to work to develop a fresh beef program for them. The pilot was first introduced in Fort Worth, Texas, and Tulsa, Oklahoma, and the consumers showed an obvious preference for the quarter-pounders served at those restaurants.
The pilot program was a success and McDonald’s went nationwide with fresh beef for their quarter pounders. “We developed the full program, worked with the grinders to implement it at their facilities, and when we launched it, it was a huge success,” Lopez said, proudly. “The fresh beef program has been an outstanding success, and we are very proud to have been a part of developing that and launching it nationwide.”
Lopez and his team are always aware of what is going on in the beef industry. “We have to understand things like herd liquidation and the impact that it will have on our operation. We also have to be mindful of what is happening from a drought standpoint, and with feed such as the price of corn, and the export market. We also have to pay attention to what competing proteins are doing.
“We are not just a grinder that makes a product. We have to engage with the industry so that we can make key business decisions to not only say ‘This is what’s best for our core customer, but this is also what’s best for us as a company.’ We need to be sure we can provide a five-day-per-week schedule for our employees. They love to work and are proud of the product they make. So, we have to watch our inventory levels and also be mindful of what is going on in the industry.”
Lopez-Dorada Foods supplies McDonald’s restaurants across Oklahoma, Texas, Kansas, Nebraska, Missouri, Louisiana, New Mexico, Colorado, and Utah. “We also provide contingency support if another grinder goes down, because we all have to have some downtime to work on equipment or a facility. We all support each other on behalf of the brand McDonald’s.”
Lopez said that most of their beef is sourced from the U.S., but there are times when they have to purchase beef from other countries due to low supplies. On the rare occasion that happens, it most often comes from Australia and New Zealand.
Lopez was a speaker earlier this summer at the Trust in Beef Sustainable Ranchers Tour held in Stillwater, Oklahoma.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
