A huge challenge lies ahead of the world's biggest restaurant chain, largely run by franchises. Taken from Innovation Forum's Supply Chain Risk & Innovation publication, published ten times a year on a subscription basis. The publication brings together concise, practical insight into global supply chains. Required reading for senior management, buyers, business sustainability professionals and all who advise them, Supply Chain Risk & Innovation distils all the myriad information, data, research and comment, presented it in a clear, analytical format. This piece comes from our third issue, to which you can receive as part of a free 3 month trial, should you subscribe by Friday 4th March here: http://innovation-forum.co.uk/supply-chain-risk-innovation-subscribe.php

1. PAGE 12
Essential insight
• If you've got positive commitments,
let everyone know. McDonald's has has
publicly committed to sustainably source
all packaging, unveiled as part of its 2014
global sustainability package.
• While its European restaurants met the
target for 100% of fibre-based packaging
to be from sustainable sources in 2015, the
rest of the world is lagging behind, with just
23% of fibre-based packaging globally from
sustainable sources.
• The business says it expects progress
towards target to accelerate towards 2020.
• Engagement is crucial for success.
McDonald's admits that getting its
franchisees on side – to understand where
the company wants to get to – is going to be
crucial if it is to meet its goals.
CORPORATE CASE STUDY: MCDONALD'S
McDonald’stargets100%sustainablepackaging
Huge challenge lies ahead for world’s biggest restaurant chain, largely run by franchisees
McDonald’s is the world’s largest restaurant
chain and one of the most recognisable
global brands. As such, its activities have
attracted a lot of attention over the years
and in the past its record on sustainability
issues has come under attack, not least for
the amount of packaging it produces and its
contribution to problems ranging from litter
to deforestation.
However, in the last few years it has
rolled out a number of sustainability
commitments, including its first global
sustainability strategy, which was launched in
2014. The Global Sustainability Framework
has five focus areas – food, sourcing, planet,
people and community.
Business value
As part of that, its global vision is to source
all food and packaging sustainably, says
Rolf Huwyler, the company’s lead for global
packaging sustainability. The company has
identified six priority raw materials to focus
on – alongside packaging it is also working to
make its coffee, palm oil, poultry, fish and beef
more sustainable.
These efforts have already demonstrated
their business value – in the 2013 horsemeat
scandal that hit Europe, McDonald’s was able
to say that it knew where the beef in every
beefburger came from. All the company’s fish
is certified by the Marine Stewardship Council
(MSC) and, except for decaf, all its coffee
is either Rainforest Alliance or Fairtrade
International certified.
Packaging is an area that has a big impact
but many people don’t consider it, the company
says. In Europe, since September 2015 all
the group’s centrally sourced, fibre-based
packaging – which includes cartons, cups, bags,
napkins, wraps, tray liners and even the paper
in which its straws are wrapped – has been
chain of custody certified with the wood fibre
coming from forests certified as sustainable
by the Forest Stewardship Council (FSC) or
the Programme for Endorsement of Forest
Certification (PEFC).
The move covers restaurants in 38
European countries. This paper- and
card-based material makes up about 90% of
such packaging and for the remaining 10% of
plastic materials, the company is looking to
use fewer materials, with those that it does use
being more recycled and more recyclable.
McDonald’s approach to sustainability
across all raw materials is guided by the “3
Es” of ethics (setting high standards in people
practices and animal welfare), environment
(minimising environmental impacts) and
economics (ensuring the economic viability
of agricultural communities). For packaging,
it has come up with a more holistic strategy
that encompasses more sustainable packaging
CORPORATE INSIGHTSUPPLY CHAIN RISK & INNOVATION
During the 2013 European
horsemeat scandal, McDonald’s
was able to say that it knew
where the beef in every
beefburger came from
Paper and
card materials
makes up
90%OF
PACKAGING
Expert commentary
“McDonald’s has made good progress
towards more sustainable packaging
in its European operations, but as a
global business it will need to accelerate
progress in its laggard markets. Finding
the right mix of incentives, recognition
and education to win over sceptical
franchisees is obviously important to
further progress.”
Prof David Grayson, Cranfield University School
of Management’s Doughty Centre for Corporate
Responsibility

2. PAGE 13
materials but also how those materials can
get recycled in its restaurants, says Huwyler.
The challenge of making packaging more
sustainable is that sometimes the most
sustainable option from an environmental
point of view collides with food safety
regulations. McDonald’s packaging has to
meet multiple challenges – from protecting
food, to ensuring it is fresh, hot, convenient,
but also safe to eat.
The sustainable packaging target fits in
to a global vision for McDonald’s to source
sustainably all of its food and packaging
around the world. The European division
has been leading the way, achieving the
target last year. The company uses as much
recycled material in its packaging as is safe
and practical for the business – for example,
all napkins are made from 100% recycled
materials, the company says.
Franchisee challenge
McDonald’s has a unique challenge when
it comes to tackling sustainability in that
75-80% of its restaurants around the world
are run by franchisees rather than owned by
the company itself, says Joanna de Koning,
senior manager in the company’s European
communications team. She says she sees
the business as a three-legged stool – the
company, the franchisees and the suppliers;
MCDONALD'S FACTS:
CORPORATE INSIGHTSUPPLY CHAIN RISK & INNOVATION
and it is crucial it gets the franchisees on
board with all sustainability efforts.
However, the biggest challenge is handling
many different suppliers involved across many
markets, the company says. Working closely
with all suppliers, providing support and
sharing knowledge to develop best practice,
Huwyler says the advice he would give to
others would be to ensure you have a strong
and clear strategy so all partners involved
always know where you are heading. “This
was one of the most important elements of the
journey for us.”
All of the company’s largest European
markets have plans to increase the percentage
of waste that is recycled in their restaurants.
In the kitchens, frying oil, organic waste and
corrugated PE foil are recycled
and in markets where national recycling
schemes are in place, many restaurants also
separate customer waste for recycling or are
trialling this.
However, progress is slower in other
regions. As of 2014, the company’s most recent
global update, it had sourced 23%
fibre-based packaging from verified sustainable
sources. However, the company says it expects
to see tangible progress year-by-year in the
lead up to 2020. t is looking at the progress
in Europe and seeking to apply lessons learnt
there to other markets. ★
Certification in the bag
75-80%of McDonald’s restaurants
globally are run by
franchisees
100%OFMCDONALD’S
NAPKINSAREMADE
from recycled materials
All centrally sourced fibre-
based packaging is chain of
custody certified – covering
38 European countries
As of 2014, the business had
sourced 23% of fibre-based
packaging from verified
sustainable sources