Brazil could jump ahead in race to supply sustainable beef to McDonald’s

Brazil could jump ahead in race to supply sustainable beef to McDonald’s

By Bob Moser on 11/5/2014

SAO PAULO — McDonald’s expects Canada to become the first country to supply verified sustainable beef to the company in 2016, but other countries could still jump ahead during the coming year, with Brazil the best-positioned of any to pull off an upset.

McDonald’s announced in January it would begin sourcing verified sustainable beef for its hamburgers by 2016. The company is working with the Canadian Roundtable for Sustainable Beef, the Canadian Cattlemen’s Association and ranchers in the country to develop standards and a third-party verification system process next year.

McDonald’s settled on Canada as the focal market for this pilot project after finding that its beef supply chain in the country was already streamlined, said Michele Banik-Rake, director of sustainability. The company has just one hamburger processing plant in Canada with two suppliers of beef, one of which is JBS SA, a key supporter of the Global Roundtable for Sustainable Beef (GRSB), which announced on Monday its new global principles and criteria for sustainable beef production.

“It’s not our intent to create a ‘McDonald’s standard.’ We want to work with ranchers in a collaborative process so that these standards are something they will be comfortable with,” said Banik-Rake from the sidelines of the Global Conference on Sustainable Beef, held in Sao Paulo this week.

“At the end of the day, our initial purchase (in 2016) may be small to start, because we don’t know yet what the indicators and verification system (in Canada) will be,” she continued. “Once that is established, we’ll get a better idea with the industry in Canada of how many farms can comply. We’ll then set a target in 2016 with goals for 2020 on how much of our total (beef supply) will be verified sustainable.”

Because countries like Brazil, Colombia and Mexico also have roundtable groups attempting to develop sustainable beef criteria in 2015, McDonald’s sustainability teams elsewhere in the world could beat out Canada in a race to deliver the company’s first verified sustainable beef hamburger patties.

Arcos Dorados Holdings Inc., McDonald’s franchisee in Brazil, is in the best position to jump ahead, with a pilot project that could be ready as soon as late 2015, said Leonardo Lima, sustainability director for Latin America.

Arcos Dorados has the advantage of already being a member of Brazil’s roundtable group, the Grupo de Trabalho da Pecuaria Sustentavel (GTPS), which said Tuesday it would produce its own priorities and criteria for sustainable beef by November 2015. Brazil’s GTPS is further along than any national or regional roundtable group in terms of developing its own standards.

“Our first step will be a pilot project that applies the standards of (GTPS), but there are producers we work with in Brazil that may be ready to meet these standards incredibly quickly,” Lima said.

The company’s two top beef suppliers in Brazil, JBS and Marfrig, are both involved in GTPS and the GRSB, and have been industry trend-setters in recent years with the development of supplier traceability programs in Brazil, as well as nationally recognized initiatives in areas like energy and waste reduction.

“We are so happy to work with these large suppliers, because they are several steps ahead of the competition worldwide in terms of implementing their own standards for sustainability,” Lima said.