Michael L. Thompson, CEO of Fair Oaks Farms L.L.C., and his relationship with McDonald’s USA demonstrate how the nation’s largest fast-food company makes supplier diversity work. Fair Oaks Farms (No. 15 on the BE Industrial/Service Companies list with $288.7 million in revenues) supplies McDonald’s with breakfast sausage for approximately 35% and strip bacon for about 75% of the U.S., in addition to some of McDonald’s international markets.
Thompson has expanded Fair Oaks through retail and food service growth opportunities, including additional business with McDonald’s. “We have a strategy to grow with all our key customers,” he says. “Our business has more than tripled since becoming a majority owner of Fair Oaks Farms in 2003. We’ve been extremely blessed to have McDonald’s as our largest customer.”
Before becoming a supplier to the $27 billion giant, Thompson worked as a vice president for McDonald’s in both operations and supply chain, so he knew the culture and process well. “Knowing both the operations and supply sides of the business helped me to understand their needs at a higher level,” he says. Thompson’s Pleasant Prairie, Wisconsin-based business also supplies food products to Walmart, Sam’s Club, Papa John’s, Denny’s, and Olive Garden. One of the most important lessons he’s learned as a supplier is to leverage whatever is unique about his business. “Yes, customers want low prices,” says Thompson, “but they want other things, too. In my world, it’s food safety and quality.”
Thompson is part of McDonald’s expanding diverse supply chain network. In 2011, McDonald’s purchased nearly $817 million in goods and services from companies owned by African Americans. In the past five years, the fast food giant’s overall purchases from African American suppliers have increased 24.3%. The McDonald’s U.S. system annually purchases more than 50% of its total food, distribution, and paper from minority- and women-owned suppliers. “One of the things I’m most proud of is how our team continues to make diversity a priority,” says Pat Harris, the company’s global chief diversity officer. “They demonstrate every day that at McDonald’s, D and I [diversity and inclusion] is everyone’s business.”
View the 2012 Best Companies for Diversity here.
(Continued on next page)