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McDonald’s pledges to increase is purchases from diverse-owned U.S. suppliers.

The Chicago Tribune

One year after McDonald’s joined a chorus of corporations calling for greater diversity and inclusion in commerce, the fast-food giant is pledging to increase its purchases from diverse-owned U.S. suppliers to $3.5 billion, or 25% of its annual spending, by 2025.

Chicago-based McDonald’s spends about $14 billion annually across its U.S. supply chain, buying 23% of goods and services last year from diverse-owned suppliers.

The company needs to increase annual spending with minority suppliers by 10%, or about $300 million, to reach its new target.

“McDonald’s partnership with our vast network of suppliers is not only fundamental to delivering on our purpose to feed and foster communities — it’s also key to realizing our diversity, equity, and inclusion ambition,” Marion Gross, head of McDonald’s North American supply chain, said in a news release Thursday.

McDonald’s USA defines diverse-owned businesses as those owned by women, people of color, veterans and other underrepresented groups.

In addition to increasing its commitment to a more diverse supply chain, McDonald’s recruited more than 20 of its largest U.S. suppliers to join a company initiative aimed at promoting economic opportunity and growth more broadly in diverse communities.

Companies that have signed on to the pledge to be accountable to progress in “accelerating cultures of inclusion” and “dismantling barriers to economic opportunity” include Accenture, Cargill, New Horizons Baking Co. and Tyson Foods.

“We are committed to furthering equality within our business with every team member — every shift, every day — and in the communities where we live and work,” John Tyson, chief sustainability officer at Tyson Foods, said in a statement.

The pledge outlines a number of areas for suppliers to focus on, from increasing overall diversity in leadership and staffing to investing in programs to make a “measurable difference” in the talent pipeline in communities where McDonald’s operates.

McDonald’s, one of the largest restaurant chains in the world with 39,000 locations, has 14,000 restaurants in the U.S., of which 93% are franchised.

Last year, in the wake of George Floyd’s death at the hands of Minneapolis police and the civil unrest that followed, McDonald’s was among several prominent Chicago companies voicing support for enhanced diversity and inclusion programs.

Since then, McDonald’s said it has advanced a number of initiatives, including hiring Reginald Miller in November as its global diversity, equity and inclusion officer.

Beefing up diversity in the supply chain may be crucial to following through on the broader commitment to diversity, Miller said.

“As a values-based organization, we are compelled to do our part to make the world more equitable, and the absolute best way to do so is to leverage our size and scale through our value chain,” Miller said.

McDonald’s has not been without its own struggles internally to promote diversity and inclusion. In January 2020, two Black executives at McDonald’s filed a lawsuit against the fast-food giant, alleging they were passed over for promotions, subjected to a hostile work environment and ultimately demoted due to “pervasive” racial discrimination.

The ongoing lawsuit in Chicago federal court alleges a “hostile and abusive work environment” that included threats, derogatory racial comments and impediments to advancement for Black employees.

The company also faces discrimination allegations from more than 50 Black former franchise owners, who alleged in an August lawsuit the burger chain steered them to less profitable restaurants and didn’t give them the same opportunities as white franchisees.

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