McDonald’s announced today that the world’s largest restaurant company will join roughly 20 of its largest US-based suppliers as signatories of its new Mutual Commitment to Diversity, Equity and Inclusion to significantly boost purchases of goods and services from diverse vendors.
According to company officials, the expansive MCDEI is expected to result in its US system increasing procurement spend with such companies by nearly 10% by 2025. Officials stated that the expansion represents a quarter if its domestic spend — roughly $3.5 billion with more than 385 diverse-owned suppliers, ranging from food services companies to financial services firms. In 2020, the company and domestic franchisees spent about $14 billion throughout its domestic supply chain.
“We’re proud of our leadership position and storied history in supplier diversity, dating back to the 1980s. 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,” SVP and Chief North America Supply Chain Officer Marion Gross said in a released statement. “Collaboration is in our DNA as a brand – and through these industry-leading commitments with our supply chain, we’re able to create more equitable opportunities across the many industries that serve our communities. We look forward to continuing to lead well into the future.”
McDonald’s USA defines diverse-owned business as those owned by women and/or Black, Latinx, Asian, indigenous, veteran, LGBTQ+, and disabled persons. Company officials indicated that McDonald’s was unable to provide specific, updated data on its Black-owned suppliers at this time.
Company officials further stated in a release that initiative is tied to McDonald’s global ambition on DEI it developed last year “to advance a series of new actions including setting corporate employee DEI representation goals and aligning leadership accountability for meeting these targets, implementing actions to dismantle barriers and increasing the allocation of marketing spend to diverse-owned media, content and production partners.”
Diversifying and Expanding Partnerships
In recent months McDonald’s has announced recent moves to increase spending with a more diverse group of media companies after contending with legal action and protests critical of its treatment of Black franchisees and employees.
Its VP and Global Diversity, Equity and Inclusion Officer Reginald Miller maintained such actions have been endorsed at the top of the organization and that the recently-installed policies hold CEO Chris Kempczinski and corporate executive vice presidents directly responsible to champion core values, create cultures of inclusion and improve representation in leadership roles, in part, by linking 15% of bonuses to execution. “Our strategy was focusing on three pillars,” Miller says in an exclusive interview with Black Enterprise. “One, we represent the communities that we serve. Two, that we build a culture of inclusion and belonging, and three, we actively engage in dismantling barriers of economic opportunity. We see this mutual commitment to DEI as an opportunity for us to really leverage the McDonald’s system to in some ways go after all three. We see an opportunity for a ripple effect that showcases McDonald’s as a convener that pulls the business community together to really advance work in the DEI space.”
Among its largest suppliers to adopt the pledge – those included on its North America Supplier Advisory Council — include soft deink giant Coca-Cola; poultry, pork and beef processor Tyson Foods; multinational food services company Cargill; and global consulting firm Accenture. According to the agreement, these companies will be held accountable through the following guideline:
- Implementing an overall DEI strategy, including annual training for employees to develop as better practitioners and leaders in the space.
- Increasing overall representation of underrepresented talent in leadership and staffing of McDonald’s business as well as accelerating their use of diverse suppliers.
- Investing in innovation with new partnerships and programs designed to make a measurable difference in talent pipelines, succession planning and in communities where McDonald’s suppliers operate.
- Creating a process for accountability to track progress, share regular updates and best practices on effective programs and measurement.
“We are proud to be a part of McDonald’s Mutual Commitment to Diversity, Equity and Inclusion. 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,” said John R. Tyson, Chief Sustainability Officer at Tyson Foods in a released statement. “We are pleased to partner with McDonald’s to help the many people connected to our business feel more included and valued.”
Moreover, Miller expects that the MCDEI will help expand more businesses in size and scale to tackle larger corporate contracts in the same fashion as some of the BE 100s companies that can be found among McDonald’s Black-owned suppliers. In fact, one of its largest Black-owned vendors was BE Company of the Year Fair Oaks Farm whose CEO Michael Thompson heads its supplier diversity council.
“We’re taking somewhat of a methodical approach to this because supplier development should be part of any good B2B supplier diversity program as well, ” Miller asserts. “So our intention is to build businesses that can grow with us over time. A heavy component of how we look at this is both supplier development and supplier diversity, and I would say a third would be supplier engagement. We we have a long standing history with this.”
To support implementation of the MCDEI, McDonald’s is working with Supply Hive, a Chicago-based technology firm and certified minority-owned business, to provide resources and shared learnings to suppliers. The firm will also help track suppliers’ annual progress toward MCDEI objectives.