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Talks are underway between McDonald’s New Zealand and the country’s arable industry to see if there is a way for the restaurant giant to use locally grown grain for its burger buns.
McDonald’s currently sources its grain from imported Australian wheat. It is processed in Auckland for bun making.
FAR general manager of business operations Ivan Lawrie said that with the New Zealand Grown Grains website and certification programme now in full flight, McDonald’s and its suppliers have a genuine opportunity to make true on their claim to support NZ growers.
Lawrie said the arable industry has tried – unsuccessfully – to engage with McDonald’s in the past on getting it to use NZ-grown grain and is hopeful this engagement will lead to better success.
One of the barriers in the past has been economics. McDonald’s can get Australian-grown wheat landed in Auckland for a lower price than locally produced wheat.
At $645 a tonne for New Zealand wheat, Lawrie calculated it would cost around 3.4 cents excluding GST to make a 66-gram bun containing 40g of flour, or 52.6g of wheat.
For a $6.52 Quarter Pounder burger, that 3.4 cents of the grower’s wheat would equate to 0.5% of the value of the burger, he said.
“The actual savings are almost negligible in terms of the end product that they are selling. There is less than 4c of wheat contained in a hamburger bun.
“Even if the price of wheat went up 50% for the grower, that would mean in the hamburger bun it would go from 4c to 6c.”
There was no issue with quality or consistency of supply.
The industry produces around 100,000 tonnes of milling wheat a season, which could increase if less feed wheat was produced, he said.
Having McDonald’s as a customer would be a huge boost for an industry low on confidence and struggling with profitability.
“If you could give surety to a group of growers that year in, year out, the demand for that particular wheat will be there, and arrange some long-term pricing arrangements that satisfied both parties, that would mean a huge amount to our growers because that would put them in a position where they are not relying on the volatility of the market all the time,” he said.
The cost of the bun, which has little effect on the end value of the hamburger, would increase a growers’ income by 50%, he said.
It would also add further credence to McDonald’s claim to use locally made products.
“It would complete the story, and we would be able to certify their products under the New Zealand Grown Grains certification trademark.”