Developing fresh produce value chains for McDonald s Vietnam

Transcription

1 Developing fresh produce value chains for McDonald s Vietnam Asia Fruit Congress, 5 th of September 2017, Hong Kong Presentation by Siebe van Wijk

2 Content About us Fresh Studio at a glance McDonald s The Vietnam entry Top quality fresh The case of onion, iceberg lettuce and beef tomato Q&A Discussion

3 Fresh Studio About us

4 Fresh Studio at a glance China Professional services firm Strategic Management Consulting Research & Development Operations Value chain driven Myanmar Laos Hanoi Multi-disciplinary teams in Vietnam, Myanmar the Philippines: 80 staff 360 approach Yangon Thailand Cambodia Vietnam Located in Asia Vietnam offices: Hanoi, Dalat, HCMC, Vinh Long Myanmar office: Yangon Dalat Ho Chi Minh City Vinh Long Working in Philippines, Vietnam, Thailand, Indonesia, Cambodia, Laos, China, Malaysia and Japan Winner of Most Innovative and Most sustainable company of the year

5 Our mission Grow better lives from farmers to consumers, by making our clients successful in the production and marketing of sustainable food.

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7 Our value chain approach Production Processing & packaging Sales & distribution Marketing & communication 360 Production Processing & packaging Sales & distribution Marketing & communication

8 R&D Farms: crops & aquaculture R&D farms Da Lat: 1.5 ha R&D farm focusing on vegetables and potatoes Hai Duong: 1 ha R&D farm focusing on potatoes and corn Vinh Long: 6 ha R&D fish farm Develop and test New production methods, inputs, varieties and species. Determine value added for Vietnamese farmers Assist our clients in introducing these successfully tested new technologies to our clients

9 R&D in marketing: our food lab State-of-the art facility for fresh and processed food companies to provide valuable sensory evaluations of the market to develop food products and to make your products successful. Insights in: Shelf life, benchmarking, consumer acceptance, formula adjustment, product introduction, concept testing, line extension Food lab facility according to latest quality and hygiene standards (ISO) to demonstrate the importance of safety and quality related to food preparation

10 Proven track record with selected clients

11 The case of McDonald s Vietnam Top quality produce meeting the highest international standards

12 The CLIENT PRODUCT CHAIN VALUE CHAIN

13 About McDonald s Founded in 1940, California, USA Today 36,900 restaurants 375,000 staff 68 million customers per day Revenue US$ 25 billion Vietnam (96 million people) First new McD country opening in 15 years! First restaurant opened in Ho Chi Minh City in February 2014 Currently 16 restaurants in HCMC End of 2017, first Hanoi restaurant will open

14 The Vietnamese were curious to try

15 Three healthy items The three healthy items needed for a burger: Iceberg lettuce Beef tomato Onions McD started by in Vietnam importing all products except for fresh produce McDonalds contacted Fresh Studio to prepare the local sourcing Domestic sourcing preparations for fresh produce started in 2013 Phase 1: first five restaurants Whole head iceberg lettuce Phase 2: from restaurant number six Shredded iceberg lettuce

16 What steps were taken? Screening and selection of supplier The Fruit Republic was selected Strong QA system Experience with fresh cut production (fruit) BRC certified Screening and selection of iceberg, beef tomato and onion farmers Training of farmers in: Production protocol McDonaldsGAP standard Training of the supplier in: Production of shredded lettuce The McD system

17 Steps to become a McDonald s Supplier Generic Requirements Primary Requirements for ALL Food Suppliers Business administration related: Signed compulsory business agreements o CoC, NDA, BRCA o RM/FP specifications approved by McD o Branded product specification when applicable o Compliance with QA-SQMS requirements Supply Chain Food safety and Compliance related: SWA self-assessment completed Compliance with applicable laws and regulation relative to food production for where they are manufactured and distributed HACCP pre-requisites o Sanitation, GMP, Pest and Chemical control o Approval process for sources of supply o Allergen and sensitive ingredient control o Water, ice and gas quality control GFSI benchmarked certification or SQMS full/10 Core requirements audit conducted annually Nanotechnology policy Sustainable sourcing commitments Quality System related: Emergency key contact list and communication plan Shelf life validation whenever possible, per McDonald s shelf life protocol Approved rework policy Product transparency inclusive of ingredient statements, allergens and sensitive ingredients and calculated nutritional data Category Specific Requirements ASL requirements fulfilled o E.g. BSE Firewalls, GMP/HACCP, Biosecurity, VAS, Religious slaughter Documented/verified sourcing of raw material from an approved source Good Agricultural Practices for Produce/Agricultural products food safety o Farms are GAP audited o Production procedures in line with a recognized agricultural scheme Microbiological testing program where required Cook validation (for food safety) of raw protein products Compliance with list of globally excluded ingredients McDonald s recognized best practices/policies for: o o o o o Traceability Product salvage Foreign object detection (metal, plastic, glass, bone, etc.) Sifter (bakery) Potato storage practices Secondary Requirements for Core Product Suppliers and Permanent/Reoccurring Suppliers Demonstrated compliance with full SQMS, alternating core requirements (according to Audit Matrix ) SWA audit completion within 6 months of startup Approval of product from regional Quality Center (QC) following the product approval process (only relevant for core products) Sourcing of McD approved par-fry oil for core potato and poultry products Sustainable sourcing commitments such as MSC, Rainforest, Beef/Poultry, etc. Validated supply chain contingency plans Process defined for the selection, monitoring and assessing of raw material supplier performance Analyzed nutritional data provided for products produced Food security/defense program Global Food Vision compliance Sensory evaluation utilizing calibrated McD specific equipment such as grills, fryers, UHC/holding equipment for the preparation and evaluation of products following McD O&T manual. Geographic and/or Market specific Non GMO where required by the local market Certain geographic or market ingredient requirements, e.g. no artificial color/flavors

18 GlobalGAP, Organic, ETI, GRASP and BRC grade-a certified Lowlands: 4,000 m 2 temperature controlled pack house with 700 m 2 high care fresh cut facility Highlands: 1,500 m 2 temperature controlled pack-house, 5 ha modern greenhouses One distribution center in Hanoi and one distribution center in HCMC Successfully launched own brand in all top 10 supermarket chains in Europe and Vietnam 400 staff

19 McD: Fantastic supplier relation management Suppliers McD corporation Restaurant owners

20 The value chain for iceberg McDonalds GAP certified iceberg lettuce farms HACCP certified pack house with vacuum cooler Cold transport from pack house to processing facility BRC grade 1 certified fresh cut facility, MCD SQMS-12NNs and ETI certified facility Cold delivery from processing facility to MCD restaurants McD, Dakao, HCMC

21 Standards Relative comparision different standards Relative Number of control points A relative comparison of the 3 standards based on number of specific items/ control points they cover, which does not reflect the actual benchmarking between the standards.

22 Dalat production area for fresh produce Unique production area in Southeast Asia 50,000 ha of vegetable production 1,000 1,600 meters above sea-level Year round production possible Dry season: December till May Rainy season: June till November Temperate climate Day: 28 o C Night: 15 o C Currently the sector is moving from outdoor to indoor production

23 Dalat can develop in to regional McD supplier City Population in mln # McD rest # MCD rest per 1 mln Malaysia Thailand Dalat Singapore Hong Kong Philippines Taiwan Vietnam Myanmar

24 Dalat lettuce A wide range of lettuces are grown year round in Dalat: >3,000 ha..but iceberg was new and hardly locally consumed Only 15 ha of iceberg production in Dalat when we started Prices volatile, especially in rainy season.

25 Dalat climate data

26 One way to deal with the rainy season.. Completing domestic production with imports: onions

27 Year round onion supply program for McD Supply country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dalat, Vietnam New Zealand The Netherlands To ensure good quality onions in the rainy season The Fruit Republic started to import onions from New Zealand and the Netherlands Main aim for HORECA clients But also developed the market for Vietnamese end consumers

28 Introducing NZ onions to VN consumer

29 Don t make your product a commodity

30 Controlling the chain: in the dry and rainy season The case of iceberg

31 Iceberg farming: open-field Works well in the dry season But very difficult in the rainy season

32 But in rainy season: high production risk

33 Rainy season: production innovations required

34 Iceberg farming: indoor The Fruit Republic invested in 10 ha modern greenhouse facility. First 2 ha in production Producing Iceberg lettuce on hydroponics system Beef tomato Cucumbers for new McD menu item No more issue in rainy season

35 Biological control in greenhouse Farming in a greenhouse allows biological control Step by step developing a complete biological control program

36 Vacuum cooler Modern vacuum cooler Cools leafy vegetables in the best and fastest way Results in good shelf life

37 Shredded lettuce production line

38 Cutting of the iceberg lettuce

39 Strict quality control

40 Result.TFR-Vietnam no 1 in Asia-Oceania region Annual McD benchmarking review for Asia/ME/Oceania suppliers 2016

41 Lessons learned Volume forecasting was hard at first: For iceberg we need forecast of 3 months Beef tomato 6 months New country for McD, new restaurants Every 2 months a new restaurant Rainy season Hail storms Short term: contingency plans were prepared and worked: fly in from Australia Long term: greenhouse farming Solutions were always found Thanks to very good partnership with the McD Vietnam and the McD Global team

42 Who is next? Creating sustainable food value chains in Asia

43 Thank you! Questions Your challenges Ideas Next steps Contact Managing director (HCMC): Mr. Siebe van Wijk Contact R&D director (Hanoi): Mr. Ren é van Rensen /freshstudio freshstudioasia /freshstudio