McDonald’s on Thursday said that it will increase spending with diverse-owned suppliers by nearly 10% between now and 2025 and that it has received commitments on diversity from 20 of its largest suppliers.
The effort is an outgrowth of a commitment to diversity the Chicago-based burger giant made last year, and is meant to use its $14 billion supply chain as a force for encouraging improved diversity among a broader set of companies.
McDonald’s said it would spend $3.5 billion with diverse-owned suppliers by 2025, nearly a quarter of its annual supply chain spending and up from 23% now. The company said it currently works with more than 385 diverse-owned suppliers in the U.S.
“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, McDonald’s chief North America supply chain officer, said in a statement.
The commitment comes two months after the company said it planned to increase spending with diverse-owned media by 2024. That commitment came in the face of a lawsuit from The Weather Channel owner Byron Allen saying that McDonald’s only spent a fraction of its ad budget on Black-owned media companies.
It also comes as McDonald’s faces challenges from a number of angles on its treatment of Black Americans in particular—the company is fending off lawsuits from current and former franchisees as well as from former executives. One of the franchisees’ lawsuits was recently dismissed.
McDonald’s a year ago promised to bolster diversity within its system and in February said it would tie executive bonuses to diversity goals. It also hired a new global chief diversity and inclusion officer in Reginald Miller.
Much of the effort is aimed at the supply chain and pushing the companies with which it works to improve their diversity hiring.
The company and 20 of its largest suppliers joined the “Mutual Commitment to Diversity Equity and Inclusion,” or MCDEI. The companies making this commitment promise to improve their own cultures of inclusion and belonging and dismantling barriers to economic opportunity. McDonald’s is starting the pledge in the U.S.
The company said the effort to spend more of its advertising with Black-owned media was part of that commitment to boost spending with diverse-owned suppliers.
In making the commitment, the suppliers who made the MCDEI pledge agree to implement an overall diversity equity and inclusion (DEI) strategy, including annual training. They also vow to increase representation in leadership and staffing and accelerate their use of diverse suppliers.
They also commit to invest in programs designed to make a “measurable difference in talent pipelines, succession planning and in communities” where the suppliers operate. And they commit to create a process to track progress, share regular updates and best practices.
McDonald’s is working with Supply Hive, a Chicago-based technology firm that will help track suppliers’ progress toward the effort.
Among the suppliers that have made the commitment: Accenture, Alma, Baker McKenzie, Burrell Communications, Cargill, CPH Inc., Ecolab, Elkay Interior Systems, Everbrite, Fair Oak Foods, Flavor Reddy Foods, FordHarrison, Greenberg Traurig, HAVI/The Marketing Store, IW Group, New Horizons Baking Company, Omnicom Group, Perrino & Associates, Schreiber Foods, Tyson Foods and Wieden+Kennedy.
“These commitments allow us to dismantle barriers to economic opportunity in far-reaching ways,” Miller said in a statement. “As a values-based organization, we are compelled to do our part to make the world more equitable, and the absolute best way is to leverage our size and scale through our value chain.”
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