Are Michigan McDonald’s About to Run Out of Fries?

It may sound extreme, but McDonald's biggest French fry supplier has shut down one of its factories, laying blame on the fast-food chain's recent meal-deal menu.

Lamb Weston is the largest producer of French fries in North America. According to a news release, the Idaho-based company has developed a restructuring plan to generate about $55 million in pre-tax savings. The restructuring includes closing its Connell Washing facility and reducing its global workforce. NBC reports that this restructuring means laying off about 375 employees due to the plant closing.

Today reports that McDonald's is responsible for about 13% of Lamb Weston's sales.

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Fewer Customers Opting for 'Large' Fries

Since May of this year, fewer McDonald's customers are opting for 'Large' orders of French fries - but it has nothing to do with health concerns.

Remember when McDonald's began offering $5 meal deals to appease customers who'd become outraged by the high cost of fast food? Those meals include smaller orders of fries, and that move set off a chain reaction, reducing American's French fry consumption nationwide.

McDonald's recently announced that the meal deal will continue through the end of the year. Other fast food giants like Popeye's, Pizza Hut, Taco Bell, Wendy's, Burger, King, and IHOP have all jumped on the bandwagon, creating meal deals designed to lure customers back into the fast food web.

Supply and Demand

Thomas Werner is the President and CEO of Lamb Weston. He says fast food chains' ploys to appeal to customers' frugality have resulted in a supply and demand imbalance.

"Many of these promotional meal deals have consumers trading down from a medium fry to a small fry," he said on a recent earnings call. "Restaurant traffic and frozen potato demand, relative to supply, continue to be soft, and we believe it will remain soft through the remainder of fiscal 2025."

So while it's unlikely Lamb Weston's plan closure will result in your local McDonald's running out of French fries, it does mean that fewer fries are being produced and consumed locally and throughout the US.