The Hildebrandt family operates an 800-cow dairy farm on a nondescript rural road just on the Illinois side of the Wisconsin border, about 10 minutes east of Beloit.
The cows here will produce 50,000 pounds of milk each day, enough to fill a tanker truck, which brings the milk to a Dean Foods facility about 17 miles away. Within 48 hours, that milk will be processed and bottled and shipped to McDonald’s Corp. locations within a 150-mile radius.
The Hildebrandt farm is one of 42,000 farms in the U.S. that represent the first link in a massive supply chain that provides the world’s largest restaurant company with the ingredients needed for Egg McMuffins and Big Macs.
This supply chain that has traditionally come under scrutiny from the company’s critics, who see it as a symbol of unhealthy, manufactured food. Lately, however, the supply chain has come under scrutiny from the company itself, which is trying to break away from that criticized image.
In recent months, McDonald’s has turned its supply chain on its head, pushing suppliers to raise egg-laying hens outside of cages and to remove artificial ingredients from Chicken McNuggets. This year, the chain quietly changed the formula for soft serve ice cream, removing artificial ingredients there.
The Hildebrandt Farm felt little of these changes. “We do the same things every day,” Amy Hildebrandt said. “Our focus is on the cows.”
On the farm
Ken Hildebrandt is a fourth-generation farmer. He runs the farm with his wife, Amy, and his brother, Don.
Ken and Don’s parents were farmers in Buffalo Grove, Ill., outside of Chicago, in 1978 when they sold their land to developers and bought this farm near Beloit — where such sprawl seems doubtful, at least in the short term.
The farm doubled in size earlier this year, after Ken and Amy’s four children, who range in ages from 19 to 26, said they, too, wanted to continue the family business. The family works here, along with a dozen employees. In addition to the dairy cows, the farm raises calves and the family owns 2,000 acres, mostly to grow feed for the cows.
The farm runs every day, seven days a week, 365 days a year. “That’s the problem with cows,” Ken said. “There’s no turning them off.”
That the Hildebrandt farm is a family operation is hardly unusual — 95 percent of the 42,000 farms in the McDonald’s supply chain are family owned, the company says.
For a facility with so many cows, there is remarkably little mooing; this is a sign of contented bovine. The cows here are closely monitored — a nutritionist routinely checks the cows and the feed and makes recommendations based on their needs. Cows are brought in groups of 200, and each cow is milked twice a day, and produces about 80 to 85 pounds of milk daily.
Every cow has an ear tag, with an identification number, enabling the farm to tell how much milk she produces along with her genetics, such as her mother and her father. The cows are brought to the milking facility, the new building the family opened in March of this year, after spending a year building it. The facility is a simple, large, white building with green trim. Inside it is a technological marvel long removed from the days when milkmaids squeezed the milk into metal buckets.
Cows are brought into a holding area near a large, rotating milking carousel at one end. The machine has 40 bays, and each cow quietly enters a bay on her own, eager to dispense with the 40 pounds of extra weight she’s carrying in her udders.
The udders are washed and hoses are attached. A computer underneath the stall tracks the cow’s number and the amount of milk produced. The cow will be fully milked by the time she has finished her revolution in the machine about eight to nine minutes later. If she is not done, the machine will stop until she finishes.
A computer screen off to the side monitors the cows and the milking. The hoses detach from the udders automatically, and when the cow has finished her revolution she exits into another holding area.
It takes an hour for the facility to milk 200 cows.
The milk is piped into another machine where it runs alongside recycled well water that cools the milk before its sent to a chiller that cools it further, instantly getting the milk to 38 degrees. Any warmer and the milk can’t be shipped out of the dairy.
Once the refrigerated tanker is full, the product is trucked to the Dean Foods facility.
Supplier cooperation
Most of the milk will end up in 8-ounce bottles. McDonald’s sells 282 million of the little bottles of milk per year, 186 million of which will be chocolate. The rest is white.
Some of the milk will also go into the chain’s ice cream. Indeed, dairy touches 80 percent of McDonald’s menu items, making it a vital ingredient, said Jennifer Mertz, manager of McDonald’s U.S. supply chain. That includes cream for the coffee, or shakes, or the cheese on top of the Filet O’ Fish sandwich.
Dean Foods, based in Dallas, is one of 11 dairy suppliers. “We have a great relationship with McDonald’s,” said Anthony Sawchuk, national account director for Dean Foods, who manages the company’s business with McDonald’s.
For much of its history, McDonald’s left the dairy supply chain up to local and regional restaurants. That changed in the 1990s, Mertz said, when the company realized it could manage that supply chain in-house — taking advantage of its size and scale to win better deals, and ensure a consistent product across the country.
The supply-chain relationship has been tested more recently. McDonald’s, intent on changing its image, has worked to shift its supply chain to improve living conditions for livestock and to remove artificial ingredients.
The company started putting real butter on its Egg McMuffins. It shifted to all cage-free eggs. Last year, it removed artificial ingredients from its Chicken McNuggets.
Many of these moves proved fruitful. McNuggets sales increased 10 percent after the chain took the artificial ingredients out of them.
“Our consumer is telling us that’s what they would like us to do,” Mertz said.
Younger consumers, as well as parents — two of McDonald’s primary consumer targets — have been looking for better ingredients out of their restaurants in recent years. Restaurant chains have been pushing their supply chains in this direction as a result. But few have the impact of McDonald’s.
And Mertz indicated that its effort to improve the supply chain isn’t done. “We’ll have some great news coming out in 2018,” she said.
The effort to improve the supply chain focused on dairy starting last year when McDonald’s decided to remove artificial ingredients from its ice cream. Soft serve is an important ingredient at the company — 60 percent of the chain’s desserts feature its ice cream.
McDonald’s initiated the effort with its dairy suppliers. The chain makes its dairy suppliers cooperate with one another. “We expect our suppliers to work together,” Mertz said. That means sharing best practices and money saving ideas.
It also means working together on the ice cream formula change. Dean Foods led the effort on developing the new formula and ensure the product could be produced. The entire process was completed in short order, especially for such a large chain.
“Start to finish to quality check was three months,” Sawchuk said. “It was very quick.” McDonald’s began changing the soft serve at the store level last fall and completed the shift earlier this year.
Quality checks
McDonald’s, as part of its effort to improve its image, has been showing off its farms a bit more often recently, while revealing its supply chain more publicly.
Mertz has helped infuse McDonald’s with more nutritious items in recent years, including apples, Cuties, Go-gurt and oatmeal. “I helped make the menu be better for the consumer,” she said.
Now, she’s helping with the effort to improve the company’s existing menu items. So she spends a lot of time on the farms in the McDonald’s supply chain, and works closely with Wendy Uhls, the manager of quality assurance — who helps make sure the food being produced for McDonald’s menu items meets the chain’s standards.
It also means they have more sensitive taste buds by now. “Wendy is better at it than I am, but I can pick it up” when a cow has gotten into something she shouldn’t have, Mertz said. “If a cow has had eight onions in the field, you can taste that in the milk.”
Contact Jonathan Maze at [email protected]
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