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In a shocking turn of events, Lamb Weston, the largest producer of French fries in North America and a major supplier to McDonald’s, has abruptly closed one of its key French fry production facilities, resulting in significant job losses. The closure has sent ripples through the fast-food industry and raised concerns about potential disruptions to McDonald’s iconic French fries supply chain.
Lamb Weston announced the immediate closure of its factory located in Connell, Washington. This facility was responsible for producing a substantial portion of the frozen French fries supplied to McDonald’s restaurants and other customers across the region.
This news comes as customers pull back from spending their money on fast food due to rising prices, and now, an increasingly falling demand for fries.
Tom Werner, president and CEO of Lamb Weston, which is the supplier of 80% of the fries sold at fast food chains across the US, blames the falling demand on value meal deals, saying:
“Many of these promotional meal deals have consumers trading down from a medium fry to a small fry.”
Weston said in a statement: “Together, we expect these actions will help us better manage our factory utilization rates and ease some of the current supply-demand imbalance in North America. We are also taking actions to reduce operating expenses, including reducing headcount and eliminating certain unfilled job positions, as well as reducing capital expenditures. The combined estimated savings from these actions are reflected in our updated fiscal 2025 targets.”
The sudden shutdown has led to the layoff of approximately 375 workers, representing 4% of Lamb Weston’s workforce, according to an earnings report released last week. This unexpected loss of income has left many families in the local community reeling. Local officials have expressed concern about the economic impact on the area and are working to provide support for affected employees.
Werner continued:
“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.”
McDonald’s has been having a scandalous week as the chain announced a lawsuit against four meat suppliers including, Tyson for fixing the prices of their meat and colluding amongst each other to do it.
