In 1967, Idaho potato magnate J.R. Simplot shook hands with McDonald’s CEO Ray Kroc, sealing a deal that made Simplot the first frozen french-fry supplier to the fast-food chain. That deal brought billions of dollars to the Idaho economy.
Until then, McDonald’s had purchased only fresh potatoes. The J.R. Simplot Co. had supplied about 20 percent of the spuds that became McDonald’s fries, according to “Behind the Arches,” a 1995 book chronicling McDonald’s rise.
By convincing Kroc that frozen fries would deliver consistency and overcome a shortage of Russet Burbank potatoes in the summer — and that he could deliver — Simplot instantly became McDonald’s largest spud supplier. McDonald’s bought potatoes from other sellers as it expanded around the globe, but Simplot remains McDonald’s largest domestic potato supplier, said Dell Thornley, the chain’s director of global supply chain and sustainability.
A McDonald’s marketing video released Nov. 11 offers a glimpse into the Boise company’s role without mentioning Simplot. The video features a Glenns Ferry potato farmer, Mark Noble, discussing potatoes with two McDonald’s chefs. Noble sells those potatoes to Simplot for processing into frozen fries.
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Since the legendary handshake, Simplot has diversified and grown into an international agribusiness that grossed $5.8 billion in sales last year. McDonald’s remains its largest customer.
“Where we go, they go,” Thornley told the Idaho Statesman. “That’s exactly the reason Simplot is in places like China. They are really a valued partner.”
The partnership has also been profitable for the Noble family.
Allen Noble started selling Russet Burbanks to Simplot for McDonald’s for fries 54 years ago. The potato cultivar, sometimes called the Idaho Russet, is the most commonly grown potato in North America, in part because it handles processing and freezing well.
Allen Noble is still involved in Noble Farms, but today his son, Mark, 61, farms 1,500 acres of potatoes with a brother-in-law and a stepbrother. The video that features him is being shown in McDonald’s restaurants and on the company website and social-media pages
Noble said selling to Simplot has provided welcome stability in a volatile industry.
“When you deal with somebody for a long time, you know their history, and they know yours,” he told the Statesman. “It’s been very, very good to us.”
Noble said the family used to sell some of its potatoes to Ore-Ida, the frozen Tater Tot processor headquartered in Boise until 1999, as well as some to the fresh market.
“We don’t anymore,” he said. “We’re satisfied dealing with Simplot. It’s the road we chose to take.”
Noble said several of his nephews are in line to take over the farm. He expects they will keep selling to Simplot.
“We’re definitely exposing them to those relationships,” he said.
Simplot is not McDonald’s sole fry supplier. McDonald’s also buys from at least two other companies with Idaho operations.
One, McCain Foods, a Canadian company, is McDonald’s largest international potato supplier. It operates processing plants in Fruitland and Burley.
The other is Lamb Weston, which just spun off from ConAgra and established its headquarters in Eagle. Lamb Weston has processing plants in Twin Falls and American Falls that employ 1,300 people.
Simplot, McCain and Lamb Weston supply more than 70 percent of McDonald’s potatoes worldwide.
Simplot now has five plants in the U.S. making McDonald’s fries, said Keith Franzen, senior director of Simplot’s McDonald’s unit, based in Chicago. Those plants are designed to ensure that fries and hash browns are formed, precooked and delivered to look and taste the same at each restaurant.
One of those plants is in the Treasure Valley. In 2013 and 2014, Simplot laid off about 800 workers at potato processing plants in Caldwell, Nampa and American Falls and replaced the plants with a new, state-of-the-art plant in Caldwell that employs fewer people.
“Their attention to quality makes us be a better company,” Franzen said. “We worked closely with McDonald’s throughout the process in Caldwell. They were on-site and with us as we brought the plant online.”
Thornley, a Blackfoot native, worked as a Simplot agronomist for four years in the 1980s. After working with McDonald’s to develop a potato supply chain in Turkey, Thornley took his current position at McDonald’s making sure its restaurants in Europe have all of the spuds they need.
McDonald’s has long valued stable, longtime partners like Simplot, Thornley said.
“We have partners in the beef and bakery categories that go back to Ray Kroc,” he said. “Some of those relationships are going through their second and third generations.”
McDonald’s calls Russet Burbanks the “gold standard variety” for fries, but it has adopted nine other varieties overseas where Russets don’t grow as well, Thornley said. And breeders in Idaho, Washington and Oregon are working on new high-yield varieties called Clearwater, Umatilla and Ranger.
“Even in the Pacific Northwest, the Russet Burbank is not the easiest potato to get growing, and it has some weaknesses to it,” Thornley said.
Franzen said Simplot’s relationship with McDonald’s will enrich Idaho for years to come.
“I see nothing but upside for the J.R. Simplot Co. and Idaho,” he said. “We’ve continued to be able to grow together and work on new products and projects. I don’t see that changing in the future.”
Still no GMO fries at McDonald’s
McDonald’s does not use genetically modified potatoes, including Simplot’s line of Innate-brand potatoes. The potatoes, which received regulatory approval, are designed to reduce bruising and black spots, which increases storage capacity, and reduce a chemical that can become a carcinogen when cooked.
McDonald’s does not plan to adopt use of genetically modified potatoes, said Dell Thornley, the chain’s director of global supply chain and sustainability.
“That’s because of consumer acceptance, and, globally, because we need to be able to move products, and there are areas where genetically modified products aren’t allowed,” Thornley said.
Simplot has said Innate potatoes were designed for the fresh-pack market and, because they don’t brown when cut, they will be perfect for restaurants, caterers and large-scale food preparers who can save time by using precut spuds.
How Simplot gambled — and won — on making frozen fries for McDonald’s
J.R. Simplot did not build his small Boise into an international agribusiness powerhouse by playing it safe.
A 1995 book by John Love, “Behind the Arches” chronicles McDonald’s history, including the integral role Simplot played — and the risks he took to embed his company into McDonald’s DNA.
Simplot’s entrepreneurship started when he was a teenager, with a scrap metal business. He parlayed that into a pig farm, which he later flipped for a potato farm.
He produced the first dehydrated potatoes. Potato flakes were a novelty until the U.S. Army purchased all it could to turn into mashed potatoes to feed to soldiers. By the end of World War II, Simplot ran 14 dehydrated-potato plants. The Army’s demand for potato flakes ended with the war, costing Simplot his biggest customer.
In the early 1960s, Simplot supplied 20 percent of McDonald’s potatoes. At the time, McDonald’s could only serve Russets, which made the crispest fries, nine months of the year, because they spoiled in storage during the summer. Simplot invested $400,000 — worth more than $3 million today — to create a national network of cold-storage facilities.T
But the potatoes spoiled anyway, costing Simplot his investment.
He hatched an idea that would solve two problems: converting his dehydrated potato operations to frozen spuds to sell to McDonald’s.
Simplot pitched the idea to Harry Sonneborn, McDonald’s president. “He laughed at us,” Simplot recalled, according to the book. “The only thing he was interested in talking about was fresh potatoes.”
At the urging of a lower McDonald’s executive, Simplot approached McDonald’s CEO Ray Kroc with his idea.
“I told him that frozen fries would allow him to better control the quality and consistency of McDonald’s potato supply,” Simplot said, according to the book. “They were having a hell of a time maintaining potato quality in their stores. The sugar content of the potatoes was constantly going up and down, and they would get fries with every color of the rainbow.”
Kroc had already enlisted a food scientist with a decade of research at a Simplot competitor, Lamb Weston, now based in Eagle. He developed a process to quickly blanch and prefry and freeze potato products that did not rob them of their consistency, flavor or brown hue. Unlike previous frozen fries, these were crispy on the outside and fluffy on the inside. McDonald’s patented the process.
McDonald’s had previously approached Lamb Weston about producing frozen potatoes, but that company was unwilling to shoulder the financial risk of building a plant. Simplot was.
“Simplot was so convinced that his team could convert [the] process into a commercial operation that only a year after his cold-storage loss, he was ready to stake nearly 10 times as much on a new McDonald’s Gamble,” Love wrote. “On a handshake agreement with Kroc, Simplot invested $3.5 million to put the experimental frozen-fry process into a production line with the capacity to turn out 25,000 pounds of frozen fries in an hour. There were no guarantees.”
“Beyond the Arches” said Simplot was going to bet on frozen potatoes with or without McDonald’s.
“I figured, hell, if the old man didn’t take these fries, I would expand the plant for myself,” Simplot said. “It gave me a good excuse to build the kind of frozen french fries plant I wanted.”
The gamble paid off. In addition from increasing Simplot’s sales to McDonald’s from 20 percent to more than half of the chain’s potato demand, Simplot later modified the process, producing similar fries for Wendy’s and other chains. By the time Love’s book was published in 1995, nearly a quarter of the nation’s potato crop went to frozen fries, up from 2 percent in the 1950s. McDonald’s alone served a quarter of them.