Sounds odd? Not to me. It’s all in how you look at fry sales and frozen potato shipments. At least that’s what a recent CNBC market look-in suggests: rising fry sales may indicate an overall strengthening of the economy…
McDonald’s Medium Fries: Chain’s second-most-profitable menu item bounces back!
French Fry sales are reported to be strong these days. Stronger than even before COVID19 threw the restaurant business into the deep shade in 2020. And that has some observers deigning to crack a smile.
The Fry Attachment Rate
This is the rate at which Fast Food diners opt in favour when confronted with the ubiquitous question: “You want fries with that?” Some industry observers note the Fry Attachment Rate (FAR) tumbled over the COVID Era. Possibly because folks wanted to save a buck or two on food whenever they could.
Now, though, the FAR has bounced back, with diners collectively ordering more fries than before COVID.
Lamb Weston Holdings (LWH) is a leading supplier of frozen french fries in the US. Their figures tell an interesting tale.
“The global frozen potato category continues to be solid with overall demand and supply balanced,” LWH CEO Tom Werner told analysts on the company’s quarterly earnings call last Thursday. “[The] Fry Attachment Rate, which is the rate at which consumers order fries when visiting a restaurant or other food service outlets across our key markets, [has] remained largely steady and above pre-pandemic levels.”
Citing consumer stressors
Economists explain, when consumers feel stressed, they cut back on items perceived as extras, or frills. It appears that ‘skipping the fries’ was a major, mass response to the economic stresses presented by the COVID Crisis.
Inflation was also cited as a major force affecting fry sales. “We suspect that restaurant traffic trends will be volatile in the near term as high interest rates, high inflation and uncertainty continues to affect consumers,” Werner said. “That said, frozen potato demand has proven resilient during the most challenging economic times, and we continue to be confident in the long-term growth prospect for the global category.”
Fast Food operators cheering
No one is cheering the bounce-back of fry sales more than the Fast Food resto operators. As I’ve related in previous posts, fries are second as profit generators only to fizzy fountain drinks and coffee.
According to the website enterpriseappstoday.com, fries are McD’s single biggest selling menu item: “The restaurant sells around 9 million pounds [4 million kg] of French fries each day and around 3.29 billion pounds [1.49 billion kg] each year.”
McDonald’s says each order of Medium Fries weighs 114 g. So 9 million pounds / 4 million kg of fries makes about 35,087,719 orders. And each order sells for (US)$1.79. That’s a combined daily global revenue of (US)$62,807,017. Annually, it comes out to an almost unimaginable (US)$19,474,561,403. !
And remember, that’s just fries…
~ Maggie J.