McDonald’s French fry supplier shuts down facility for surprising reason as fast food giant scrambles to up sales

A major supplier of McDonald’s french fries has shut down one of its facilities.

The fast food chain is known for its perfectly crisp, skinny french fries served on the side of a burger or chicken nuggets. They are beloved by customers, who have found hacks to get fresh french fries every time.

McDonald’s released the $5 value meal earlier this year after the company saw decline in sales during the second quarter of 2024 for the first time in over three years. The deal targeted lower income customers, who have been opting to eat at home as the price of fast food outpaces the price of groceries.

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The dip in sales has affected not just McDonald’s itself, but their supplier as well. Lamb Weston, the largest producer of french fries in North America, is closing a production plant in Washington state , according to CNN.

Along with shuttering the facility, it’s laying off nearly 400 employees, which is 4% of its workforce. Slower demand has caused them to temporarily cut production lines .

With more people eating at home, companies like Lamb Weston are struggling. Lamb Weston specifically has seen a decline because even when people eat at home, they aren’t likely to eat french fries . According to the company, 80% of french fries eaten in the US are from fast food restaurants.

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Lamb Weston CEO Thomas Werner said in a news release: “To drive operational and cost efficiencies, we are taking actions that include the permanent closure of an older, higher-cost processing facility and the temporary curtailment of certain production lines and schedules in our manufacturing network.

“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.”

McDonald’s has been able to draw some customers back with the value meal .

In the weeks following the meal deal’s launch in June, McDonald’s saw 25% of customers ordering the bundle , which was more than other restaurants with similar offerings, according to Restaurant Dive.

Science data also showed about 5% were new customers, and 12% who purchased the meal were customers who hadn’t visited a McDonald’s in three months .

It’s not doing the same for Lamb Weston, however. The meal deal is causing customers to order smaller portions , which still means less fries for Lamb Weston to produce.

“Many of these promotional meal deals have consumers trading down from a medium fry to a small fry ,” Werner said in an earnings call last week.

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McDonald’s is Lamb Weston’s largest customer, accounting for 13% of sales. According to its FY25 First Quarter figures, the company saw a net sales decline of 1% over last year.

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