McDonald’s boosts cherry sales
The fast-food chain could use 3 million pounds of maraschino cherries a year.
Since McDonald’s rolled out its new milkshakes earlier this year, the U.S. cherry industry is “lovin’ it.” Sitting like a crown jewel on top of the McCafé shake, on a pillow of whipped cream, is a bright, red maraschino cherry.
The simple act of the restaurant giant topping their milkshakes with a cherry has caused excitement in the industry. A new market for any type of cherry is welcome news, said Cheryl Kroupa, marketing director for the National Cherry Growers and Industries Foundation.
“For most consumers, a cherry is a cherry, and whenever we have cherries prominently displayed, it’s a positive thing,” she said, noting that it encourages sales and reinforces consumer purchases. The Cherry Growers and Industries Foundation exists to promote maraschino, canned, and frozen cherries and is supported through contributions from growers and processors of sweet cherries from California, Oregon, Washington, Utah, Idaho, and Michigan.
The new McCafé shake is an upgraded, branded milkshake, sold in a clear plastic cup with a domed lid, that’s been in the works for more than a year, said Tom Klevay of Diana Fruit Company, a maraschino cherry processor in Santa Clara, California. Diana Fruit, in the cherry brining business for 85 years, focuses on the foodservice market segment and has a long relationship with McDonald’s. Diana Fruit worked with the fast-food chain about ten years ago to put cherries on top of a McDonald’s promotional item, the hot fudge brownie.
Klevay, vice president of sales and marketing, said that the brownie was an optional menu item, sold in some stores though not all. But the McCafé shake is different. It’s available in all 14,000 McDonald’s restaurants in the United States and has been widely promoted with advertising, banners, and point-of-sale materials. Klevay said McDonald’s strategy is to build its sales of branded drinks.
“Of course, when one of the originators and world leader in quick-serve foods decides to put a cherry on top of their milkshakes, that’s music to the cherry industry,” he said in a phone interview with the Good Fruit Grower. “And if you’re in the business of maraschino cherries, it’s really good news.”
It’s taking three West Coast cherry briners—Diana Fruit, Gray and Company, and Oregon Cherry Growers—to service the new cherry needs of McDonald’s.
And even better news is that the cherries being used by McDonald’s are stemless. Klevay explains that the stemless maraschino cherry is always a tougher sell than the iconic stem-on maraschino cherry. Of their sales, about 90 percent of their customers want stems on.
“Part of the challenge in the industry always has been what to do with the stemless cherry,” he said, adding that a few outlets include ice cream, glacé, and candy products. “It always seems that there’s more stemless, plain fruit than there is demand. It’s inherent in the process that not all cherries keep their stems on. We tend to get more stemless cherries in some regions than others." Also, the harvesting technique of mechanical or hand picking can impact how well the stem stays on.
Klevay estimated that the new use by McDonald’s would translate into about three million pounds of finished product annually, or around 200,000 cases (15-pound cases). “Three million pounds sounds like a lot. It is and it isn’t, but year after year, it could really add up.”
He sees the new use as a way to find a home for what’s considered a byproduct of brined cherries.
“My hope and prayer are that the cherries do what McDonald’s anticipates they will do—make their milkshakes more attractive and lead to more sales,” Klevay said. “And that we’ll be doing this for a long time.”
While he declined to specifically say how it might influence grower prices for briners, he predicts it will help take some downward pressure out of the pricing structure. In the brining market, grower prices tend to go down when there is oversupply or uncertainty in where the product will be sold. It should help shore up prices because processors will know where the stemless cherries are headed, he said.
“Everyone would always like higher prices, but pricing is a balancing act between the market value and supply. This helps put demand where there wasn’t demand before. And that’s positive,” he said.
Klevay said it’s rare to see growth in what he calls the “pie” or demand. Occasionally, they will see incremental demand that goes up or down, depending on the season or a specific promotion. “But this is truly an addition to the pie—a new customer—when McDonald’s decides to use cherries.”
Dana Branson, head of the Oregon Sweet Cherry Commission, annually compiles statistics on production, acreage, utilization, and exports of U.S. sweet cherries on behalf of the Northwest Cherry Briners Association and the National Cherry Growers and Industries Foundation.
Cherries are a volatile crop, extremely sensitive to weather. The last five seasons have seen major swings in annual production of U.S. cherries. The low was 248,000 tons in 2008, followed by a record high of 443,000 tons in 2009.
The amount of cherries that are brined each year reflects the yo-yoing effect of fresh cherry production. In the last five years, 60,000 tons were brined by U.S. processors in 2006, according to Branson. But in 2010, preliminary reports show that only 40,350 tons were brined and made into maraschinos. The five-year average brined cherry pack, from 2006 to 2010, is 49,130 tons. For the brined U.S. cherry pack, figures are based on unpitted, unstemmed fresh fruit weights (unfinished product).