Fast Food Nation

The economic fortunes of individual farmers or local

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Unformatted text preview: number-two fry company after buying Ore-Ida in 1997. Simplot, Lamb Weston, and McCain now control about 80 percent of the American market for frozen french fries, having eliminated or acquired most of their smaller rivals. The three french fry giants compete for valuable contracts to supply the fast food chains. Frozen french fries have become a bulk commodity, manufactured in high volumes at a low profit margin. Price differences of just a few pennies a pound can mean the difference between winning or losing a major contract. All of this has greatly benefited the fast food chains, lowering their wholesale costs and making their retail sales of french fries even more profitable. Burger King’s assault on the supremacy of the Mc-Donald’s french fry, launched in 1997 with a $70 million advertising campaign, was driven in large part by the huge markups that are possible with fries. The fast food companies purchase frozen fries for about 30 cents a pound, reheat them in oil, then sell them for about $6 a pound. Idaho’s potato output surpassed Maine’s in the late 1950s, owing to the rise of the french fry industry and the productivity gains mad...
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This note was uploaded on 02/25/2014 for the course MGMT 120 taught by Professor Litt during the Spring '08 term at UCLA.

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