Golden arches built on taste for success

Ray Kroc, founder of the McDonald's fast food chain, was a milkshake mixer salesman, but he saw life much like the farmers whose products he went on to create an annual US$23.5 billion ($46.1 billion) market for.

One of his favourite expressions was "Green and growing, not ripe and rot" and a worker spied idling was told "time to lean, time to clean".

Hard work bred opportunity, said Kroc, who was 51 when he flew from Chicago to California to find out why a hamburger shop owned by two brothers called McDonald wanted so many of his milkshake mixers.

Intrigued by their style of hamburgers, fries and milkshakes and food-handling and selling skills, he offered to partner them in expansion, and in 1954, aged 52, Kroc opened the first McDonald's outside California, in Des Plaines in his home state of Illinois. Sales that first day were a breathtaking US$366.12. Seven years later in 1961 Kroc bought out the McDonald brothers for US$2.7 million and in 1965 the company went public.

With McDonald's planning aggressive expansion in New Zealand in the next three years and a 500-tonne annual sales order placed last month for New Zealand angus beef, a visit to the headquarters of the golden arches brand in Oak Brook, near Chicago, courtesy of Fonterra - one of its big suppliers - was good timing.

Fonterra will not discuss its business with McDonald's but is believed to supply a quarter of its dairy requirements globally. In shifting its US and ingredients business headquarters to Chicago, Fonterra is clearly planning to get closer to the fast food giant.

McDonald's had no such reservations about sharing its business details with New Zealand food producers: It bought more than US$270 million ($383 million) of food from New Zealand last year, including sending 6000 tonnes of cheese to Australia, Asia, South Africa, the Middle East and South America; more than 24,000 tonnes of beef; 2600 tonnes of hoki to Europe, Asia, Australia and Hawaii; 18,000 tonnes of French fries to Southeast Asia and Australia.

In the same year McDonald's New Zealand bought 4.7 million kg of beef; 1 million kg of cheese; 1.5 million litres of milk; 15 million kg of potatoes; 13 million eggs; 200,000kg of hoki; 2.2 million kg of chicken; 66 million buns and rolls; and 12 million muffins. Fonterra subsidy The Pastry House is a major supplier of McDonald's bread and pastry requirements.

Kroc died in the 1980s. His legacy has been continued by his first grillman Fred Turner, initially as chairman and chief executive, now as honorary chairman.

It was Turner who in 1961 founded Hamburger University in the basement of a McDonald's restaurant in Illinois. Today the US$40 million Illinois university, one of six campuses around the world, sits in 32.5ha of parklike grounds beside the headquarters complex. Together they cover nearly 50ha of parks and lakes. No building is over tree-height. Degrees in food science, technology and process engineering along with management and leadership qualifications are taught in 28 languages.

Across a park is corporate headquarters, where the staff cafeteria is a McDonald's and McCafe outlet - staff have to pay the same as the public for their food. Inside are also chefs' test kitchens and management training retail outlets complete with drive-throughs. The equipment can be changed around so that a McDonald's management team from Hamilton or Paris can recreate their own premises in one day.

There are no doors and therefore no complete offices at headquarters - even chief executive Jim Skinner does not have a door on his office.

They love their pithy sayings at the kingdom of McDonald's.

After the business strayed off track into other restaurant chains and even video rentals, Skinner was heard to say: "We have taken our eyes off the fries."