Volume 7 | Issue 6 | Year 2004

n the competitive food industry, becoming a supplier to Wal-Mart and McDonald’s is the equivalent of winning a grand prix. At Lopez Foods, that race has earned the company two of its most valued trophies: one of its biggest clients is Wal-Mart and its largest and most long-standing customer is McDonald’s. Such is the enviable status of Lopez Foods, the nation’s number one Hispanic-owned meat manufacturing company.

In addition to being a beef and sausage patty supplier to McDonald’s and Wal-Mart, Lopez Foods makes hamburgers and beef and pork sausage products under the popular brand names Northern Plains and Country Cousin. The company also co-packs products for well-known brand names like Tyson and Laura’s Lean.

The company was founded in 1991 by John Lopez, a 19-year veteran of the McDonald’s system. As Chairman and CEO, Lopez grew the company from $100 million in 1992 to approximately $400 million in 2003. Hispanic Business Magazine named Lopez its 2002 “Entrepreneur of the Year.” The company employs 700 associates in two plants, one in Oklahoma City and the other in Columbus, Neb. and its corporate headquarters in Oklahoma City. Recently, Lopez stepped down as CEO and replaced himself with Eduardo Sanchez, another executive with decades of experience in the McDonald’s system.

“We have about two dozen customers, albeit small and medium ones, but we have two very large ones: McDonald’s and
Wal-Mart,” said Sanchez. “They’re great customers with powerful brands and we strive to meet and exceed their needs every day. And through my personal experience, I know the McDonald’s system well, so I have a certain comfort level.”

Making history
Before John Lopez acquired the company, it all began in 1968 when Wilson Foods became a supplier of fresh beef patties for the McDonald’s restaurant system. In 1971, as the industry made the move to frozen beef patties, Anderson Meat and Provisions, Inc., a wholly owned subsidiary of Wilson Foods, built a plant in Oklahoma City to manufacture frozen beef patties.
In 1972, Anderson Meats worked with its core customer to develop the product specification for Canadian style bacon. In 1978, Anderson Meats became a producer of pre-cooked breakfast pork sausage patties. The Wilson Foods plant in Marshall, Mo., produced this new product.

In 1989, the company became Normac Foods, Inc. and in 1991 completed a state-of-the-art manufacturing facility in Oklahoma City combining its beef and pork operations under one roof. The Lopez Family purchased controlling interest in 1992 and in 1995 changed the name of the company to Lopez Foods, Inc.

Menu Options
In 2001, Lopez Foods, Inc. entered into a joint-partnership with Tyson/IBP and jointly purchased Carneco Foods LLC, a meat manufacturing plant located in Columbus, Neb. Carneco Foods manufactures frozen beef patties, beef chubs, and modified atmosphere packaging (MAP) fresh ground beef for fast casual restaurants, retail outlets, and the foodservice industry.

“The partnership with Tyson/IBP brought capabilities to the joint venture that increase competitive advantages, such as assured supply of raw materials, risk management expertise, technical experience, equipment design and installation skills, and facility maintenance support,” said Sanchez. “The Carneco raw patty lines are capable of producing a variety of sizes of beef, pork, and chicken patties to the customer’s exact specifications. Chubs of fresh and frozen ground beef are also available, as well as case-ready retail trays.”

The Oklahoma City facility is capable of producing a variety of different sizes of frozen beef and pork patties, pre-cooked sausage patties, and sliced Canadian style bacon, as well as a variety of promotional products such as chorizo crumbles and sliced ham.

Lopez Foods recently introduced the first all-beef breakfast patty. Said Tracy Brunner, a beef producer from Kansas, member of the Cattlemen’s Beef Board and chair of the industry’s Joint New Product & Culinary Initiatives Committee, this product launch is significant for the beef industry because beef has been underrepresented in the breakfast market. “The product is receiving terrific nationwide exposure,” Brunner said. “It’s a good alternative to other breakfast meats, and it’s easy to prepare and has excellent taste.”

The new beef breakfast patties are traditionally seasoned for a great tasting beef alternative to a favorite morning protein and are part of the Country Cousin brand product line. They are sold in the frozen meat section of Wal-Mart Supercenters nationwide.

Lopez Foods developed the new product after being asked by Wal-Mart to support one of its case-ready programs. Lopez Foods worked through the Mark of Quality Commission to apply for and secure rights to use the Mark of Quality, which is the industry’s stamp of approval for products that deliver the superior taste, quality and satisfaction consumers expect from beef. For a product to receive the Mark of Quality, it must surpass stringent quality criteria set and monitored by the industry’s Mark of Quality Commission, a nine-member panel of volunteer U.S. beef producers.

Extreme Measures
Lopez Foods ships finished products to any location in the country and the world, said Sanchez. Both facilities ship frozen product via climate-controlled trailers through independent carrier companies or in conjunction with customer partner distribution networks.

In order to produce and distribute quality meat products at the magnitude of Lopez Foods, stringent quality control measures must be in place. In fact, when Sanchez came on board, he was amazed at the depth of the company’s quality control.
“I didn’t expect to see a technology department as efficient and exacting as I found here at Lopez,” said Sanchez. “They keep track of every product as it’s labeled and scanned and put into our system. We know where every batch is at all times. We can trace product through our process right to our back door and from our customers back to our suppliers. Technologically speaking, that is one of the things we are able to do, and from my point of view it’s an amazing feat.”

Lopez Foods tests every batch of product for temp and for pathogens, said Sanchez. The company has its own lab at the Oklahoma plant. Additionally, company inspectors travel to the locations of approved suppliers of raw meat for annual inspections. McDonald’s inspectors usually accompany the Lopez team.

“We also have a USDA presence in our plant and we have an advanced system for checking the temperature of all products during transport,” said Sanchez. The company contracts with MBX, a national freight hauler. “We installed time-lapse thermometers that provide data about temperature readings so that we know the historical temperature of any batch as it travels from our plant to its ultimate destination.”

As for potential targets around the world, Sanchez is cautious about certain areas, but optimistic about the domestic market.
“The international business, especially in Latin America, is very volatile,” said Sanchez. “So we’re not looking at venturing into Latin America anytime soon. In the last few years in Brazil and Argentina, their currency has devalued over 200 percent. For a midsize company like ours, I don’t think that’s something strategically that we want to pursue. There are other venues like Western Europe and some Pacific-Rim countries that have potential. We will look at that, but first we have to exhaust the largest market in the world, the United States.”

And when it comes to the United States, not many companies can claim to hallmark brands like McDonald’s and Wal-Mart as its marquee customers. Moreover, with strong relationships with brands like Tyson Foods and Applebee’s, as a maker of high quality beef and pork products, Lopez Foods is solidly entrenched in the American economy and a valuable contributor to mainstream culture.

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