In an effort to escape its junk-food image, McDonald's, the company that built its success on fries and burgers, now buys more apples than any restaurant chain in the US. This also gives it enormous power over growers - which could lead to fewer varieties and fewer small producers. Gary Younge on how the golden arches could revolutionise an entire industry.

Wednesday March 23, 2005
The Guardian

Turn your back on the rack of leaflets, printed on acid-free recycled paper and entitled Taste, Choice and Balanced Eating, in the McDonald's restaurant in Yakima, Washington state, and you can take your pick from the menu of items that cost a dollar or less. Right at the bottom, underneath the double cheeseburger, the sundae, three cookies and two pies, come the 99-cent Apple Dippers - around 10 cold, crisp and slightly watery peeled apple slices, packaged in plastic with a small carton of sickly-sweet caramel dip that contains twice as many calories from fat as the slices themselves, as well as disodium phosphate, potassium sorbate and caramel colour.

McDonald's, which launched the Apple Dippers last year, now buys more apples than any other restaurant chain in the United States. And if the product, not to mention a forthcoming McDonald's apple salad, takes off, it has the potential to transform an entire agricultural industry. The chain's influence could alter for ever the method and scale of production, the varieties of apple produced, and the rights of the thousands of workers who pick them, and not necessarily for the better.

"McDonald's makes a huge impact, not because they are deliberately out to screw the food system, but because they are so massive, and because they demand a uniform product," says Eric Schlosser, author of Fast Food Nation, a damning critique of the industry.

With 13,700 restaurants in the US, McDonald's is one of the country's biggest employers: roughly one in eight Americans is estimated to have worked for the company at some stage in their lives. It is already the largest buyer of beef, pork and potatoes, and the second-largest buyer of chicken. With volume comes clout: last year, at an apple-marketing conference organised by the US Apple Association, McDonald's director of quality systems announced that if growers wanted to work with the company, they would have to cultivate more of two varieties of apple in particular: cameo and pink lady. Already, the cameo crop in Washington state is 58% larger than it was last year, according to growers in Yakima Valley.

The interest of McDonald's in healthy eating is not altruistic: it is partly a case of rebranding and partly a defensive manoeuvre against the future possibility of obesity lawsuits. Two years ago, the chain shut down outlets in 10 countries, became the focus for intense anti-American sentiment around the world, suffered stagnant sales in the US and was taken to court by a few overweight New York teenagers. (The teenagers' lawsuit was originally dismissed, but then reinstated on appeal in January.)

"McDonald's are worried about becoming the next Philip Morris," Schlosser says. "All you need is the right group with the right lawsuit and it could really hurt McDonald's. They are very vulnerable."

With around one third of Americans now obese - twice as many as in 1990 - it will soon become the top killer in the country, according to the federal Centres for Disease Control. A report last week showed that obesity among children, McDonald's target demographic, is so extensive that it could reduce the nation's life expectancy in the next generation by between two and five years. "Childhood obesity is like a massive tsunami headed toward the United States," says paediatric endocrinologist David Ludwig, director of the obesity program at Children's Hospital in Boston and one of the study's authors. "We're in the quiet before the storm. It's like what happens if suddenly a massive number of young children started chain-smoking. At first you wouldn't see much public health impact. But years later it would translate into emphysema, heart disease and cancer." This is exactly the kind of comparison that makes companies such as McDonald's shudder. Those who sued cigarette companies, after all, were also once ridiculed as opportunists. (Despite several calls over five days, McDonald's failed to provide comment.)

The company knew that if it wanted to keep its business healthy, it would need a makeover. Five months after the lawsuits were filed, it started serving more salads, directing the marketing at women. The fact that, when you threw on the dressing, a Bacon Ranch salad with crispy chicken offered as much fat as a quarter-pounder with cheese and regular fries was beside the point. In Britain, the company has recently launched a range called "salads plus", which includes peeled, washed carrot sticks in a small plastic bag, and a "fruit bag" of grapes and slices of apple. This week it has been prominently advertising in national newspapers its "Happy Meal Choice Chart", which is "packed with practical advice and nutritional information" to "help you make the choice that's right for your child". The purpose of all this is clear: it wants people to feel better about going to McDonald's and letting their children eat there.

Sitting in his office in Kennewick, about 100 miles from Yakima, Hermann Thoenissen describes his perfect apple with the tenderness he might use to describe an ideal lover. "It has to be crisp," says the area director of apple orchards for AgriNorthwest. "It should be bi-coloured. Red striped with a yellow background or yellow with a bit of pink. It has to be juicy. I want it sweet, and just under three inches."

The cameo apple comes close to his notion of perfection. He thinks it's no surprise that McDonald's would pluck cameos from its many rivals as an ideal fruit. "It keeps its crispness for a long time if it's kept in the right atmosphere, and it doesn't turn brown easily."

Thoenissen grows about 200 acres of cameos, making him the second-biggest grower of that variety in the state. Given that only 13 years ago no cameos were produced in Washington at all, this is an impressive number. But even then they comprise only 10% of his overall apple crop, which is in turn less than 8% of the AgriNorthwest's entire production, which includes corn, sweetcorn and wheat. Cameos still occupy less than 5% of the acreage of golden delicious.

McDonald's entrance into the apple sector has made a difference, but it has yet to cause a revolution in the apple industry, because growing apples is a time-consuming business. "If I decided to put in some apples today, the grafting and the rootstock would take three years alone," Thoenissen says. "Then it would be another three years until you saw any apples, and five until we were on full production." That makes predicting the future success of Apple Dippers a pitfall-prone business, says Desmond O'Rourke, economist and publisher of World Apple Report. "It would be very risky for any apple producer to change their crop now on the basis of what McDonald's might be doing in six years time."

But as time goes on, if the demand for apples from McDonald's holds steady, the growers will gladly uproot their golden delicious, which are easy to grow but increasingly difficult to sell. Cameos are the opposite, which is why relatively few have been produced up until now. "Cameos are prone to the most devastating diseases like fire blight," says O'Rourke. "You have to keep bending the branches, and then, if left alone, it's the kind of apple that might skip a year. So you have to treat it right."

All of this - the pesticides, the storage, the waiting, the machinery - makes apples rather capital-intensive. In order to make money, you must first invest heavily, and then be prepared to wait a good while - in precarious conditions, governed as much by the weather as by inflation or interest rates - for your return. The larger your business, the easier it is to weather those storms, both figurative and actual. Over the past 25 years farms have grown in size and diminished in number. "In 1980 there were about 4,000 apple growers in the state," says Thoenissen. "Today that number has gone down to around 2,000. And the size of the average farm has increased. The small farms are going to have been having a very difficult time. It's all about access to capital."

Big retail buyers such as Wal-Mart and Safeway have already started this process. Experience in other sectors suggests that, at some stage, the balance of power shifts, and the buyer dictates the terms. Already, retailers demand an apple that is 3ins in diameter - the optimum size to maximise the number that can be displayed within a square foot, while remain appealing to the consumer.

The entry into the market of McDonald's, which prides itself on the fact that its meals taste the same wherever you are in the world, will only accelerate this trend towards uniform mass consumption. The bigger a producer, the greater the likelihood that McDonald's will want to do business with it because it will be able to provide everything the chain needs. "It will want large volumes of uniform apples that have to be the same variety and the same size," says O'Rourke. "And it wants to deal with large shippers who can produce those numbers."

Back in the early 19th century, John Chapman, an eccentric loner, roamed the frontier states of Ohio and Indiana, planting apple seeds ahead of forthcoming settlers, so that he could later sell them orchards when they arrived. Johnny Appleseed, as he is now known, ascended into US folklore: an all-American blend of pioneer, entrepreneur and religious fanatic. (Apples were produced then primarily to drink as cider; it was just about a century later that the industry launched its famous slogan, "An apple a day keeps the doctor away," helping transform the apple into something primarily eaten, and thereby saving it from Prohibition campaigners.)

Before the 19th century was out, in 1889 a man named Alfred Johnson left his native Sweden and came through Ellis Island to the New World. He made it across the country to Seattle, where the railroad company was offering free trips to Yakima for new settlers. Alfred took the trip over the Cascade mountains, and bought five acres to turn into an orchard.

More than a century later, his great grandson, Eric, is still on site, tending what is now 65 acres of tree fruits, including peaches, nectarines and cherries, and 10 acres of apples. The farm's motto is "Same family, same location, 100 years." The Johnsons have had the same Mexican family, the Guiterrezes, working for them for three generations. And Johnson sells most of his produce in much the same way that his great-grandfather did. "We pick them, we wash them and most of them we sell right out here, fresh," he says, pointing to his porch. "My grandfather used to say that he wouldn't sell anything he wouldn't eat personally."

But the Johnsons don't grow so many apples any more. As farming became more industrialised, the margins became too narrow, unless you were producing the kind of volume that would make it worth your while. "I used to grow more apples, but we had to cut back because we couldn't make enough profit," he says. "The big factories can make it on the packing end. But the grower is at the end of the food chain. At some point, there's going to be just 10 producers who are going to swallow everybody else up."

McDonald's may be part of that trend, Johnson agrees; he knows a lot of other small producers who invested too heavily too quickly, and have gone under, usually as a result of excessive debt. But at this stage, he says, anything that gets Americans eating more apples has to be good. And the consolidation trend may even end up helping him: he feels that, the more farming becomes industrialised, the more his fourth-generation family business develops a unique selling point. "We let people walk through the orchard. We let the fruit hang longer on the tree, to get a good juicy flavour. People buy them and they like them and they come back and buy them again."

The Johnsons may manage to buck the trend, but they do not deny that it exists. Erik Nicholson, the regional director of the United Farm Workers Union, many of whose members work for companies that already serve McDonald's, says he has seen it happen with potatoes and beef and sees no reason why it should not repeat itself again. "The industry becomes vertically integrated," he says. "Unless you're a grower that's tied to a supplier, you're not going to get the business. There is an inevitable increase in size. Before you know it, the packers have also become growers. They are more powerful than the state and the federal government in terms of setting standards. So small growers either grow themselves, or disappear."

A journey of two hours from the Johnsons', past wandering sage brush and over the Columbia River into Oregon, brings you to Boardman, population 2,855, where you can see what happens when the big keep on getting bigger. With 30,000 cattle, Three Mile Canyon Farms is one of the largest dairies in the US, providing milk that eventually ends up in McDonald's cheese burgers. The dairies are part of a 93,000-acre agro-complex that also provides potatoes to the fast-food chain.

The makeshift nature of the trailer parks and clapboard housing are testament to the temporary migrant workers who are no longer temporary, because they no longer migrate. The condition of the housing indicates the permanent poverty in which they live. One quarter of families in Boardman with children under five lives below the poverty line. "The story of industrialised agriculture," says Nicholson, "is that the big consumer starts to squeeze the producer on price, and after a while there's only one place where they can make savings: the workforce."

One way for an employer to get more for their money is to employ illegal immigrants. Renaldo Rodriguez, 34, an illegal immigrant from Mexico, lives on a trailer park with his three children and his wife. He has worked at the dairy for almost four years, where, along with a few colleagues, he places the tubes on cows teats as they revolve on a circular stage in a very clear division of labour. One sanitises the teat, another tests the milk and wipes the teat down, another puts the tube on to start milking, and another takes it off. Their shifts, he says, used to last as long as the cows needed milking, with no overtime and they were denied the breaks to which they were entitled until bad publicity forced management to climb down. For this, Rodriguez earns $7.75 an hour. (Three Mile Canyon Farms did not respond to several calls seeking comment for this story.)

Mexicans are now about 80% more likely to die in a workplace accident than native-born Americans, according to federal safety statistics. They are also far more likely to be injured. Following reports of poor working conditions at Three Mile Canyon, big retail consumers such as Safeway and Costco stopped doing business with them. But McDonald's, which has a code of conduct by which it expects all of its contractors to conform, remains.

Rodriguez shrugs when I ask him if he ever eats at McDonald's. "Sometimes," he says. But he, more than most, knows that the price of an Apple Dipper can be much, much higher than 99 cents.