Food Business News - April 14, 2020 - 12

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Lamb Weston sees path to QSR
demand gradually recovering

EAGLE, IDAHO - With operations in China
and throughout Asia, Lamb Weston Holdings, Inc. is relying on its experience in
those markets to discern how the spread
of the coronavirus (COVID-19) into Europe
and North America may affect demand for
its potato-based products. The company
is evaluating customer and consumer
demand in each market and adapting
production accordingly.
"In China, after the government
placed severe social and movement
restrictions that significantly reduced
restaurant traffic, french fries demand

full-service restaurants, according to the
company. The remaining 15% is purchased
at retail.
"Our sales breakdown is broadly
consistent with that split," Mr. Werner
said. "If the China experience provides an
appropriate guide, then we would expect
QSR volumes to begin to recover at a faster
rate than for full-service restaurants after
the more severe restrictions are relaxed.
Traffic at full-service restaurants and operations in the US is expected to be down
much more sharply than the QSRs. While
many of these operators are taking steps

'... in the US, QSRs that have established drive-thru, takeout and delivery capabilities are in a much better position in the current environment than full-service
restaurants and other outlets that largely cater to dine-in traffic.'
- Thomas P. Werner, Lamb Weston Holdings, Inc.

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12

Food Business News

008_FBN_April14_20.indd 12

declined about 50% for about a month,"
said Thomas P. Werner, president and
chief executive officer, during an April
1 earnings call with analysts to discuss
third-quarter results. "As restrictions have
relaxed, we've seen volume climb back to
about 70% of pre-crisis demand today.
"In other key markets in Asia, such as
Japan, South Korea, Taiwan and Singapore, we've seen only a modest impact
on french fry demand. In the US, it's still
too early to determine how the impact on
demand will play out."
Approximately 65% of all french fries
are purchased at quick-service restaurants
(QSR), with another 20% purchased at

to boost takeout and delivery sales, we
expect this will make up only a fraction of
lost business. So, our sales to these types
of customers are more at risk."
Retail demand for frozen fries, on the
other hand, has increased significantly.
"We've taken steps to boost production of our retail products in order to meet
the increased demand," Mr. Werner said.
"So, the bottom line is that, in the US, QSRs
that have established drive-thru, takeout
and delivery capabilities are in a much
better position in the current environment
than full-service restaurants and other
outlets that largely cater to dine-in traffic."
Lamb Weston's third-quarter results
April 14, 2020

4/13/2020 9:21:17 AM



Food Business News - April 14, 2020

Table of Contents for the Digital Edition of Food Business News - April 14, 2020

Food Business News - April 14, 2020 - 1
Food Business News - April 14, 2020 - 1
Food Business News - April 14, 2020 - 2
Food Business News - April 14, 2020 - 3
Food Business News - April 14, 2020 - 4
Food Business News - April 14, 2020 - 5
Food Business News - April 14, 2020 - 6
Food Business News - April 14, 2020 - 7
Food Business News - April 14, 2020 - 8
Food Business News - April 14, 2020 - 9
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Food Business News - April 14, 2020 - 14
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