Fast Food Fries Supplier Lays Off Several
Lamb Weston Holdings, Inc., the largest producer of french fries in North America, has announced it will shut down its plant in Connell, Washington, laying off around 375 employees in the process. The decision, revealed in their recent earnings report, marks a significant move for the company as it faces declining demand for frozen potatoes and softer restaurant traffic.
In an October 1 press release, Tom Werner, the president and CEO of Lamb Weston, pointed to a steep drop in the company's financial performance during the first quarter of Fiscal Year (FY) 2025. Lamb Weston’s net income plunged by a staggering 46 percent to $127 million compared to the same quarter last year. Werner emphasized that the company is taking "key actions" to restructure its operations to adapt to this downturn, starting with closing its "older, higher-cost" facility in Washington.
The closure of the Connell plant represents a tough reality for 375 workers who now find themselves out of a job. Werner explained that this move is part of a broader strategy aimed at boosting efficiency and profitability.
He framed it as a proactive measure to streamline operations while still positioning the company to make strategic investments for long-term growth. However, it's clear that even a giant like Lamb Weston is not immune to the market’s current challenges, as demand for french fries and other frozen potato products continues to struggle.
Lamb Weston’s troubles aren't isolated but part of a broader industry trend. According to Werner, restaurant traffic has remained soft, and this has had a direct impact on sales of fries, which have traditionally been a staple side item for many fast-food chains. Even powerhouse customers like McDonald's, which relies heavily on Lamb Weston for its supply of fries, have been struggling to boost customer foot traffic amidst rising food costs.
The situation paints a grim picture for the fast-food sector overall. Since 2019, fast food prices have surged by 33 percent, while grocery costs have also jumped by 26 percent, according to data from the Department of Labor.
In an attempt to lure back budget-conscious consumers, McDonald’s rolled out a $5 "Meal Deal" that includes a McDouble burger or McChicken sandwich, chicken nuggets, fries, and a drink. But these promotions, while popular, aren’t translating into higher fry sales. Werner noted that many customers are opting for smaller portions, downgrading from a medium fry to a small one as part of these meal deals.
The shift in consumer behavior reflects a larger economic trend—people are tightening their wallets even when it comes to fast food. Competitors like Burger King and Wendy’s have also jumped on the bargain bandwagon, launching similar value deals to attract more diners. However, the common denominator remains that people just aren’t buying fries at the same level they once did. Even with attractive pricing, consumers seem to be scaling back their orders in favor of cheaper, smaller options.
This declining demand for one of America's favorite side dishes suggests a broader malaise in the fast-food industry, as higher prices and economic pressures change how people eat out. Lamb Weston’s decision to shutter its Connell facility isn’t just about trimming costs—it’s a response to a market where the golden days of the fry might be losing a bit of their shine.