From the Ground Up - McCain Foods Limited

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McCain desserts for the food service trade: Bananas Foster Cheesecake Bites, fresh-frozen fruit, and New York Style Cheesecake Bites – delicious paired with ice cream. analyses McCain had done didn’t fully reveal their strategic and financial contribution to Ore-Ida’s business. As it turned out, appetizers were a great companion sale with the potato products. The appetizer “accident” has turned into a big success for McCain that provides the company with welcome additional diversification from its potato business and excellent growth prospects. Many of McCain’s appetizer and snack products are customized and thus difficult for competitors to duplicate. All this adds up to competitive advantage. McCain quickly realized this was a business worth expanding, and it began hunting for more companies to buy. In 2001, it acquired the food service business and factories of a family-owned business, Anchor Food Products, in a three-party transaction in which Heinz bought Anchor’s retail brands. Included in the deal was the main Anchor factory in Appleton, Wisconsin, which, in 2003, received an $18 million upgrade. The Anchor acquisition was relatively easy for McCain to absorb, as by then McCain USA had developed deeper management strength. “Again, I think they were all surprised at the family culture of McCain and the willingness for all levels of management to be involved in the business,” says Randy Myles. The Anchor purchase turned McCain into the world’s largest appetizer company. CEO Howard Mann asked Lessard to make the Anchor purchase part of a new company-wide strategy. “There is great potential in finger food products,” Lessard said in 2003. “We are well on our way to growing this business worldwide.” Two of the former Ore-Ida appetizer plants are also located in Wisconsin. “The appetizer business started there as an offshoot of companies that battered fish out of the Great Lakes,” explains Peter Reijula, who became president of McCain Snack Foods when McCain reorganized its U.S. business into snack foods and potato divisions. “When that battered fish business declined in the 1960s and 1970s, companies like Anchor started looking to extend their business. From battering fish, it wasn’t a long leap to battering cheese.” While McCain often applies its brand to newly acquired businesses, the Ore-Ida brands were too well known to discard. For example, Moore’s, one of the Ore-Ida brands, was recognized as the company that invented the onion ring. Another brand acquired in the Ore-Ida deal was Brew City, a line of appetizers, such as Spanish onions, jalapeño peppers, and french fries battered in a beer-flour combination, that are a staple in many U.S. bars. McCain also retained Anchor as a brand, because, says Reijula, it was so well respected in the restaurant industry. “Anchor was very much a leader in the appetizer food service business,” he explains. “Their marketing practices were on the leading edge. They were a leader in the sale of valueadded appetizer products. We wanted to keep that legacy alive and we wanted to lift McCain by associating with that brand. Purchasing Anchor elevated McCain Foods. All of a sudden we became much better known and much better recognized. We have won a number of industry awards that we never could have contended for before.” A research and development team at the Anchor factory in Appleton works to satisfy the restaurant chains, which have an insatiable demand for new products. As Reijula points out, “Applebee’s doesn’t want to sell what the other chains sell. What research and development does is customize for large chain accounts. It’s hard to match our scale. And when you add customization to that scale, it’s an unbeatable combination.” Scale allows McCain to serve large chains and customization protects it from competition. That’s why appetizers have become key to the profitability of the U.S. company. As part of its commitment to the snack category, McCain bought two Canadian companies specializing in Asian frozen foods and, in 2002, acquired Taiwan’s largest producer of frozen Chinese dumplings from Goodman Fielder International. In 2006, McCain USA bought a California-based, family-owned firm, Jon-Lin Foods. It produces a range of frozen appetizers, including sautéed, grilled, fire-roasted, and smokehouseroasted vegetables. Jon-Lin fits neatly into McCain’s business strategy of diversification. 182 f rom the Ground up south of the border 183 Executive chefs John DaLoia and Brooke Brantley of McCain Foods USA, stay on top of consumer preferences, creating menu dishes and presentations to pass on to McCain’s restaurant clients.
McCain acquired the Jon- Lin appetizer business of California in 2006. It also responds to consumers’ health concerns because its products are neither breaded nor battered. The Jon-Lin deal is also a good example of the advantages of growth through acquisition: McCain acquired intellectual capital that it could not quickly have duplicated on its own. Anyone with a barbecue can roast a red pepper. But how do you produce excellent frozen grilled red peppers in large quantities? “The owner and the other people in this company have through trial and error spent years learning how to do it,” says Reijula. That’s why Jon-Lin can supply such customers as the Subway restaurant chain, with its thousands of outlets. Another 2006 addition to McCain USA’s growing snack food category was Indianabased Kempco, which makes pigs in a blanket and other snacks wrapped in dough. Van Schaayk and Reijula, as of 2007 vice-president for corporate development for McCain USA, look for small businesses that, like Jon-Lin, have unique products based on their own intellectual capital. Typically, Reijula says, “the business is not publicly for sale. There are no prospectuses to see. There is no investment banker to spin it. It’s you and the guy who has built the business with his own head and hands. You test the product and eventually he lets you look at the books.” In its early years, McCain would not have been interested in buying a roasted vegetable company in California or a Chinese-food company in Taiwan. But times – and consumers – change, and companies have to change too if they wish to grow and prosper. “The contrasts between the typical household when Harrison and Wallace started to build the business and the typical household today are just gigantic,” says Van Schaayk, who presides over the U.S. business from McCain’s modern office building in Lisle, Illinois, one of Chicago’s outer suburbs. “Peoples’ demand for convenience because of the hectic pace of their lifestyles is greater than ever, and their knowledge about the food that they eat – what’s good for them and what’s not – has increased enormously.” Carmelized Carmelized & Sautéed Sautéed Van Schaayk sees no contradiction between the increased health consciousness of the consumer and the continued growth of fast food chains. Because people are in a hurry, they continue to patronize these restaurants. But they expect the meals they purchase there to be good for them. In other words, the delivery mechanism – the quickservice restaurant – is here to stay. It’s the food that is delivered there that is changing. The United States, because of its wealth, size, and innovative business culture, is often where new consumer trends start. Van Schaayk remembers travelling as a teenager to the Netherlands and seeing Dutch teenagers wearing sweatshirts bearing the crests of various U.S. universities. “They were Europeans, but they aspired to certain things in American life,” he says. “There is no question that the export of the American lifestyle has benefited the growth of McCain globally and still does.” By the end of the 1990s, McCain had achieved its long-standing goal of becoming a major force in the home of the modern fast food industry. McCain USA had become the largest of McCain’s worldwide operations, in fiscal 2006 accounting for 32 percent of McCain’s sales worldwide. Its new-found prominence in the United States gave McCain an even stronger base from which to continue its expansion around the globe. In the first decade of the new century, huge countries such as China and India were being transformed by rapid economic growth. For McCain, that meant there were more worlds to conquer. 184 f rom the Ground up south of the border 185 Individually Quick Frozen (IQF). Available diced and minced. © 2006 McCain Foods USA, Inc. Chef Sensations ® Onions & Garlic Low moisture for double the solids of standard IQF. Custom carmelization. Sautéed in a variety of oils. Real Quality. Real Value. Real Possibilities. Natural sweet flavor, tender texture. Consistent strip lengths. Natural, smooth flavor. Really great recipes call for really For real quality and value, discover the great ingredients. Chef Sensations possibilities with Chef Sensations Carmalized and Sautéed Onions IQF Carmalized and Sautéed and Sautéed Garlic answer Onions and Sautéed Garlic. the call. Our “Field to Fork” For more information about our philosophy means starting with premium entire product line of premium IQF quality vegetables and fruits, harvested at their vegetables and fruits, custom and Certified perfection, processed for maximum flavor and Organic blends, and appetizers, call us today texture, then quick frozen for ultimate freshness. or visit us at www.mccainfoodsusa.com 1-800-000-0000 2275 Cabot Drive, Lisle Il 60523 • www.mccainusa.com Individually Quick Frozen (IQF). Minimal weepage, ideal for moisture sensitive applications. © 2006 McCain Foods USA Campfire cooked flavor. Chef Sensations ® Fire-Roasted Fire-Roasted Vegetables & Fruits Unique Fire-Roasted flavor is great for sauce applications. Variety of cut sizes available - julienne, sliced, diced, minced, and pureed. Signature Fire-Roasted grill marks. Enhance salsas, sauces and chutneys with Fire-Roasted fruit. Real Quality. Real Value. Real Possibilities. Really great recipes call for really For real quality and value, great ingredients. Chef Sensations discover the possibilities with Fire-Roasted Vegetables and Chef Sensations IQF Fire- Fruits answer the call. Roasted Vegetables and Fruits. Our “Field to Fork”philosophy For more information about means starting with premium quality our entire product line of vegetables and fruits, harvested at their perfection, premium IQF vegetables and fruits, processed for maximum flavor and texture, custom and Certified Organic blends, call us then quick frozen for ultimate freshness. today or visit us at www.mccainusa.com. 1-800-000-0000 2275 Cabot Drive, Lisle Il 60523 • www.mccainusa.com Open flame roasting retains brilliant color and texture. Slow roasted with extra virgin olive oil for a bold, smokey flavor. Smokehouse-Roasted flavor is ideal for sauces, salsas and chutneys. © 2006 McCain Foods USA Chef Sensations ® S mokehouse-Roasted S mokehouse-Roasted Vegetables & Fruits Seared to retain signature Smokehouse-Roasted grill marks. Natural juices are seared in for sweetness. Variety of cut sizes - strips, diced, minced and pureed. Real Quality. Real Value. Real Possibilities. 1-800-000-0000 2275 Cabot Drive, Lisle Il 60523 • www.mccainusa.com Low moisture for double the solids of standard IQF. Individually Quick Frozen (IQF). Fresh crisp texture and naturally sweet flavor. Really great recipes call for really For real quality and value, discover great ingredients. Chef Sensations the possibilities with Chef Smokehouse-Roasted Vegetables Sensations IQF Smokehouseand Fruits answer the call. Roasted Vegetables and Fruits. Our “Field to Fork” philosophy For more information about our means starting with premium quality entire product line of premium vegetables and fruits, harvested at their IQF vegetables and fruits, custom and perfection, processed for maximum flavor and Certified Organic blends and appetizers, call us texture, then quick frozen for ultimate freshness. today or visit us at www.mcainusa.com. Chef Sensations: roasted vegetables and fruits are a growing part of McCain’s business.
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chapter title i
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Produced on the occasion of its 50t
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viii From the Ground up chapter tit
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Janice Wismer at the McCain offices
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A.D. McCain and McCain Produce It w
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The Florenceville plant up and runn
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LEFT: Harrison and Wallace at the s
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TOP: Jean Lawler and team in the te
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TOP LEFT: Bob Ferguson, New Brunswi
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ABOVE: Wallace and Dick McWhirter i
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Wallace Margaret McCain likes to sa
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LEFT: Wallace and Harrison listen a
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TOP: The September 1967 edition of
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CHAPTER TWO Crossing the AtlAntiC H
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Wallace and Harrison in 1967, at th
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LEFt: Mrs. A.D. McCain and her four
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Scouting a field of a purpleflowere
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LEFt: Mac and Sheila McCarthy with
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McCain gives out free samples to la
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AbovE: Print ads for the So Good fo
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Canadian, eh? During a royal visit
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Annemarie Oosterhoff Harbo, country
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German sales team in 1981 at a meet
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TOP: Truck advertising “three-sta
Page 50 and 51: Paul van der Wel, CEO, Continental
Page 52 and 53: Rolando Palazzi (right) receives th
Page 54 and 55: LEFT: Celebrating McCain’s first
Page 56 and 57: Potato variety and seed potato prod
Page 58 and 59: The Matougues plant, 2007. This new
Page 60 and 61: CHAPTER FOUR Down UnDer In 1971, Wa
Page 62 and 63: Milton Rodda and technical services
Page 64 and 65: Dennis Jesson (centre), production
Page 66 and 67: Plant manager Bill Goodridge and pr
Page 68 and 69: Basil Hargrove, CEO, Asia Pacific,
Page 70 and 71: As has been the case wherever McCai
Page 72 and 73: ABOVE and LEFT: Fire at the Florenc
Page 74 and 75: Cutter cannons. This approach depen
Page 76 and 77: Just as McCain Foods had little exp
Page 78 and 79: LEFT: View from the airstrip near H
Page 80 and 81: TOP LEFT: Nancy Oliveira and Suzy T
Page 82 and 83: Cedric Ritchie (centre) of the Bank
Page 84 and 85: TOP: McCain produces an assortment
Page 86 and 87: LEFT: Harrison and Billie with thei
Page 88 and 89: Kathryn McCain chairs the McCain Fo
Page 90 and 91: Wallace McCain Scott McCain Eleanor
Page 92 and 93: markets, including the United State
Page 94 and 95: McCain won a Supplier of the Year a
Page 96 and 97: Shepody harvest, western Idaho. ope
Page 98 and 99: LEFt: Randy Myles (left) vice-presi
Page 102 and 103: CHAPTER SEVEN New worlds to CoNquer
Page 104 and 105: lEFt: Mark McCain (centre) chats wi
Page 106 and 107: Employees of McCain South Africa. p
Page 108 and 109: Manual harvesting and bagging seed
Page 110 and 111: lEFt: Adolfo Lopez Rouger with Edua
Page 112 and 113: lEFt: McCain Argentina management,
Page 114 and 115: lEFt: A McDonald’s on a busy Shan
Page 116 and 117: McCain India: In the middle row, fi
Page 118: A McCain International group on a 1
Page 122 and 123: Dale Morrison exchanges ideas with
Page 124 and 125: ToP lEFT: Barb Corey of the McCain
Page 126 and 127: ToP: Paul Tellier, an Opco board me
Page 128 and 129: Adolfo Lopez Rouger, CEO McCain Sou
Page 130 and 131: Acknowledgements From Dale Morrison
Page 132 and 133: Fishery Products International (FPI
Page 134: Simplot, Jack, 6-7 (See also J.R. S
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