From the Ground Up - McCain Foods Limited

Harrison reviews construction
plans with Bob and Andrew.
The steam peeler behind them
could handle 135 kilograms of
potatoes at a time.
company shares. Andrew and Bob, who were receiving
salaries from McCain Produce, which they managed,
each got one-sixth. McCain Foods Ltd. and Carleton
Cold Storage Ltd., the company set up to own the cold
storage facility, issued a total of $420,000 worth of
bonds, which were guaranteed by the province of New
Brunswick.
“That was a big deal for us,” recalls Wallace, because
the government guarantee allowed the new company
to borrow money at an interest rate it could afford.
“Who was going to buy McCain Foods bonds without
a guarantee? Nobody. And it didn’t cost the government
anything except the risk it took.” The brothers also
persuaded the Carleton County Council to temporarily
forgo property taxes on McCain Foods.
Under a program to encourage construction of cold storage facilities to help farmers,
the federal government provided Carleton Cold Storage with an $87,000 grant.
To qualify for this grant, Carleton Cold Storage had to be a public company. McCain
Foods owned shares in the company and eventually bought all of them. (It absorbed
Carleton Cold Storage in 1979.)
Harrison and Wallace paid a visit to the Bank of Nova Scotia in Saint John, where
they met with the bank’s supervisor for New Brunswick and Prince Edward Island.
They wanted a $150,000 line of credit that would be used as working capital, with the
new company’s inventory and receivables as security. As they were making their pitch,
the supervisor interrupted them. It so happened that the president of the bank, Horace
Inman, was touring the province and was about to visit the branch. The McCain
brothers would have to wait until the president’s visit was over. Then they would be
able to continue making their case for the bank’s support.
“Inman was a very outgoing guy,” recalls Wallace. “He sees us sitting there in the
anteroom, waiting, so he asks who we are, and we told him.”
Inman knew the McCain family from his time as supervisor of the bank in New
Brunswick. He said, “You want to start a frozen food business? That’s interesting. Did
you get the money?”
“We don’t know yet.”
“Don’t go anywhere.”
Inman went into the supervisor’s office. He came out fifteen minutes later and
confronted the brothers. “Your grandfather did business with this bank, too,” he
said. “He owed this bank a lot of money, and when he owed it he was actually broke.
But your father paid all the money back. We never lost a nickel from any McCain.
You’ve got your money.”
Raising money for a factory was one thing; actually building it was another. Wallace
and Harrison were salesmen. They knew nothing about building a manufacturing
facility. But good leaders recognize their limitations, and the brothers, as they built
the company, repeatedly recruited the best talent they could find in manufacturing,
engineering, agronomy, and finance, among other fields. They began that pattern in
Florenceville by seeking help from Olof Pierson.
Pierson had designed the Baxter plant in Corinna, Maine, and the McCains wanted
him to design theirs. Wallace recalls Pierson, a graduate of the Massachusetts Institute
of Technology, as brilliant but disorganized: “He smoked a lot. He would come in
and talk about what we were going to do, and he would draw something on the back
of his cigarette package. He never wrote anything down. He had it all in his head.”
Sometimes Pierson would forget things – such as the motors that were needed to
run the conveyor belts on the production line. It didn’t occur to him to get them until
Wallace asked him about it, shortly before the factory was scheduled to open. On the
other hand, he was inventive and liked to design new machinery. This was important
8 From the Ground up
t he BeG inninG 9
The McCain family, left to
right: Harrison, Wallace, Bob,
Laura, Rosemary, Andrew, Jed
Sutherland (Marie’s husband),
Marie, Billie, Margie, Marjorie.