From the Ground Up - McCain Foods Limited

toP: Wallace presents employee John Cox with a “Gold
Cap” after a piece of steel slipped during construction
and struck Cox’s hard hat, in 1971. The New Brunswick
Industrial Safety Council issued the hats at the request
of a company when one of its workers had been saved
by a hard hat from serious injury or death.
bottoM: Wallace, 2006.
Wallace
Harold Durost, who worked for McCain Foods for twenty-seven
years in Canada and the United States, remembers the day
Wallace McCain came to Easton, Maine, for a monthly management
meeting. “As was the custom, Wallace wanted a plant tour
before we had lunch in the cafeteria,” he recounts. “As we got to
the stockroom, Wallace noticed the new McCain caps we had for
sale and wanted one. As the plant manager scurried to get one
for him, Wallace demanded to know the price. He made a point
of paying the $5.
“This story went through the plant like wildfire the next day
– that Wallace McCain was in the plant and had paid for his own
McCain cap. The message was obvious: no matter who you are,
you don’t get treated any better or worse than the next person.”
Wallace and Harrison inspired loyalty because their employees
knew the brothers genuinely cared about them. When John Walsh
had a serious illness in 1990, both bosses repeatedly called his wife,
Sherry, to check on his condition. Says Walsh, “They told her that if
we needed anything at all, to call them and it would be taken care
of. There was never any question of when I was coming back to
work. Their only concern was that I get better. They ended up flying
us to London, Ontario, to see cardiac specialists there.”
Wallace McCain became chairman of Maple Leaf Foods,
Canada’s largest food-processing company, in 1995. His son
Michael became CEO in 1998. Wallace isn’t involved in the dayto-day
operations of the company and so has plenty of time for
other activities, including fundraising for such favourite causes
as Mount Allison University and the National Ballet School. He
also serves on the boards of Brascan Corp. and Toronto’s St.
Michael’s Hospital.
When Wallace turned seventy-six in 2006, he read that a man
his age could expect to live to age eighty-four – eight more
years. “So I made some changes. I booked more holidays. I don’t
do anything here at Maple Leaf Foods anyway. I go to meetings,
I chair the board. I’m not running it day to day, so if I don’t come
to work, they don’t miss me.” In 2006 and 2007, Wallace and his
wife, Margie, travelled to Europe and South America, and took a
cruise on the Norwegian coast and another in the Caribbean.
But Wallace has not lost his taste for business. Most days finds
him in his office at Maple Leaf Foods in midtown Toronto. “My
memory isn’t as good as it was. In the old days, I would know the
price of potatoes in Australian dollars or in Dutch guilders. But
I have to do something. As long as I’ve got a couple of marbles
and am able to walk, I’ll be coming to the office.”
made animal feed out of potato waste. Bill Mabee, who was director of
finance for McCain USA at the time, says that purchase is a classic example
of the management style that led to McCain’s rapid growth.
Tater Meal was processing the potato waste from McCain’s New
Brunswick and Maine plants into animal feed. Mabee curled with the three
brothers who owned the plant and he found out they were interested in
selling. “We determined a fair price and I went to see Wallace about buying
the business,” recalls Mabee, who later went on to become vice-president
of finance for the parent corporation. “We talked for ten minutes about the
strategic value of that business and he said to me, ‘Go buy it.’”
McCain Foods got into the frozen juice business in Canada and the
United States for very different reasons. In Canada, it had achieved a
dominant position in french fries and used other frozen food categories
for growth, scale with customers, and to utilize its existing distribution
system. So it packed frozen juice at its plant in Grand Falls and bought the Sunny
Orange juice factory in Toronto. In the United States, in contrast, its position in french
fries was weak and there was no common distribution system to use. Nevertheless,
since frozen juice had been a successful business at home, McCain thought it would
work well south of the border as well. It seemed like a quick and easy way to grow.
Quick decision making is often lauded as a strength of the McCain management
style. But sometimes decisions are made too quickly. The purchase by McCain in 1985
of Bodine’s, a Chicago juice company, is a case in point. McCain, alerted by a Brazilian
juice-concentrate supplier that Bodine’s was for sale, had to act quickly, since ConAgra,
a food industry giant, was also trying to buy the plant. Bodine’s was the largest orange
juice manufacturer in the Midwest. Owning it would give McCain a significant presence
in the American industrial heartland, from which it could build its business, and
it would give McCain much more purchasing scale with its Brazilian suppliers.
George McClure visited the plant and recommended that McCain make an offer.
Although McCain knew Bodine’s had been investigated by the U.S. Food and Drug
Administration (FDA), it thought the problems had been resolved. Harrison flew to
Chicago and made the deal quickly.
Shortly after the transaction closed, Wallace McCain toured the plant and noticed
a set of water tanks. He asked what they were for and, to his amazement, the
168 f rom the Ground up
south of the border 169
Ian Robinson, president of
McCain USA potato division,
c.1985.