No small-fry, McCain Foods is the #1 French fry maker in the world, processing about 1 million pounds of fries and other potato products an hour. In addition to its own brands, it owns Ore-Ida foodservice. (H.J. Heinz owns the retail brand.) McCain also produces frozen vegetables, appetizers, juices, pizza, entrees, and desserts at some 60 plants on six continents. The lineup is available in 130-plus countries to restaurants, groceries, and retail chains. It offers freight, warehousing, and distribution services for fresh produce, too. The McCain family began making fries in 1957 and still owns the company. In the 1990s family loyalties frayed, and some members left for Canadian food processor Maple Leaf Foods.
Although McCain scoops up McDonald's international business, arch rival J.R. Simplot supplies the majority of frozen fries in the US. McCain also contends with a slump in demand for higher-priced convenience foods driven by a tough economy that has hammered consumer purchases as well as dining out. Nonetheless, McCain is an established name brand in Canada and the frozen food aisles in the US and Europe. As fast food continues to spread into developing countries, McCain is further reducing erosion to its top line by extending its reach to South America, South Africa, the Middle East, Asia (India, China, Taiwan), and Australia. The company also strengthens its bargaining power by purchasing potatoes and other crops from 3,200 farmers around the world.
McCain's Australian subsidiary has agreed to acquire the Hillshire Brands bakery business there. The company in late 2012 agreed to pay $85 million for Kitchens of Sara Lee, adding to its frozen foods business.
Product recalls are a food processor's nightmare with consequences for consumer confidence. McCain has suffered several recalls. In 2010 it voluntarily recalled a frozen potato line over Salmonella-related concerns. The hard choice followed a recall in 2009 by its Australia/New Zealand subsidiary of certain chicken meals due to bacterial contamination. A year earlier, metal fragments appeared in a stir fry vegetable meal, and it was also recalled.
Going forward, McCain is focusing on demand for healthier offerings, by cooking up products with reduced calories and sodium content, no trans fats, little saturated fat, and alternate "flavor enhancers." It has changed the recipes of 70 products to use fewer additives and preservatives.
In addition to producing frozen food, McCain Foods diverse activities include a produce and fertilizer business. Its transportation holdings include Day & Ross (general freight services); Day & Ross Dedicated Logistics (private fleet services); Fastrax Transportation (truckload services); Sameday Worldwide (courier, express and cargo services); and Sable Warehousing (storage and distribution). Its logistics operations offer a number of advantages. McCain's investment in a refrigerated warehouse in France supports an adjacent production plant and widens the door to serving the European marketplace. – less
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