New products, programs propel McCain Foods USA toward goal of “building America's best food company.”

If it’s Monday, this must be Lisle.

One late October afternoon found McCain Foods USA Chief Executive Frank van Schaayk preparing to leave the company’s suburban Chicago headquarters to complete his annual nationwide tour of McCain’s food plants.

By the end of this particular week, van Schaayk will have hosted town hall meetings with hundreds of employees in Othello, Wash., Burley, Idaho, and Grand Island, Neb. Although this will be just a portion of McCain’s larger operations network (van Schaayk toured earlier this summer as well) it still will involve three plants in two days.

A 15-year company veteran himself, van Schaayk smiles when asked about his travel agenda. Besides meeting with McCain’s workforce, he’s anxious to discuss the past year’s achievements, as well as new programs and goals.

There’s plenty to talk about.

“We are building America’s best food company,” he tells Refrigerated & Frozen Foods.
“We say ‘building,’” he continues, “because we realize that it’s a process. America, of course, is our market and ‘best’ reflects our drive to develop best practices in every aspect of our business. And compared to when we began, we’re much more of an all-around ‘food company’ now.”

Although it opened a Northeast plant in the mid-1970s, McCain Foods USA got its official start in 1991 in Chicago’s western suburbs. A unit of Canadian parent McCain Foods Ltd., the U.S. business began as a No. 4 or No. 5 player in frozen French fries, a private label retail juice processor and owner of McCain Ellio’s frozen pizza in the Northeast.

Today’s company is a $1.6 billion enterprise that – while holding on to its Northeast retail pizza and potato business – has become a foodservice market leader. Following its purchases of Ore-Ida’s foodservice operations and Anchor Foods, McCain emerged in 2001 as the nation’s largest frozen appetizer supplier. It likewise has become one of the largest frozen potato processors. More recently, product development and deal making have extended McCain’s reach into other areas such as desserts, fire-roasted frozen fruit and vegetables and dough-enrobed hand-held entrees and snacks.

Notes van Schaayk, “Health and convenience are big drivers in foodservice. And it’s not as though convenience is a new trend. These acquisitions (of Colton, Calif., vegetable processor Jon-Lin Foods and an Indiana dough-enrobing plant) simply give us new technology platforms and enable us to create more products that are quick and easy to eat and that are better for you.”

He continues, “Health doesn’t have to mean that everything we do has a little heart symbol beside it. It means that we consider the importance of health in all our product concepts. Our new 100-calorie Sweet Classic desserts offer a bite of decadence in a portionable, responsible size. Another example involves French fries, which people love. Here, what we have done is reduce the saturated fat as much as possible and eliminate the trans fats. Next, we’ll reduce sodium levels.”

Beyond product specifics, van Schaayk turns to McCain’s other goals: this Lisle, Ill.-based company must drive organic growth and greater productivity.

“Our primary categories – appetizers and potatoes – are low-growth areas and as the market leader, it’s imperative that we identify and push meaningful innovation,” van Schaayk says. “Meanwhile, we want to deepen our [sales] penetration with existing customers, many of whom only buy one or two products. We also just entered the military sales channel and think we can reach some new segments, such as the in-store deli and convenience store.”

Van Schaayk also has his eye on the bottom line, which has been impacted by everything from rising fuel and ingredient costs to the value of the Canadian dollar. To offset these and other charges, van Schaayk says his team is working diligently across the board – in supply chain, operations, sales and marketing and elsewhere – to reduce cost while it boosts productivity by as much as two or three percent.

Meanwhile, mid-December brought news that McCain’s Canadian parent will build a French fry and potato specialties plant somewhere in the U.S. Pacific Northwest. Once completed in mid-2009, officials say the operation will further improve McCain’s position in domestic and international markets.

For his part, van Schaayk points to still more positive changes within McCain. He indicates numerous retail achievements, as well as improvements in human resources, safety, supply chain, environmental management and sales (see sidebar, p.16). Behind the scenes, as well, McCain has brought in several top executives from leading CPG food and non-food companies.

One of those new faces is Chuck Gitkin, vice president of foodservice marketing and innovation. A 17-year marketing veteran (most recently with Unilever), Gitkin describes McCain as a “no-nonsense, customer-focused business [that’s] determined to drive meaningful innovation.

“Historically, innovation meant generating lots of new products,” he says. “Now we have a more strategic view that’s neither short term or long term. Instead, we’ve got a comprehensive set of time-based goals. Although we still want to do some line extensions and reinvest in our core business, we want to look for new growth platforms.

“We’re not talking about silver bullet solutions but about new spaces where we can go, whether that means bite size and portionable or better for you,” he continues. “We now measure innovation as a percent of total business. We also measure the value of innovative new ideas in our pipeline and we look at the percentage of new products that fit a ‘better-for-you’ profile. These are all part of a scorecard we look at every month.”

Gitkin says he and others are working to drive organic growth in McCain’s core potato business as well as in appetizers, new ventures and better-for-you products.

McCain has made tremendous strides in the last area, in particular. It achieved a 0g trans fat claim on its retail potato products in 2003 and, by the end of 2007, researchers had eliminated trans fat in more than 1,000 foodservice products.

Officials say McCain committed to the Alliance for a Healthier Generation’s (AHG) guidelines for competitive foods sold in schools on April 4, 2007. In doing so, McCain pledged to support new products, public education and demonstration efforts to improve child nutrition in U.S. schools. At the end of 2007, McCain says it had 19 school foodservice products that fit within AHG nutrition guidelines – containing less than 35 percent calories from fat, 0g trans fat, fewer than 10 percent calories from saturated fat and 230 mg of sodium or less per one half-cup vegetable serving.

More better-for-you products are on the way. In fact, this January saw McCain launch four reduced sodium varieties of its McCain Smiles (shaped potatoes) and McCain OgVations French fries, each with fewer than 200 milligrams of sodium per half-cup vegetable serving. The products are distributed to school foodservice operators.

“They taste great, function as well as their predecessors and deliver the same crispness in a bake-able format,” notes Don Moos, senior director of Innovation & Better For You business initiatives. “Our better-for-you work with potatoes began with oils research and child nutrition. Today, it’s become an integral aspect of how we do business. . . . You’ll see a steady flow of products coming in the near future.”

McCain already has been quite busy on other fronts as well. New items are bolstering the company’s other primary product platforms, including:

Potatoes:McCain’s goal is to go beyond traditional fries with forms that please operators and consumers alike. New offerings include Sweet Potato Crinkle Fries (which offer “terrific nutrition density” and functional benefits) and McCain Babycakes potato patties (that add menu versatility and also allow operators to offer a breakfast sandwich and potato duo similar to lunch and dinner burger-and-fry combinations).

Appetizers:McCain’s goal is to give operators distinctive, adventurous and tempting new menu options. New products include Brew City Cheddar Pints (beer-battered cheese curds) and Black & Tan Onion Rings. New entries in the Moore’s line include Flour Flip’t onion rings (the first to emulate back-of-the-house flour coating, officials say).

New ventures:McCain’s goal is to broaden sales with existing customers and solve more operator and consumer needs. New offerings include Zooms!, a line of hand-held, dough-enrobed breakfast sandwiches to help school foodservice programs increase breakfast participation.

Notes Moos, “Our goals here are not so much around the number of new products but how we increase our total innovation, or the impact of new items. Meanwhile, we intend to ramp up our portfolio of healthier products.”

On that note, Moos draws an interesting comparison.

“Externally – when you think about our new product efforts – we have become a leader in the wellness area,” he says. “Internally, we also have been a leader in wellness. Because of our proactive steps companywide, we’ve held our insurance premiums in check (with no increases) for two years.

“We’re working hard as a company on better-for-you [workplace] initiatives. As we roll new products like these into the marketplace, it’s very comfortable for us. You could say that we practice what we preach.”