Business

A New Boss at McCain

John DeMont November 29 1999
Business

A New Boss at McCain

John DeMont November 29 1999

A New Boss at McCain

Business

John DeMont

Allison McCain came home in August. But his roomy office atop McCain Foods Ltd.’s international headquarters in tiny, out-of-the-way Florenceville, N.B., looks like he arrived just yesterday. Several framed pieces of art lean in a pile waiting to fill big empty spaces on the walls. Other than a couple of photographs of his wife, Clare, and their two teenage children, the only personal touch is a photo of him skiing down a Swiss mountain taken when he worked at McCains United Kingdom head office in the English seaside resort of Scarborough. Allison, 50, who says that 16 years in Britain made him “a bit of an anglophile,” sounds a touch wistful for his old life as he stares out the picture window. Across the stately Saint John River stands the ridge of land where generations of McCains have lived—and many, including his father, Andrew, who died in 1984, and his uncle Bob, who passed away seven years earlier, lie buried in a family plot. “I was born and grew up here,” Allison told Macleans in his first extensive interview since being appointed McCain deputy chairman, making him the heir apparent, in February. “I thought I knew it pretty well, but Fve been out of the country for 20 years.” And much has changed. In 1980, when Allison left his job as production manager of the Florenceville french-fry plant to become production director of McCain’s Australian operations, the firm his two youngest uncles, Harrison and Wallace, started in 1956 was already an undeniable Atlantic Canada success story with an impressive $500 million in sales. Still ahead was the surge in growth that would push annual sales to $5.6 billion in 1999 and make McCain, with 16,000 employees worldwide, one of Canada’s best-known business names in the global marketplace. Publicly, at least, there was not a hint of the Shakespearean clash of wills between Harrison, now 72, and Wallace, 69, that would forever shatter the peace within the family empire. And it was not at all obvious that Allison, a quiet, ex-engineer whose only goal once had been to escape the quiet confines of Florenceville, would emerge from among the five McCain cousins once working in the business to be the chairman in waiting. “Nearly all the family think that he is a good choice,” stresses Harrison McCain, the blunt-talking chairman. “His role will be to try to continue the trend line and I believe he will be able to do it.”

Yet even Allison must know the job of running the McCain empire has perhaps never been harder. He might not have become boss-designate if Harrison and Wallace had not batded over succession. In theory, the nasty family feud officially ended when Wallace was ousted as co-CEO in 1994. He decamped to Toronto with his sons Scott and Michael (the latter his personal candidate to be the next head of McCains) where they took over Maple Leaf Foods Inc. But Wallace still owns 33 per cent of McCain Foods Group Inc., the holding company that controls the food-processing giant, with its major lines of fries, frozen pizzas and juices. Harrison holds an equal number of shares, while the balance of power remains split among the families of their late brothers who so far, at least, have always sided with Harrison. The wounds remain painful as ever. “If we are talking about a pure business issue, everybody gets along fine,” says Allison. “In matters that were in dispute among the family, well, I don’t think people have changed their views very much.”

Even if the shareholders were not bitter enemies, Harrison’s successor is going to have to scramble to keep that enviable growth record intact. McCain is already one of the dominant french-fry makers in Canada, the United States and Western Europe. Anxious to add to market share, it has spent more than $230 million in the past two years expanding plant capacity in Holland and the United States, and building a new french-fry plant in France. It is also breaking ground on a $94-million potatoprocessing plant in Alberta. More takeovers are a possibility now that McCain has digested the $680 million it paid in 1997 to buy the food-service division of OreIda Foods Inc. from H. J. Heinz Co. of Pittsburgh. The next chairman, moreover, will have to lead the charge into emerging markets like South America—where, just last week, the company announced a $ 100-million expansion of its potatoprocessing plant in Argentina that also serves Brazil, Chile and Uruguay—as well as Eastern Europe, where McCain has sunk $79 million into a new french-fry plant in Strzelin, Poland.

Truth is, Harrison will cast a long shadow over his successor. Bald-headed, fast-talking and bursting with energy, he always took the spotlight from Wallace, his more retiring brother, during their 38-year partnership. McCain executives expect their future chairman will be more a steady-as-shegoes operator than big-thinking visionary. And Allison, whose lean build, thick hair and quiet manner resemble Wallace more than Harrison, would rather avoid any comparisons with the uncle he is destined to succeed. “I can’t deal with the expectations,” he says. “My father told me as a kid, ‘You have to understand Harrison is one of the smartest business people in Canada.’ I can’t try to emulate that.”

He cannot escape it either—just like he has never been able to escape being a McCain, and all the wealth and power that name implies in the little village near where the first member of the clan arrived from County Donegal, Ireland, in the 1820s. Like most of his cousins, Allison, whose father ran the family seed-potato business, McCain Produce Inc., went to the local schools. By the time he graduated in 1972 with an engineering degree from the University of New Brunswick in Fredericton, all he knew is that he did not want to go into the family business.

Instead, he wanted to travel and see the world. After a brief stint at the New Brunswick Telephone Co., he quit and headed to London to visit his eldest sister, Kathy, travelled around Europe and enrolled in a French course at the Sorbonne. Back in London, he and Kathy went to lunch with their uncle Harrison, in town on business, and Charles McCarthy, then-managing director of McCain’s United Kingdom operations. They invited Allison to see their french-fry plant in Scarborough. Says Allison: “I saw a bunch of people who were really excited about what they were doing, were quite young, very casual and very unbureaucratic, and I said this was the kind of company I want to work in.”

In 1975, Harrison gave him an engineering job, making

As Allison McCain prepares to take over, the job of running the family-owned empire has never been harder

Allison the first member of the next generation to enter the family firm. But it was in Florenceville. The overseas transfer he wanted so badly did not come until five years later when he took the post in Australia. Three years later, he moved to England to become production director with McCain Foods (GB) Ltd., and in 1988 he was promoted to deputy managing director of the British unit.

By that point, the bad blood over who would take over when Harrison and Wallace retired was already starting to bubble to the surface. These days, everyone in Florenceville just wants to put the whole painful episode behind them. But even Harrison, who refuses to talk about the spat, admits that Allison’s appointment may not be the last word in the fight over succession. Allison also prefers not to talk about the past. He is still getting used to renting a house on the ridge and driving his Mercedes sedan the couple of kilometres to the McCain parking lot where his spot is next to Harrison’s. Allison expects to be away from home at least half the time, flying to McCain operations around the world in one of the corporate jets that sit on the air strip up behind their home. That is making the transition more difficult for his British-born children and wife, a physician from northern New Brunswick. “My daughter said to me recendy, ‘Why can’t we just go home?’ ” he laughs. They do not understand that when your name is McCain all roads, sooner or later, lead to Florenceville. And that, as their father knows better than anyone, immense wealth does not come without extraordinary challenges—and expectations. E3