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Be it pizza, orange juice or french fries, McCain is on the move buying and building.

Be it Pizza, Orange Juice or French Fries, McCain Is on the Move Buying and Building

McCain Foods Ltd., Florenceville, N.B., Canada, has acquired Ellio's Pizza, Lodi, N.J., the top retail frozen pizza company in a number of northeastern U.S. markets.

"We expect the acquisition of Ellio's to appreciably enhance our frozen food business in the United States," said Wallace McCain, president of the Canadian firm, which will run the New Jersey business as McCain Ellio's Foods, Inc.

With annual sales of more than $30 million, Ellio's has had the number one-selling pizza brand in New York, Philadelphia, Boston and other Northeastern cities. McCain is the leading Canadian manufacturer of frozen pizza, but is also the largest international firm in French fries and produces frozen dinners, vegetables, juices and other products.

Ellio's was previously owned by Dial Corp., a subsidiary of Greyhound Corp., and has a payroll of 150 people -- all management personnel and workers are being kept on. McCain already has other U.S. operations, including McCain Foods, Inc., in Maine; McCain Foods Western, Inc., in Washington and South Dakota; and McCain Citrus, Inc., in Chicago, New Jersey and California.

Meanwhile, McCain Citrus has invested $8.1 million to build a 52,000 square foot juice packing factory in Fontana, Calif. Slated to be operational this February, the plant's processing area and cold storage facility will employ 30 people.

Michael McCain, president of the U.S. subsidiary, said the plant will have the capacity to produce the company's entire West Coast frozen concentrate requirements.

Back east in Maine, there was good news on the potato front as McCain Foods received word from Burger King Corp. that it was named a designated French fry supplier to the Nation's No. 2 fast food chain. The announcement was particularly well received by the Easton area (a town just across from the Canadian border, not far from McCain's Florenceville headquarters) where spur farming has been in decline.

"The more McCain can sell, the more it can buy," potato farmer Gerald V. Flewelling was quoted as saying. "The institutional market is where the money is."

With fast food restaurants using some 60% of the 4.5 billion pounds of French fries produced in 1987, the Burger King account is considered a prize by McCain. Plans call for the packer's two Maine factories to process approximately 250 million pounds of frozen spud products this year, grossing about $100 million in revenues.

The McCain coup was due in no small part to some bidding from Carrols Corp. of Syracuse, a Burger King franchisee with 149 units in New England and other states. Its reason to procure fries closer to home rather than from traditional Western processors was simple: to save about $300,000 a year in freight charges.

After B.K. test marketed the McCain spuds in upstate New York and eastern Ohio, the first quality hurdle was cleared. Next came a larger, test in a number of Burger King's company-owned stores. Shortly thereafter the chain's quality control experts gave McCain the green light.

But while a good selling job got the order in the end, much credit was also heaped upon technical advances in storage which better maintained freshness.

"It's less a question of the quality of the potatoes, and more a question of storage," said David J. Connor, president of Carrols. He added that the franchisee would purchase a "significant" volume of French fries from McCain.

McCain was said to have spearheaded the drive to upgrade storage practices as part of its drive to win business from Burger King. "We weren't ready for it 10 years ago," admitted Flewelling, the Easton farmer. "We are now."

$80 Million Ice Cream Plant Could Shake Up U.S. Market

Either it's a bold step into national marketing of ice cream and frozen desserts, or it's an $80 million white elephant. Whatever it is, Carnation Company will reap the rewards or the blame.

Carnation hopes to turn what has traditionally been a regional business into a national one through modern manufacturing techniques instead of the traditional reliance on marketing and distribution.

The plant, located in Bakersfield, Calif., will increase Carnation's capacity by 35%, while cutting the labor force to a mere 150 and enabling the company to introduce new products rapidly. But the question is, will Carnation be able to sell 35% more ice cream?

Carnation is looking to gain an edge in premium ice cream and ice cream novelties. In premium ice cream, it is now in third position behind Kraft and Dreyer's; while in novelties it is way behind Gold Bond (Popsicles, etc.), producing only about a third of the leader's volume.

To succeed, Carnation will have to start selling 35 million gallons of ice cream and novelties, vs. the 20 million produced by its old plants in Los Angeles and Oakland, which are being shut down. And it must compete with Dreyer's, which is building a new plant in Union City -- it has only a third the capacity, but costs a mere $12 million.

Although the $1.5 billion novelty segment has grown 50% in the last five years, that growth has slowed recently, and there are so many -- literally thousands -- products on the market, it is hard to get attention for new introductions. Carnation's plant can produce 52 million dozen novelties a year, five times as much as most plants.

Relying on computers and automation rather than the traditional labor intensive methods, the plant will stress teamwork, with workers doing all sorts of jobs under little or no supervision. The plant is also designed so that different parts of the production cycle can be expanded without interrupting production -- nobody has to worry about losing business during a shutdown.

Output per worker should be four times that at the old plants, Carnation says, and some of the production will be in products developed in Europe by Carnation's parent company, Nestle. But the plant will also take over production of Heaven Bars, previously farmed out to other dairies, and the real volume gains are expected to be in items like Drumsticks and Eskimo Pies Carnation makes under license.
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Publication:Quick Frozen Foods International
Date:Jan 1, 1989
Words:1025
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