Global

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  • Industry: Food, Drink & Consumer Goods
  • Type: Business and industry issue
  • Date: 6/12/2013

First person: Diversification is healthy, says McCain President and CEO 

First person Diversification
Dirk Van de Put, president and CEO of McCain Foods, reveals why – and how – he plans to transform the global potato business.

At a time when organizations are scrambling to keep pace with shifting customer preferences, transformational leadership has become a popular management style of the modern CEO. For an example of a leader transforming a multi-billion dollar company, you’d do well to start with Dirk Van de Put, president and CEO of McCain Foods. With 46 manufacturing facilities and 36,700 supply partners worldwide, McCain is the largest producer of french fries for both retail grocery chains and foodservice markets. Its products generate an impressive US$8bn in annual sales.


You’ve announced plans to double the capacity of your potato processing plant in Harbin, China. How do you see McCain’s presence in emerging markets?


Van de Put puts India ahead of China as a country with huge growth potential

Potato eating in China is under-developed. It exists through the KFCs and McDonald’s, but through retail it’s almost non-existent. The potential is there – the Chinese government has promoted the potato to the level of rice because it’s a crop that is better for the environment and gives higher calories per hectare. But the potential goes hand-in-hand with the growth of Western cuisine, which is going to take a while. India is a region where people consume a lot of potatoes, mostly in curries. The potential right now in India is much bigger than in China because potato consumption in the world: that is another exciting market for us.


What role is acquisition playing in the company’s growth?


We’ve made more acquisitions this year than in our history. We’re looking at acquisitions on two fronts. Can we bring in-house different technologies and forms of potato making that we currently don’t have? The other is, can we move faster in emerging markets by finding a short cut? We’re also experimenting with new food categories. Over time we’ll add another priority to complement potatoes, because it makes sense not to be focused on one type of product in terms of financial stability. You’ll see us buy smaller businesses in certain regions of the world in order to understand a particular food category much better, experiment with it and see if it’s a good idea to scale out.


McCain recently changed the ingredients of many of its products making them more natural and recognizable to consumers. How big of an issue is the health movement for food companies?


A very big issue. We had to try and find replacements for ingredients that would still allow the product to behave and taste the same. The benefit is a commercial that says ‘Made with ingredients found in your own kitchen’, but the work behind the scenes has been enormous. One of our pizzas had to go through 56 different iterations until it was what we wanted. We haven’t solved the puzzle in all of our products – and that’s where it gets tricky. Do we get rid of those products or keep looking for alternatives to certain ingredients? As for our french fries, we’ve eliminated trans fat and have reduced saturated fat by 45% since 2007.


McCain is already the world’s top producer of french fries. What is the diversification strategy as it relates to potatoes?


There are six main ways people eat potatoes: french fried, mashed, baked, boiled, as an ingredient in soups and curries, or cut into cubes and pan fried. Our biggest opportunity is to take what people do at home with potatoes and give them the more convenient version. A baked potato takes about an hour and half in the oven. We just launched a year ago in the UK the microwavable version of a baked potato that is ready in five minutes and tastes like it came out of the oven. And while we’re not quite there yet, there is a way to make a french fry without frying it. We call that the Holy Grail of our business because then we would have a product with very little fat, rich in nutrients and an excellent source of calories.


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