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Wallace McCain: from small potatoes to big-time success

Maple Leaf Foods Inc. Chairman Wallace McCain in 2010.

MIKE CASSESE/Reuters/MIKE CASSESE/REUTERS

Wallace McCain was born into a family of New Brunswick potato farmers, and he grew up with a flair for earthy language and a gift for growing companies. Both traits were dramatically present as he co-founded and built a global frozen-food colossus, before being exiled in a famously bitter feud with his brother Harrison.

Ousted from McCain Foods Ltd., McCain bought and turned around another iconic food company, Maple Leaf Foods Inc., and emerged as a generous philanthropist, whose causes ranged from grooming East Coast entrepreneurs to nurturing ballet dancers in Toronto.

This business lion, who spearheaded the growth of two Canadian corporate giants, died on Friday at 81 after a 14-month battle with pancreatic cancer.

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He was a distinctly Canadian role model – a tough billionaire with fiercely held social values.

"He was a steely-eyed, hard-nosed capitalist who took an idea and created the largest French fry business in the world," says his friend Frank McKenna, deputy chair of Toronto-Dominion Bank and a former New Brunswick premier. "To prove it wasn't a fluke, he did it again with Maple Leaf.

"But the other side was a warm, caring individual who believed there is a legitimate role for government – that you need to pay your taxes, not avoid them, and who believed in public health and early childhood education."

McCain's large, rollicking life had several acts, beginning with his creation of multinational McCain Foods, with his three older brothers, most notably Harrison, with whom he served as co-CEO for decades. The two became a powerful and inseparable brother act who, at McCain Foods, built a rare Canadian-based consumer-products champion, commanding a third of the world market for French fries. And they did it all from tiny Florenceville, N.B., flying in and out on corporate planes that plied the small air strip behind their adjacent homes overlooking the Saint John River Valley.

McCain Foods now holds diverse interests, spanning frozen cakes and pizzas, food services and transport trucks, compiling annual sales of $6-billion with 20,000 employees in more than 60 countries.

But these achievements were tragically overshadowed by an angry battle with Harrison over the suitability of Wallace's son Michael to be their successor. In the early 1990s, the quarrel exploded into a legal wrangle that polarized the McCain family and forced Wallace from the company (while remaining one-third owner) and out of New Brunswick.

He and sons Scott and Michael scoured the world for another venture to run, and found it in 140-year-old Maple Leaf Foods. They resettled in Toronto, but the family split left deep wounds. "The biggest thing that happened to me in the past 25 years – and in my life – was being unceremoniously dumped from McCain Foods," McCain said in 2009.

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He and his sons, with funding from Ontario Teachers' Pension Plan, took over Maple Leaf, a creaking old meat-packing giant with bakery and agribusiness interests, and nursed it back to better health. But Maple Leaf, with Michael as CEO, has faced its own challenges, including shareholder impatience, a rising dollar, and a near-death experience in 2008, when an outbreak of listeria threatened to sink the company's reputation.

The McCains met the listeria challenge head-on with a policy of frank and open communications, and Michael became a role model for crisis management.

The McCains came to Canada from Ireland 185 years ago and found a home along the Saint John River Valley. For generations, they were potato producers in an area where the lowly spud ruled supreme.

Wallace was born on April 9, 1930, in Florenceville – the youngest of six children raised by Andrew and Laura McCain. Andrew, known as A.D., sold seed potatoes internationally, giving the children an early sense of world horizons. Wallace was particularly close to his next oldest brother, Harrison. As boys, they shared a bedroom in the farmhouse, along with outsized dreams of doing something big.

As a young man, Wallace was a hell-raiser, who got drummed out of Acadia University in Wolfville, N.S., for carousing. "At Acadia I didn't do any work. It was a Baptist school and I was in trouble all the time," he recalled. He suffered a similar fate at University of New Brunswick, before he finally settled down at his third school, Mount Allison University, from which he graduated with a degree.

In the world of New Brunswick business, families such as the Olands and Ganongs dominated business life, and the most powerful of all were the Irvings, the forestry and energy clan based in Saint John. From birth to death, Wallace's life was marked by a delicate tension with that other famous family.

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Fresh out of university, Wallace and Harrison went to work for shrewd empire-builder K.C. Irving. Harrison worked on the oil side, while Wallace was a manager for Irvings' Thorne hardware arm.

Wallace was particularly close to K.C. Irving's high-spirited middle son, Arthur. "Art and I used to run around together, visit the odd girl," Wallace recalled. "We were both single and raised a little hell and we were at the Irving house a lot."

He would stay overnight with the Irvings in Saint John, and talk about business. When he got very sick from ulcerative colitis, and local doctors gave up hope, K.C. offered his plane and secured a bed in the prestigious Lahey Clinic in Boston, where the young man's life was saved.

Wallace had to undergo a rare procedure for the time, a colostomy, but he got back to building his life.

Eventually, the McCain brothers grew restive under the Irving thumb and wanted to run their own show. Older brother Robert suggested getting into frozen food. In 1957, they started up a new business making French fries, with 30 employees, in their home town.

Their timing was remarkable, as they pioneered a huge fast-food category just as the phenomenon of dual-income busy families took hold. Armed with brash exuberance and a flair for colourful language, the brothers took their strategy across Canada, but they didn't stop there. They fearlessly expanded offshore, first to Britain and then to mainland Europe.

In country after country, they used using a formula of inundating the market with Canadian fries, then, when the market was receptive, building facilities to draw production from local farmers. Harrison was the front-man, a pepper-pot with a motor mouth and a million-dollar smile. The rangy Wallace had his own quieter charisma, and thrilled to be building new plants and running the nuts and bolts of companies.

"Harrison was the upfront person and Wallace the operator, although he could deal with people too," says Bay Street lawyer Purdy Crawford, a Nova Scotian who was one of Wallace's closest friends. "They were quite a team – they built an organization around the world from a base in Florenceville. They would take off Sunday night or Monday morning from the air strip and come back Thursday or Friday if they were lucky."

If they needed an acquisition, they would call long-distance to Cedric Ritchie, a local New Brunswick boy who had risen to the top of Bank of Nova Scotia, eventually becoming the bank's CEO. That banking relationship became key to their growth.

This perfect partnership was defined by huge ambition, and a vast vocabulary of colourful cuss words. Frank McKenna would joke that if the McCain brothers were ever prevented from cursing, they would become functionally illiterate.

Mr. McKenna said after spending time with the McCains, he had to take a day or so to cleanse his own vocabulary. "They used profanity constantly but they weren't profane," he says. "They were descriptive words but there was no malice or wish to offend."

The McCains were hard-nosed tycoons, but for Wallace, there was a gentler side too. At Mount Allison, Wallace had met and later married Margaret Norrie, a Truro, N.S., native whose family had Liberal Party ties like the McCains. They were both highly driven strivers and formed one of the most formidable partnerships in Canadian public life, as Wallace piloted the business side and Margaret McCain put a huge imprint on social activism and philanthropy.

Michael McCain recalled that while Wallace built the business, often spending 140 nights a year on the road, Margaret was willing to stay at home raising the children. But when that task was largely complete, the other part of the bargain kicked in. Margaret announced that it was her turn to get into public life, and Wallace was supportive.

"They were totally in love with each other and every single day, they looked to each other to find strength and to enjoy life," Mr. McKenna says.

Margaret poured many of her energies into enhancing Mount Allison, which in family parlance became known as "Mount Margaret." But her causes are many – from public education to mental health – and she served as the first female lieutenant-governor of New Brunswick.

Wallace also found time to show his loyalty to friends and fellow Maritimers. In the 1960s, John Bragg was a young businessman in Oxford, N.S., with a dream of building a frozen-food plant to process wild blueberries.

He didn't know Wallace, but through a mutual friend, he contacted him for advice. "So I went ahead and built the plant," Mr. Bragg says, "and I said, 'Geez, I need something to fill up capacity.'" Again, he called Wallace, who said he needed someone to make onion rings for him. It helped propel Mr. Bragg to business success, which has taken him beyond food to become a communications baron.

The Braggs are still making onion rings for McCain Foods. "Only in the Maritimes do you get a 40-year contract," Mr. Bragg says.

It was perhaps inevitable that the rising McCains and the intensely territorial Irvings would clash. So the Irvings went into the French fry business with their own Cavendish Farms brand. They bought a transport business to rival the McCains' Day & Ross. But the rudest incursion came in the early 1990s when they proposed a new French fry plant in Prince Edward Island supported by federal government subsidies. The McCains countered with their own proposal, and unleashed a lobbying effort. Irvings built the plant without subsidies, but the relationship was never the same.

Mr. McKenna says as premier he figured he got to run a third of the province and the McCains and Irvings each ran a third.

"The only trouble is they couldn't agree on which third everybody had," he said. "The art of being premier was to adjudicate that."

The late 1980s-early 90s were McCain Foods' heyday of global expansion but the seeds of calamity were being sewn. The brothers occupied adjoining offices in the McCain Foods' head office with a private door connecting the two rooms. It was usually open, but not for conversations about who would ultimately succeed them.

In 1990, a reporter visiting the McCain headquarters in Florenceville noted a strange equivocation on succession. Asked about a successor, Harrison said simply: "Talk to Wallace there." Wallace pointed to Harrison: "He's in charge." What about Michael, Wallace's younger son, then 31 and running the U.S. operations? Harrison said he would not talk about it. Is Michael interested in the business? "Very" was Wallace's terse response.

The McCains were suffering from a common entrepreneurial malady. As they went flat-out to build a successful company, they deferred any talk of who would succeed them. In their sixties, they suddenly looked up and discovered fundamental disagreement. Wallace was convinced business-school-educated Michael was a natural successor; Harrison was just as convinced he wasn't, and at one point tried to sack Michael. That disagreement broke out into open warfare, which ended in a Fredericton court and with Wallace being ousted from his executive job.

The two brothers spent years in bitter estrangement until, near Harrison's death in 2004, Wallace began to visit his sick brother – a measure of rapprochement that he cherished after Harrison's death from heart ailments.

He kept a keen interest in the old family business, and has been a confidant to McCain Foods' new non-family executives.

But his last 15 years were focused on Maple Leaf Food and his new life in Toronto. The McCains brought new technology and human resource strategies to Maple Leaf, but faced a global economy that was merciless. They radically improved the business, but it wasn't enough as the high Canadian dollar battered export markets and a new breed of investors put the family's feet to the fire.

Maple Leaf had made 25 to 30 acquisitions over the years and Michael's plan, at one point, was to bring it down to four or five businesses. It meant closing small factories, and merging companies.

"We were eight months into the plan when all those other things blew up," Wallace said. "Besides the dollar, wheat went up, corn went up, and oil went up. All this had happened and then the listeria crisis struck. The combination hit Maple Leaf Foods right between the eyes. Fortunately, we had a good financial base to take us through the chaos."

Wallace had handed the reins to Michael, but he felt like a caged lion as he spoke, in an interview in mid-2009, about his new role. "It's hard to sit on the sidelines. I said to my wife, 'I think I'll buy another company – a small one,' and she said 'Are you crazy?' But I'm not doing anything here."

Then he told the interviewer: "That's why I'm talking to you too much." But the truth is he was an immensely sociable person who loved to shoot the breeze.

In addition to his business smarts, McCain was a fantastic fundraiser, and his crowning achievement in that regard was the drive to rebuild the National Ballet School in Toronto. Margaret headed the fundraising and Wallace did a lot of the spade work, with his friend Crawford in tow.

Wallace's typical opening gambit, laced with curse words, was "I'm from Florenceville, I don't really like ballet but this is one of the great schools and an ornament for Canada." At Bank of Montreal, CEO Tony Comper quickly countered, 'Well, I actually like ballet.'"

"So you'll be good for a lot of [expletive]money then," said Wallace, not missing a beat.

The old warrior took a reduced role in Maple Leaf, but remained as a listening post for his sons and other managers. Outwardly tireless and vigorous, his health was never great, from the time he was stricken with colitis as a young man.

McCain was fighting cancer over the past year as Maple Leaf's performance and the McCains' leadership came under attack from an activist investor, who, in a negotiated truce, secured a board seat. The fact that long-time supporter, the Ontario Teachers' Pension Plan, had sold its interest only added pressure on the next generation, and particularly Michael, to deliver.

As for Wallace's role in the governance battle, "he didn't like it but he stayed out of it," Crawford says.

He had a life that made him rich beyond the wildest dreams of the little boy growing up in Florenceville. "But he never got important," says Bragg – and that is the ultimate tribute from a Maritimer.

McCain leaves his wife, Margaret, sons Scott and Michael and daughters Eleanor and Martha, as well as nine grandchildren.

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About the Author
Senior Writer, Report on Business

Gordon Pitts is an author, public speaker and business journalist, with a focus on management, strategy, and leadership. He was the 2009 winner of Canada's National Business Book Award for his fifth book, Stampede: The Rise of the West and Canada's New Power Elite. More

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