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4. McCain Foods of Canada produces 31 per cent of all the french fries in the world. Why then is the company's Vice President of Marketing worried that McCain may not make it?

Mark McCauley, Vice President of McCain Foods, is worried. As time goes on, consolidation is increasing in the food distribution business to the point where only a few companies control most of the market. He wonders if McCain, a global leader in food products, will be big enough to survive.

Just how big do you need to be to make it in global food manufacturing? McCauley points to the latest figures showing that 65 grocery retailers now operate outlets outside their home country. He further notes that only four companies control 44 per cent of the world's fast food industry.

Increasing the pressure a few points higher is the fact that traditional food companies are no longer the only players. Wal-mart, the world's largest retail chain, is also the fastest growing grocery distributor in Canada with plans to double its food operation in the next three years.

What does all this consolidation mean for Canadian companies like McCain? He observes that worldwide retailers increasingly prefer to deal with suppliers who can meet demand on a global scale. They also want world class service. "At McCain, we have an office in Chicago just to service McDonald's."

"You need to be number one or two on the retailer's shelf," he notes.
It can be an intimidating environment, but with the right planning, there is hope. For one thing, regional protectionism has to come to an end, because, says McCauley, "it impedes the ability to ship products."

Canadian manufacturers need to be global players with the same input costs as companies elsewhere in the world. "If our costs in Canada are double, then we are uncompetitive. Production will go where input costs are lowest."

McCauley is also calling for a national strategy on promoting Canadian food products. In southern Ireland, he notes, "they've labelled themselves the bread basket of the world even though our exports are twice as much. We have the world's safest supply of food but how many people know that?"