No Place Like Home
by Larry Aylward, managing editor
Mary Alice McKenzie sits in a chair behind her modest desk in her small, ordinary office. It's Monday morning, but nobody is fetching her-the CEO and president of John McKenzie Packing Co.-a cup of coffee.
Mary Alice McKenzie relinquished a career in law to return to Vermont and the family business
Things could be different for the 37-year-old McKenzie, a graduate of Valparaiso University's law school. She could be living and practicing law in big-city Chicago. Her office could be swank. Somebody would be getting her that cup of coffee in a flash.
Instead, McKenzie finds herself in her hometown-quaint, slow-paced Burlington, Vt.-running an 88-year-old family business, which processes specialty hams, bacon, hot dogs, sausages, luncheon meats, and turkey and beef products. The company was started by McKenzie's great-grandparents, who were farmers who sailed to the United States from Ireland.
McKenzie once lived in Chicago and loved it. She practiced law in the Cook County state's attorney office. It was a dream job with a promising future.
But one day her father, John, called and asked Mary Alice to come home and join him in running the family business. Down the road, she would take over the business.
"The thought of being able to work with my dad was very important to me," she says. "And I didn't know what would happen to the business if I didn't come back."
McKenzie returned to Burlington and the family business in 1984. She became president and CEO of the company when her father died in 1989. She is also AMI secretary, and in 1996 she is scheduled to become AMI chairman-the first woman to hold the post.
"Looking back, I made a great decision," McKenzie adds. "I can't imagine anything better than this. I love this job-everyday."
So does Arliene Torre, McKenzie's administrative assistant, who has worked at McKenzie Packing for about 30 years. "I remember Mary Alice when she was a student and worked here in the summers," Torre says. "It's great that she is president. Her father would be proud of her."
McKenzie Packing is a small company with 55 employees and about $12 million in annual sales. McKenzie is in her sixth year as president and CEO. Her 32-year-old sister, Julie, an accountant with a master's degree in finance, is a mainstay in the business. Their 31-year-old cousin, Mark Dubie, is the plant manager.
The company, which started in 1907, has a reputation for consistency, but many changes have taken place.
One of the biggest changes took place in June. McKenzie merged with Burlington-based Waterbury Holdings of Vermont, which focuses on investments in the specialty food manufacturing and distribution areas. The merger allows McKenzie to access new markets and channels of distribution.
"No move is without risk, but this move makes a great deal of sense," McKenzie says. "I've spent a considerable amount of time studying where food companies are headed, and strongly believe that those that remain competitive will define a niche and have strong resources supporting them."
Bill Davis, CEO of Waterbury Holdings, says the merger makes sense. "This relationship fits well into our strategic plan to provide marketing, management, sales and distribution support to specialty food companies," he adds.
Historically, McKenzie Packing serviced mom-and-pop retail operations throughout Vermont, New Hampshire and upstate New York. But in the 1980s, retail chains and warehouse stores began moving into New England, bringing with them the less-expensive meat products of the world.
McKenzie Packing, the everyday center-of-the-shelf brand and more expensive product, was forced to revamp its marketing strategy to find its niche in the market place.
"We had to wake up and say, 'What's going on in the world and what's our place in it?' " McKenzie says.
Suddenly, McKenzie Packing's products were labeled as premium. "It was like a back-handed compliment," McKenzie admits. "But on the other hand, it was a good thing we had a quality product to rely on. If we had tried to be the low-cost producer with a low-quality product, we would be out of business right now."
Forced to adapt
The company went through a major transition beginning about five years ago. It wanted to get away from distributing commodity products it didn't manufacture, such as onion rings. That meant downsizing the company.
"It was a big and hard transition," McKenzie points out. "It impacted everyone. It was traumatic for the organization."
No employees were laid off, but some were offered and accepted early retirement packages. Some employees who resigned or retired were not replaced.
The company also began pushing into other eastern regions because the economy in Vermont is not flourishing. "We're a premium product and a premium product doesn't sell well in a down economy," McKenzie points out.
McKenzie Packing's products are now sold in New Jersey, Washington, D.C., and Baltimore. McKenzie wants to sell them worldwide.
"We're at a point now where we are structured correctly," she says. "We are emphasizing our manufactured products and it helped increase our margins."
The company has a geographical marketing advantage: the aura of quality encompassing Vermont. "There is a perception about Vermont products that I believe is true. Everything the state does to promote itself is wrapped around quality," McKenzie says.
The company is spending more time and money on research and development. Employee suggestions for new products do not fall on deaf ears.
For example, thanks to employee ideas, McKenzie Packing now manufactures an apricot-flavored ham, a real maple syrup-flavored sausage and a raspberry-flavored turkey breast.
McKenzie Packing's most successful products are its hams and smoked turkey breast. The hams are maple-sugar cured and sweetened. They contain little water and are lean. The company's No. 1 selling hot dog is processed with a natural casing. Its products are smoked in real-wood smokehouses consisting of Vermont maple and a bit of corncob.
Stock in HACCP
McKenzie Packing plans to improve the quality of its product through its Hazard Analysis and Critical Control Point program, which the company recently began implementing. Ironically, many similar-sized small processors believe USDA's science-based inspection proposal, which includes the implementation of a mandatory HACCP system, could lead to their demise because of cost.
"We're a small processor, and we firmly believe that [HACCP] is the only way to go," McKenzie says. "[With it, a company] can turn out a better and more consistent product. HACCP will not put a small company out of business if the government allows the company to approach it in the right way."
Small processors need to be patient and allow themselves enough time for planning and the implementation of procedures, McKenzie notes, adding that the process can't be completed in 30 days.
Another challenge-and opportunity-packers and processors face is dealing with a global marketplace, McKenzie points out.
"There will be intense competition to be a player in different markets," she predicts. "It will be a challenge if you are a big company or a little company."
McKenzie sees waves of consolidation on the horizon. Also, more European companies will become active in the U.S. market.
Back home
Closer to home, McKenzie Packing may attempt to strengthen its position in the foodservice arena. The company's products are in about 2,000 retail establishments. McKenzie would also like to introduce more computer technology throughout the plant.
On a management level, McKenzie hopes she is perceived by employees as an approachable person.
"I think people feel they can talk to me," she says. "I would be surprised if they didn't feel that way because people talk to me all of the time about work and personal issues."
Plant employees recognize that McKenzie is hardly aloof. Paul Prim, the curing department foreman and an employee for 26 years, called Mary Alice's father a "pleasant man."
"She follows in his footsteps," Prim adds. "They have been very good people to work for."
McKenzie has not thought twice about leaving the legal field and returning home.
"There's a work ethic here that can't be beat," she says. "We are very small, but in Vermont terms we have supported our community for a long time.
"I'm proud of that heritage and intend to continue it by creating quality products and quality jobs."
Mary Alice McKenzie, president and CEO of John McKenzie Packing Co. and AMI secretary, addresses the following issues affecting the industry:
-- On IBP inc., AMI's largest due-paying member, leaving the association: "It's never great when a dues-paying member leaves. Does this mean AMI will go down hill? No. IBP and AMI are approaching this with the right attitude. There is a lot of communication going on. There is no attempt on AMI's part to leave IBP out in cold. And IBP is not being harsh with AMI. Hopefully, IBP will come back. The door is wide open."
-- On the mandatory institution of a Hazard Analysis and Critical Control Point program by USDA and how it would affect small processors: "When you're a small processor, it takes years [to develop a HACCP system completely]. You don't have a quality control department to say: 'Design my HACCP program for me.' You don't have enough money to pay someone $100,000 to come in and do it for you. You have to use the people you have. You have to prioritize your product lines and decide what you want to tackle first. What you find is that once you go through a line and implement a plan, the next one becomes that much easier. But there has to be a special sensitivity shown to smaller operations [by USDA]."
-- On politics in USDA: "One of the problems with USDA is that it has become intensely political. I don't think there are people there who are bad or have bad intent. But it has become a very political department. At some point, that has to stop, and we have to work together to solve problems. If we do not work together, the ultimate victim will be American agriculture."
-- On being the first woman chairman of AMI, beginning in 1996: "It's a non-issue to me, but if people are interested in it, then why not talk to them about it."
-- On the Western States Meat Association becoming the National Meat Association to better reflect a more national membership: "It is curious in a way to start another organization at a time when you have fewer potential members and probably will have fewer potential members for some time."