McKee Foods serves niche for baked goods

"Fill a niche" is one of the business principles adhered to by O.D and Ruth McKee.

The couple has done it so well that they not only weathered the Great Depression, but they now have a family-owned company with properties in four states in which some of their grandchildren are company executives.

"I have been with the company since 1979," said Clay Belcher, the Kingman distribution center manager for McKee Foods.

"The company has transitioned into its third generation of leadership as far as management goes."

McKee Foods began in 1934, when O.D.

and Ruth McKee bought a small Chattanooga bakery known as Jack's Cookie Co.

They recognized a good business opportunity in light of how well O.D.

had done selling 5-cent Virginia Dare cakes out of the back seat of his 1928 Whippet car.

Ruth McKee hired a housekeeper to look after their children, and she joined her husband as an active partner in the business.

In 1957, they relocated to Collegedale, Tenn.

McKee Foods now has three manufacturing and distribution plants in Collegedale and one each in Stuarts Draft, Va.

and Gentry, Ark.

In 1994, they opened a distribution center in Kingman's Interstate 40 corridor.

"Kingman was a bit of a business risk for McKee Foods," Belcher said.

"We had not experimented with a distribution center alone before, but we were certain it would be a good investment.

"Our biggest concern was sacrificing shelf life (of the products) or percentage of orders filled because of the logistics of getting items out here, off-loaded and then reloaded and delivered.

But we've proven ourselves the past eight years as being a customer-oriented concern that is totally filling orders, providing fresh products, delivering them in a timely manner and at a good price."

The Kingman operation employs 85 full-time workers.

Plant drivers deliver Little Debbie snacks and Sunbelt snacks and granola cereals to mini-warehouses rented by independent distributors through the West.

In turn, independent distributors ensure the products get into stores in Arizona, Washington, Oregon, California, Idaho, Montana, Utah and Nevada.

Belcher said Kingman was chosen as a McKee Foods distribution site for two reasons.

"We used to deliver to the areas we now serve from our Gentry, Ark., plant and Interstate 40 is a direct shot west," he said.

"While we get the majority of our products from Gentry, we receive products from all of our manufacturing locations because not every facility makes every variety of product, so the logistics of being in Kingman are really good.

"Secondly, weather can be a real issue for those of us in transportation.

Although we deliver into some areas that get (inclement) weather, we don't tend to have as many problems getting the products out here from the other locations."

Western pricing applies to items shipped from the Kingman plant, which means products cost about 10 cents more to cover transportation costs than if they were eastern priced.

Little Debbie has about 160 varieties of snack products.

"Little Debbie dates back to the 1960s, when multi-packs were developed and the business really started to expand," Belcher said.

"Individually wrapped cookies and pies were an innovative concept back then, and it really caught on."

The Sunbelt line includes more than 19 varieties of snack cakes and granola-type cereals.

That product line began in the mid-1980s.

Shelf life is a critical concern to perishable foods.

McKee Foods guarantees a certain minimum shelf life on its products to independent distributors.

The guarantee varies with the product.

"An item like crackers has a shelf life of 120 days, so our guarantee to distributors is 59 days," Belcher said.

"Once it drops below its shelf life, we look for another avenue.

"Some items have a shelf life of 25 days, so it's pretty challenging to get them to distributors and still have shelf life left."

The research and development division of McKee Foods in Collegedale determines how long each product's shelf life is, Belcher said.

"If we can't meet the shelf life guarantee, we won't send that product to an independent distributor," he said.

"The product still has time left but the distributor wouldn't have enough time to sell it before its expiration date.

"That leaves us two avenues for dealing with the product: our thrift store and food banks."

Products past their shelf life but still not beyond their expiration of freshness date are sold at discounted prices each Wednesday between 9 a.m.

and 5 p.m.

at the distribution plant on Oatman Road.

Some items are donated to the Kingman Area Food Bank as well as food banks in Phoenix and Flagstaff, Belcher said.

Belcher was asked how the company goes about determining what consumers want.

"We have a research and development department and we get a lot of feedback from our independent distributors," he said.

"They're probably closest to the consumer and retail store selling the products, so we get a lot of ideas from them.

"Of course, we're always looking at the competition just like they're looking at us to see what's working and where market trends are going," Belcher said.

In addition to filling a niche, other business principles of McKee Foods include: honesty; being willing to change; valuing the customers; be demanding of self and others; finding opportunities; treating people right; being confident of abilities; don't be discouraged by setbacks; be ethical; and find a better way.