S.J. McCullagh, Inc.


> RESULTS

  • Received "Excellent" rating on first pass of HACCP audit
  • Retained all key accounts
  • >15% average annual growth
  • Developed quantitative measuring process to ensure production cost and consistent product quality

> COMPANY

S.J. McCullagh, Inc. (McCullagh Coffee), of Buffalo NY, is a manufacturer of coffee for institutional, restaurant, commercial and industrial accounts. The company, founded in 1876, has been under the current ownership since 1986. McCullagh Coffee currently employs about 60 full time workers within manufacturing, distribution, sales and support. The integrated manufacturing operation includes roasting, grinding, blending and packaging functions over 1 1/2 shifts within an 18,000 square foot facility. The company produces over 200 SKU's of coffee in various blends and packaging configurations in addition to providing over 1,000 ancillary items that help support the primary business.

> SITUATION

McCullagh Coffee's primary market had been business-to-business accounts within the Western New York area. Several years ago the company experienced a downturn in business due to several external factors. The growth of large, national chains significantly eroded business at local restaurants and diners. In addition, a number of out-of-state food service contractors began penetrating major institutional accounts, particularly in health care. The closing of numerous businesses, especially in manufacturing, further eroded the company's sales base. In order to offset revenue and margin losses within its primary markets, McCullagh Coffee began pursuing major business opportunities outside the local area. This approach resulted in several immediate gains among major national accounts that more than compensated for local business erosion.

However, company management was informally advised that food processing manufacturers may be required to meet the standards of the Hazard Analysis Critical Control Point program (HACCP) for food product safety. McCullagh Coffee felt that it was particularly important that they be perceived as a credible supplier among their major national accounts. An initial audit using a grading system was conducted by ASI, a food safety consultant, three years earlier indicating that they did not score at an acceptable level. Insyte Consulting was engaged to work with McCullagh Coffee's staff in order to achieve immediate compliance for this reason.

> SOLUTION

The first step was to conduct a gap analysis in order to determine where McCullagh Coffee was deficient against ASI scoring and what actions would be required to achieve an excellent rating from ASI. The ASI points are built around specific clauses for quality and food safety including the requirement to install HACCP as a key compliance component. Although many of the required activities were actually being done, it was determined that few of these were properly documented, thus providing no means of verification to their practices. A plan was subsequently developed by a joint team of Insyte Consulting and McCullagh Coffee staff that enabled the company to become compliant over a twenty week period. The HACCP process was created and posted to let everyone see how their role was important to McCullagh Coffee's quality and control. Weekly work sessions and focused training were conducted to introduce and implement the various processes and procedures into the organization. This included the means of documenting the completed actions, as well as the processes to initiate corrective actions as required.

The company attained an excellent rating on its first pass when audited by ASI. In addition to retaining all of its key accounts, the company realized several other important benefits as well. McCullagh Coffee has been able to maintain average annual growth of over 15% since meeting HACCP standards. This rate of growth, combined with a related reduction in their variable costs, has had a very significant impact on overall profitability. Most importantly the company now has a quantitative measuring process to ensure stable production cost, consistent food safety and product quality.


"The introduction of HACCP in conjunction with Insyte Consulting has been an important element of our overall strategic direction. It has enabled us to address changing market conditions and subsequently to positively react and pursue new national business opportunities. We learned if its not documented, you can't prove to a prospective buyer that the right procedures are in place and followed." - Warren Emblidge, President