Ellsworth McKee: From Lean Times To A $1 Billion Operation

Wednesday, March 5, 2008
Ellsworth McKee
Ellsworth McKee

Ellsworth McKee told the Hamilton Place Rotary Club on Wednesday how his family went from sleeping in the back of a small bakery on Dodds Avenue to operating one of the most successful bakeries in the country with over $1 billion in annual sales.

He also told the club the huge operation now based in Collegedale rarely made a profit in the early years.

Mr. McKee said his father, O.D. McKee, first worked pulling corn at 50 cents a day. He said at the time the family lived in a tiny log house that had been built for slaves.

He said O.D. McKee met a cookie salesman and inquired about following that trade. The salesman said the company had an opening in Chattanooga.

The speaker said his father began peddling cookies out of a 1929 Whippet. He said he would take the back seat out of the Whippet while working during the week, then put it back in on weekends.

He said his father got involved with a small bakery on Main Street, then in 1934 moved to Dodds Avenue, where Goodwill Industries is now located. He said at first O.D. McKee put up a sheet near the back of the bakery and the family lived behind the sheet. The milk was kept in a cellar below the back area. He said later the family lived in a small house near the bakery on Dodds.

Mr. McKee said his father had taken courses at Southern College in Collegedale, but he had dyslexia and never finished. He quit because his brother took a different course of study and quit reading his lessons to him. O.D. McKee was told he could get his diploma if he ever finished two final courses. Ellsworth McKee said years later Southern officials found that old diploma and presented it to him.

O.D. McKee decided in 1946 to move to Charlotte, N.C., to start a bakery there. Ellsworth McKee said he remembers his first job there was painting some metal pipes that were to be used for trusses in the bakery building. McKee in 1948 handed over the bakery to Herman Lay, who later started the Lay's Potato Chip empire. He said Lay soon came back to McKee and told him he "couldn't do anything with it and wanted him to take it back."

The speaker said the family had to sell their home and move into the back of the Charlotte bakery to make ends meet.

He said the family returned to Chattanooga in 1951 and were involved with his uncle, Cecil King, in a bakery. O.D. McKee acquired it in 1954.

He said in 1956 the bakery needed to expand, and Southern College offered property out at Collegedale. But McKee was skeptical because it was so far out and only two trucking firms would go out that way - one three times a week and another two times.

He said O.D. McKee talked with Dr. Lee Roberson of Tennessee Temple to see if he would make a similar offer. But he said Dr. Roberson chose instead to work on an expansion of the campus in Highland Park.

So it was decided to move out to Collegedale - with construction beginning in 1956. The cookie line went into operation the following year and then a cake operation followed.

The firm came up with a popular snack, but it needed a name. He said O.D. McKee was talking with Bob Moshier and was mentioning his grandchildren. When he got to Debbie, Mosier said, "Little Debbie. That has a ring to it."

The speaker said times remained sparse during this period. He said once the company paid $2,200 to the IRS. He said, "An auditor came out and they gave us the money back."

He said he began studying the operation and told his father "we are losing money on two-thirds of our product line."

By the early 1960s, he said McKee Baking Company began making a profit.

Now he said it has 6,300 employees and produces over 100 food lines.

He said some of his favorites are Nutty Bars, any hard cookie and the new Smores. He said, "We took three boxes of Smores with us on a recent trip to Walla Walla."

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