McCORMICK
McCORMICK & COMPANY 2007 ANNUAL REPORT
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As part of our CreateIT process, we bring together culinary chefs, sensory experts and flavor technologists to discuss trends and develop winning new product ideas.
   
         

 


MARK > Our GrillMates® line in the U.S. is a good example. It began in the early 1990s with a single seasoning blend that originated in Canada. Today 31 GrillMates® items include marinades, rubs, reduced sodium varieties and more. Year after year we have grown sales of these products at a rapid pace, and annual sales are now $35 million.
    Following the acquisition of the Ducros brand in Europe, we introduced three Ducros grinders in the U.S. under the McCormick label. Six years later, these products have reached $22 million in sales with 14 varieties.
    We have also been expanding our products designed for consumers of Hispanic descent. These products now account for 8% of U.S. consumer sales, and they grew 11% in 2007.

BOB > The Hispanic items we offer include mayonnaise and marmalade imported from McCormick de Mexico. This 60-year-old joint venture has made McCormick the leading brand in Mexico, and Hispanic consumers in many U.S. markets actively seek these products. This highly successful joint venture now accounts for most of our income from unconsolidated operations, which in 2007 comprised nearly 10% of our earnings per share.
    We can’t overlook two other avenues of sales growth – our marketing programs and acquisitions.

 

ALAN> We have increased our level of brand support in recent years and are getting better each year at measuring the effectiveness of our spending. We are seeing the best returns from our public relations activity, print advertising and television advertising.
    As for acquisitions, they’ve accounted for one-fourth of our 7% average annual sales growth in the past five years and will continue to be a key part of our sales growth. Our recently announced agreement to acquire the Lawry’s business is evidence of our continued progress with acquisitions. In our developed markets, we are seeking niche brands that have a distinct flavor profile. In markets where we currently have low penetration, including emerging markets, we are targeting leading brands.

Besides acquisitions, how will you grow sales outside North America?

LAWRENCE > Europe is our second-largest market, contributing 25% of Company sales. Many of the same consumer business initiatives we talked about for North America are driving our growth in this market.
    New merchandising systems introduced in the U.K. and France are designed to simplify the shopping experience, reduce labor and optimize our shelf space. Product innovation includes an award-winning spice package, easy-to-use

 

 
 
McCormick & Company 2007 Annual Report        7
 
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