Our new seasoning mix line has a production rate that is approximately nine times faster than the equipment it replaced. Productivity improvements and capital investments enabled us to consolidate several manufacturing plants.
Wet sauces and pastes — including these McCormick brand Szechuan pastes recently launched in China — are a fresh alternative to dried herbs and spices in markets around the world.
In 2006, we acquired Thai Kitchen® and Simply Asia®, fast-growing brands that offer U.S. consumers authentic, easy-to-prepare Asian dishes. Since 2002, sales of these products have grown at a 32% compound annual rate.
Key Initiatives
Advancing: Since 2000, our gross profit margin has increased by 6 percentage points, reaching 41.0% in 2006. Driving gross profit margin improvement are better productivity, improvements in our supply chain and other cost reduction actions. In addition, with new products and acquisitions, we have shifted our business focus toward higher-margin, more value-added offerings.In 2002, we launched a global initiative that makes efficient use of state-of-the-art information technology. This was followed in 2005 with an ambitious restructuring plan under which we are consolidating our global manufacturing and distribution facilities, eliminating administrative redundancies and creating a more efficient way to market and sell our products. Actions taken under the plan reduced our costs by $10 million in 2006, and are expected to generate another $40 million in cost reductions by the end of 2008.
Innovating: Innovation is vital. In 2006 10% of our sales came from products that we have introduced since 2004. Current trends driving what consumers purchase and prepare include freshness, convenience, ethnic and wellness. Our new product platforms reflect these trends and include authentic Hispanic products, organic herbs and spices, wet sauces and pastes, and low sodium items. We also pursue innovation — opportunities for growth — through the acquisition of complementary brands and businesses.
We are a global leader in providing flavor to the entire food industry. We plan to maintain and strengthen that leadership through continuous innovation made possible by our unique ability to expand our flavor platform.
