BOSTON — Launching next year from McCormick & Co. are reformulated Zatarain’s rice mixes with no artificial dyes or flavors and no added MSG. The introduction follows similar moves within the Sparks, Maryland, company’s portfolio, including a recent conversion of spices and seasonings to non-GMO or organic.
These changes within McCormick’s core business are part of the company’s strategy to drive mid-single-digit long-term growth, said Lawrence Kurzius, president and CEO.
|Lawrence Kurzius, president and CEO of McCormick|
“Our long-term goal is to increase sales 4 to 6 percent, with similar contributions from the base business, innovation, and acquisitions,” Kurzius said during a Sept. 7 presentation at the Barclays Global Consumer Staples Conference. “For the last five years, through 2015, we have achieved 5 percent compound annual growth rate in sales, a growth rate that’s in line with our long-term goal. Our growth strategies are to drive base business, accelerate scalable and differentiated innovation, expand availability and footprint, and excel in customer intimacy and consumer insights.”
In addition to product renovation, McCormick is upping its investment in brand marketing.
“Compared to 2015, we’ve reduced non-working media 20 percent and redeployed those savings toward working media, which we expect to increase 12 percent this year,” Kurzius said. “We’ve stepped up our efforts across the globe to target millennial audiences through a variety of paid digital tactics, social platforms, and new content approaches.”
On the innovation front, McCormick’s product development wins for industrial customers this year have included snack chip seasonings, cracker seasonings, beverage flavors, ice cream toppings, sandwich sauces and burger seasonings. In retail, successful launches this year have included patent pending herb grinders and the expansion of liquid pouch technology in new formats.
“Many consumers regard liquid products as more fresh than dry seasoning mixes,” Kurzius said. “We’ve introduced skillet sauces, slow cooker sauces, and most recently baking sauces in liquid pouch format. We’ve expanded our popular GrillMates to wet marinades and burger mix-ins. In the US, store turns of our single-use marinades are exceeding our forecast by 30 percent.”
In the second half of the year, McCormick plans to launch a line of flavored black pepper seasonings, featuring such varieties as Worcestershire and sriracha; organic recipe mixes, food colors with no artificial dyes, and bone broth.
“Bone broth is a simple way to add flavor and protein to your diet,” Kurzius said. “Our Kitchen Basics bone broth has 10 grams of protein per serving and is certified heart healthy by the American Heart Association.”
McCormick also is driving sales through acquisitions and joint ventures, having completed seven in the past five years with plans for more in the near future. Most recently, the company acquired Gourmet Garden, an Australian manufacturer of chilled packaged herbs with annual sales of more than $50 million.
“As we look ahead, we have a robust pipeline of acquisition opportunities,” Kurzius said. “This pipeline includes businesses where flavor and health intersect to extend our current footprint with healthy flavors and great brands, industrial businesses that extend our capabilities and footprint and that are margin-accretive, some larger businesses in addition to bolt-on opportunities, and acquisitions that create scale where we currently have a presence in both developing and emerging markets. Regardless of the opportunity we’re pursuing, we're financially disciplined.”