Key development: Tightening focus on core spice and seasoning business.
What's next: Meeting consumers' desire for ease of buying and cooking with spices.
Consumers are experimenting with ethnic foods and looking for easy, healthful meal solutions. The time couldn't be better to be in the flavorings business, and McCormick & Co. has sharpened its corporate focus to take advantage of it.
The world's biggest spice and seasonings company has been serving up convenience and value-added items to tap into organic, grilling and ethnic-food trends. "If you go back 15 years ago, McCormick was known as a pepper company," Robert J. Lawless said. As the American palate has evolved, so, too, has McCormick, into a flavorings company that serves consumers through retail products and products for packaged goods and food-service clients.
Lawless is widely credited with this transformation. The 58-year-old Ontario native joined the Sparks, Md.-based company in 1977 as a distribution manager. He became president in 1996 and added the CEO and chairman titles in 1997 and 1999, respectively. A former high school jock, he's known for his competitive drive, outgoing personality and belief in teamwork.
"He's a person who reshaped the organization from a good company to what I believe is a great company," said Chris Watters, research analyst for Ariel Capital Management, Chicago, a McCormick shareholder.
Despite the eating-on-the-go phenomenon, Lawless believes food trends bode well for the company.
"Between 70 and 74% of people still cook a significant number of meals at home," he said. "With the economy the way it is today, interest rates rising + I think there's nervousness on the consumer side. The discretionary income they might have had to eat out, I think, is either being saved or gone."
Even so, strong sales of McCormick's higher-margin products indicate that consumers are willing to spend freely in the $1.7 billion spices and seasonings category. McCormick has the cost-conscious consumer covered, too, though, by making private-label products for supermarkets.
Ease of use remains the thrust of McCormick's new-product activity this year. Also to come are a simplified pricing structure and new merchandising unit with color-coded sections designed to simplify the shopping process.
McCormick also is on the hunt for more acquisitions like Zatarain's, the New Orleans-style food and seasonings company that it bought in 2003. "We think anything that offers a flavoring makes sense for us, whether liquid or dry," Lawless said. "We've streamlined the portfolio, and we're now just in the flavorings area. And that's all we're going to do."