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.
"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."