Milling & Baking News Corporate Profiles - 2017 - 106

Company Overview

McCormick & Co.
Charting a course to $5 billion of sales through innovation, acquisition

y the end of fiscal 2019, Sparks, Md.based McCormick & Co. expects to
achieve $5 billion in annual sales, which
compared to close to $4.5 billion in 2016. The
new business will come from three primary areas: new forms of distribution such as e-commerce; innovation, including the company's new
breakfast platform; and from acquisitions.
"Across the food industry, companies are
operating in a period of rapid and fundamental
change," said Lawrence E. Kurzius, chairman,
president and chief executive officer of McCormick & Co., during the company's investor day
in April. "Most food companies built businesses
to address a traditional set of consumer values,
factors that consumers weighed in their choice
of food, namely taste, price and convenience.
"Today, taste remains No. 1. ... But the number of consumers who are considering an evolving series of emerging drivers has grown substantially. Roughly half of consumers say their
purchase decisions are significantly influenced
by these emerging drivers. At McCormick, we
are positioned to capitalize on both the traditional trends and the newer consumer values."
Looking ahead, the company is bullish on plans
for brand marketing, innovation and opportunities to expand distribution, Mr. Kurzius said.
A major initiative under way at the company

Chief executive officer -
Lawrence E. Kurzius

106 \ October 2017

involves renovating its core products with an eye
toward anticipating consumer demands and being transparent.
McCormick & Co.'s management team has
identified three innovation platforms it plans to
grow. One platform focuses on the breakfast occasion, with a range of product lines, including
breakfast toppers, breakfast seasonings, slowcooker breakfast and smoothie boosts.
McCormick's second innovation platform
will focus on freshness. The fresh platform will
utilize technologies that came to McCormick
from its acquisition of Gourmet Garden, a company based in Australia that produces and sells
chilled packaged herbs.
In the company's third innovation platform,
the company plans to capitalize on how consumers use spices and herbs to reduce the amount
of sodium and sugar in their diet.
Acquisitions are another key part of McCormick's strategy. In August, the company
acquired the food business of the Reckitt Benckiser Group, Parsippany, N.J. The $4.2 billion deal
includes the Frank's RedHot hot sauce, French's
mustard and Cattlemen's barbecue sauce brands.
"The acquisition of RB Foods strengthens McCormick's flavor leadership with the addition of the
iconic French's and Frank's RedHot brands to our
portfolio, which will become our No. 2 and No. 3
brands, respectively," Mr. Kurzius said. "RB Foods'
focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as we continue to capitalize on the growing
consumer interest in healthy, flavorful eating."
The hot sauce category will continue to see robust growth, according to McCormick, and there
are significant opportunities for expansion. McCormick said it expects growing global millennial
household penetration to create substantial upside
for Frank's RedHot and the other acquired brands,
increasing their respective consumer bases. The
company also sees an opportunity to grow the
presence of French's mustard at food service.
With the increased scale, McCormick expects
to achieve cost synergies of approximately $50
million, the majority of which will be achieved
by 2020. CP

McCormick & Co.
net income
in millions

2016

$472.3

$401.6

2015

$437.9

2014

McCormick & Co.
net sales
in millions

$4,411.5

2016

2015

2014

$4,296.3

$4,243.2

McCormick & Co.
share price

per share
$107

$100

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