Innovation central to McCormick's growth strategy

by Keith Nunes
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McCormick Good Morning breakfast products
McCormick plans to introduce a new breakfast platform.

SPARKS, MD. — By the end of fiscal 2019, the flavor company McCormick & Co. expects to achieve $5 billion in sales. 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, according to management representatives who spoke during the company’s annual investor’s day that was held April 4.

Lawrence Kurzius, McCormick
Lawrence E. Kurzius, chairman, president and c.e.o. of McCormick

“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. “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.”

During fiscal 2016, ended Nov. 30, McCormick & Co. recorded net income of $472.3 million, equal to $3.69 per share on the common stock, and an improvement when compared with fiscal 2015 when net income totaled $449.5 million, or $3.11 per share.

McCormick natural food color, natural extracts
McCormick's latest renovations include all-natural extracts converted from imitation and all-natural food color.

Sales for the year totaled $4,411.5 million, an increase from fiscal 2015 when the company generated $4,296.3 million in sales.

“We are particularly proud of our sales growth,” Mr. Kurzius aid. “Nine per cent of our 2016 sales were from new products launched in the past three years.

“We expect another strong year in 2017 and last week reaffirmed our constant-currency goals for growth sales 5% to 7% and earnings per share of 9% to 11%. This guidance is at or above our long-term outlook. We’re bullish on our plans for brand marketing, innovation across both of our consumer and industrial segments and opportunities to expand distribution. And we’re confident in our ability to deliver the projected cost savings.”

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