PARIS — McCormick & Co., Inc. has taken several steps in recent years to give its customers — and consumers — what they want, from introducing new flavors to renovating the packaging of its spices portfolio.
“Our role is just to really optimize the performance of that category for the retailer, but also spend a lot of time making sure … we keep improving it for the consumer overall,” Brendan M. Foley, president and chief operating officer of Hunt Valley, Md.-based McCormick told analysts during a June 7 presentation at the Deutsche Banke dbAccess Global Consumer Conference in Paris.
Mr. Foley said McCormick adopted a category management mindset right before the pandemic and has carried it through over the past few years. He pointed to the company’s renovation of its entire everyday line of spices into new packaging as an example of McCormick’s leadership in the category. The changes in packaging, he said, have addressed consumers’ No. 1 desire, which is to have fresh herbs and spices every time they open a jar.
“So we built in a really interesting technology by nitrogen flushing it before we pack it so that the first time you open it, then it's as fresh as it can be,” he said. “But then there's a great cap on it that just really kind of snaps and seals it even better than the current one. And that just preserves a lot of freshness.”
He also said McCormick has redesigned its jars so the name of the spice and the “Best Buy” date are on the cap.
“These are renovation approaches that I think … carry the category forward,” Mr. Foley said. “This is going to be backed up now by probably … the highest level of brand marketing spend that we'll have against McCormick. And we haven't even hit that yet, it will probably start in the third quarter where we’ll spend even more behind this renovation. So it will be pretty exciting when we do that.”
In terms of innovation, 2023 marks “a big turnaround” for McCormick compared with the previous few years, Mr. Foley said. The pandemic limited the ability to innovate but in 2023 the company expects to have six times the new product launches in spices and seasonings that it did in 2022. Mr. Foley said McCormick also is putting more attention toward innovation around value.
“We talked about this Lawry’s opening price point,” he said. “As price pockets expanded, this created a role for this brand and kind of come in just above private label. And that allowed us to really start to see some interesting growth where we have that in distribution, and it's continuing to build this year.
“About 53% of the people who are buying that brand are new to McCormick. It’s also driving category growth with our retailers, and it’s trading people up from private label into the brand because they're still looking for high quality and so they know they'll get that with the Lawry's brand.”
Mr. Foley also said larger sizes are having a real impact on the spices and seasonings category.
“It's really showing up where consumers are trying to go for quality, but they also want greater value,” he explained. “We have this range called the Super Deal in the US. And that business is up 20% every year since the pandemic started.
“But what’s interesting about that is you get three times more product in that bottle, but the purchase rate or the purchase cycle is just as long as it was in our smaller sizes. So what that means is that people are just simply consuming and using more spices. So when it’s in our pantry, they’re using up through just as quickly as they did a smaller size. And we’re seeing just frankly, our volume metrics are even stronger than our unit metrics.“So it just shows that people are really starting to trade up in size, but they're looking for value there, too.”