McCormick’s Hispanic sales rocket as firm launches mission to ‘save the world from boring food’

Speaking at the Barclays Capital Back to School consumer conference in Boston last week, chief executive Alan Wilson said: “We’ve increased sales of authentic Hispanic products nearly 50% since 2005 and we expect to exceed $100m in sales​ [of these products] in 2011. ​

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“Sales are even higher when McCormick’s branded pepper, taco seasoning mixes and other items are included.”​

More targeted products were raising McCormick’s profile with Hispanic shoppers, but the firm has also invested in aggressive marketing activity, new TV advertising and a bi-lingual website, he said.

“Extending our product portfolio is just one part of our outreach to Hispanic consumers. These latest actions build upon nearly 20 years of focus on Hispanic consumers here in the US.” ​

‘Our mission is to save the world from boring food’​

As for the overall US market, while consumer confidence was low, the rise of eating in was good news for McCormick, which supplies retail and industrial customers, said Wilson.

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“Consumers might be economizing, but taste continues to drive what they purchase and prepare. This exploration of flavor has led to more spices and seasonings in their pantry and more creativity in recipes and menus.​

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“At McCormick, our mission is to save the world from boring food.”​

Products with a range of price points​

Showing slides revealing that US consumption of spices was growing almost three times as fast as population growth, Wilson said US consumers were “shopping in a number of different retail channels and carefully monitoring prices”. ​

To address this trend, McCormick had made distribution gains in dollar stores, warehouse clubs and in private label ranges at drug stores and major retailers, he said.

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“As consumers seek value we are offering products with a range of price points from opening price point to gourmet across multiple retail channels.”​

Meanwhile, more detailed analyses of trade spending activities had helped the firm identify what really worked and what didn’t, he said, citing a US holiday promotion in which a 30% off offer on seasoning products had generated a $46,000 profit while a 50% off deal had resulted in a $41,000 loss.

“We determined that a US holiday promotion offering 30% off spice and seasoning products had a much better return for us and for our customer than a 50% off.”​

Reduced sodium sales largely incremental ​

Several new products are in the pipeline this year including an expanded offering of reduced sodium items, he said.

“Results from other reduced sodium products indicate that 75% of sales are incremental to the category.” ​

Emerging market sales​

While China and India were “not immune​” to rising raw material costs, McCormick continued to grow strongly in emerging markets, which were predicted to account for 12% of sales in 2012 compared with 6% in 2006, he said.

“We are also seeing a rising middle class and our industrial customers are expanding rapidly in these markets.”​