McCormick's CEO vows to fight off competition

March 16, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

Years without a strong competitor in the spice business allowed McCormick & Co. Inc. to grow a bit complacent while resting on its famous brand name, company executives said yesterday.

But no more, the managers vowed to a standing-room-only crowd at the annual shareholders' meeting yesterday.

Sounding at times like football coaches at halftime, McCormick executives predicted victory in a recently erupted spice war against Burns, Philp & Co. Ltd., an Australian company that has bought up competitors and started a bidding war for supermarket shelf space.

"There are competitors who want to take away our customers and replace us as the market leader. But it won't happen. We will win," insisted H. Eugene Blattman, McCormick's chief executive officer.

The new competition with Burns, Philp has forced the company to lay off workers to reduce costs, start advertising again and develop whole new types of foods to win over new customers, he said.

The company's job cuts, announced in October, are slowly continuing, he said. About 275 people accepted early retirement offers last month. And the company is still negotiating to sell one plant marked for closure, he said.

Mr. Blattman said he hopes to reduce the number of middle management layers at McCormick.

"We've got about 10 levels from me to the person on the plant floor. . . . We need to take that to maybe five," he said.

Although he wouldn't say what kinds of new foods McCormick will sell, he said the company will soon start test marketing products that won't be sold in the supermarket spice aisle.

Company Chairman Charles P. "Buzz" McCormick said the new competition has forced the company to become more aggressive.

"We've known all along that McCormick is a powerful brand name, and we probably haven't used its power to the fullest," Mr. McCormick said.

The first sign of the new aggressiveness will be radio ads that will soon start airing in nearly every U.S. city. The company has committed to a three-year radio campaign and is considering a television campaign, he said.

Jim Harrison, a retiree and shareholder, praised the company but asked why company managers weren't selling McCormick's popular overseas products in the United States or inventing new ones: "What if McCormick introduced vitamins with their spices?" he suggested.

Frank Smor, who has 850 shares, said he is a fan of the company but worried about the large debt load the company took on to buy up competitors last year.

He said he feared that McCormick may be overreacting to its new competition. McCormick spent $82 million on seven acquisitions last year.

Chief Financial Officer Robert Davey said the company plans to pay off more than one-third of its debt by the end of 1996.

The biggest applause yesterday came when one shareholder asked the company to put a spice-scent blowing machine at the Inner Harbor to remind everyone of the days when the downtown Baltimore headquarters perfumed the city's air.

Mr. McCormick laughed and said the suggestion reminded him of a visit from an official who suggested McCormick install a machine at Oriole Park at Camden Yards that would pump out "a big poof of cinnamon" every time an Oriole hit a home run.

"It was a great idea. But it turned out not to be too practical," he said.

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