Weak economy is to McCormick's taste

Hunt Valley spice maker sees profits rise as more consumers do their eating at home

  • Gordon Stetz, McCormick & Co.'s chief financial officer, addresses shareholders at the company's annual meeting. In addition to rising profits, shareholders were treated to the company's traditional gift bags of spices.
Gordon Stetz, McCormick & Co.'s chief financial… (Jed Kirschbaum, Baltimore…)
April 01, 2010|By Andrea K. Walker | andrea.walker@baltsun.com

McCormick & Co.'s product line has long included staple spices such as cinnamon and nutmeg that have been around for centuries, but it might be the new blends - and different takes on the old ones - that are helping drive growth during this recession.

As consumers pinch pennies by cooking at home more, many still want the same kinds of meals they can get in a restaurant; they also are health-conscious. That means foods seasoned beyond the basic salt and pepper.

"We are bringing innovative new products to consumers that respond to certain realities driving purchasing decisions," Alan Wilson, McCormick's chairman and chief executive, said at the company's annual meeting Wednesday.

In the past year, the company has introduced lower-sodium versions of seasonings and created new marinades. This year, the company will market a new line of herb and spice blends called Perfect Pinch, Wilson told the crowd of about 900 shareholders and employees at the annual meeting in Hunt Valley. Perfect Pinch varieties include a Mediterranean blend and a Parmesan-herb seasoning.

The company also has begun selling Recipe Inspirations, a cooking kit that comes with a recipe, pre-measured spice packets and a shopping list. Recipes include Apple & Sage Pork Chops and Garlic Lime Chicken Fajitas.

McCormick had profits of $300 million in fiscal year 2009 and sales of $3.2 billion, despite the weak economy. Along with innovation of new products, earnings were helped by cost-cutting, people eating at home and sales of the company's Lawry's seasonings. McCormick bought Lawry's in 2008 and has since revamped the brand. It also increased overall advertising and promotion, including giving out more coupons.

The company reduced costs by $42 million last year and expects to cut expenses by another $35 million to $40 million in 2010.

"In a very difficult environment, we grew our business," Wilson said.

Gordon Stetz, McCormick's chief financial officer, said the industrial side of the business, which serves restaurants and other food services, has remained challenging. High-end restaurants are spending less. And many of the companies are sticking to staple spices.

Shareholders said after the meeting that they were pleased with how the company has been managed; they voted to re-elect the company's board of directors during Wednesday's meeting.

Unlike many other corporate shareholder meetings, which attract few people and are more like board meetings, McCormick's annual meeting attracts a crowd that fills a hotel ballroom. Many come because the company gives out gift bags of spices. This year's bag included low-sodium taco seasoning mix, Zatarain's black creole seasoning and a mojito lime Grill Mates seasoning.

Vicky Dears, a 63-year-old shareholder who lives in Dundalk, said the company was doing a "great job" and that she especially likes its introduction of more healthful spice options.

"I like the new low-sodium versions," Dears said. "That kind of thing is important for somebody my age."

Warren and Jeanne Hiss, 85 and 81, respectively, drove from their home in Havre de Grace to attend the meeting. Shareholders for 20 years, the couple said they find the meetings fun and feel the company is protecting their investment. Warren Hiss said the gift bag is an extra incentive.

The company also announced Wednesday it will issue a quarterly dividend of 26 cents per common share, payable on April 26 to shareholders of record as of April 12. It is the 86th year of consecutive dividend payments by McCormick.

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