A Passion for Flavor: For 131 years, this company has been inspiring healthy and tasty food choices on every dining table! [Monday Marketing Marvels]
Ground cinnamon.
Garlic powder.
Ground oregano leaves.
Parsley flakes.
Onion powder.
Ground mustard.
Rosemary leaves.
Do these seasonings ring a bell?
If you love to cook flavorful dishes at home, chances are you would have already encountered this particular brand.
McCormick & Co., Inc. is an American food company that manufactures and distributes various spices, seasoning mixes, condiments, and other food flavoring products to the market.
The company had its humble beginnings in a cellar in Baltimore in 1889, when its founder Willoughby M. McCormick and three other young workers were just selling their flavors and extracts door to door.
In 1987, McCormick & Co., Inc. achieved one of its biggest milestones when it reached USD 1 billion in its product sales.
Now, the company operates in and has joint ventures in 27 countries. It is considered a household brand in over 150 countries thanks to its powerful brand recognition.
McCormick continues to expand its business by acquiring other brands such as Lawry’s, Simply Asia, Thai Kitchen, and Zatarain’s.
In 2017, McCormick purchased the food assets of the UK-based Reckitt Benckiser Group for USD 4.2 billion and took over some of the latter’s famous supermarket staples such as French’s mustard sauce, Cattlemen’s barbecue sauce, and Frank’s RedHot sauce.
On a global quest for healthy flavor
McCormick operates with a purpose…
“To Stand Together for the Future of Flavor.”
Its vision?
“A World United by Flavor―where healthy, sustainable, and delicious go hand in hand.”
The company still continues to expand its portfolio―introducing new flavors and acquiring other brands―to cater to the evolving tastes and needs of consumers around the world.
Aside from saving the world from bland food, McCormick places importance on the health of every consumer worldwide. It has been fully committed to organic and all-natural products.
The company has also highlighted these five principles that play an integral part in its operations:
- Passion for flavor. Flavor is at the heart of everything McCormick does.
- Power of people. McCormick inspires a high-performance culture among its estimated 11,700 employees.
- Taste you trust. The company ensures high-quality products and ingredients from its sources to every family’s dining table.
- Driven to innovate. McCormick continues its pursuit of what’s next in flavor.
- Purpose-led performance. The company’s success lies in doing the right thing and its responsibility to care for the people, community, and planet.
According to Lawrence E. Kurzius, CEO of McCormick., the company is positioned to capitalize on both the traditional trends and newer consumer values.
In order to address the ever changing foodie’s quest for socially conscious, healthy, delicious, and accessible food options, McCormick turned its attention to a millennial-focused growth strategy.
In 2017, one-third of McCormick’s website traffic was driven by millennials. One study showed that 80% of this generation considered McCormick brands as one of the best food options available, if not the best one.
Brendan Foley, McCormick & Co., Inc.’s Global Consumer Business President, also reported that 64% of these millennials love to cook and 32% of them prepare ethnic dishes for dinner.
How was McCormick able to market its products to these consumers?
By tapping on everything that millennials love:
Technology, cultural variety, and going clean and green!
Since consumers want healthier food alternatives without losing all the flavors, McCormick made sure that its product renovation will only include all-natural food extracts and all-natural food color.
The company also launched its BPA-free packaging for its products and others were labelled “gluten-free”, “organic”, and “non-GMO” to emphasize to millennial consumers that “pure tastes better.”
McCormick’s patented technology (which it acquired when it purchased Gourmet Garden, a manufacturer of chilled packaged herbs) enables its products to stay fresh for longer periods of time without artificial preservatives.
To further appeal to the millennials’ taste demands, McCormick & Co., Inc. launched a clean label breakfast platform that highlighted 18 of their products that can be used to flavor pancakes, smoothies, oatmeal, yogurt, and eggs.
That was not all that was up the company’s sleeve!
In 2019, McCormick teamed up with Tasty, a BuzzFeed property, to launch a co-branded line of spice blends that millennial foodies would surely love!
The goal of the partnership is to extend the reach of McCormick’s Club House brand through Tasty’s channel and at the same time, enhance Tasty’s reputation as a diversified culinary company.
The product line includes the Fiery, Zesty, Savory, Jazzy, and Hearty spice blends (an obvious Tasty trademark to get the attention of its audience) as well as suggested recipes to try for each blend.
Also as part of the partnership, McCormick’s Club House spices are to be the official spice used by Tasty across all its content on Facebook, YouTube, Instagram, BuzzFeed newsletters, gift guides, and other social media promotions.
In the past five years, McCormick & Co., Inc. has recorded a revenue of:
- USD 4.30 billion in 2015
- USD 4.41 billion in 2016
- USD 4.73 billion in 2017
- USD 5.30 billion in 2018
- USD 5.35 billion in 2019
Clearly, McCormick & Co., Inc.’s strategies enabled the company to thrive and expand amidst the changing consumer taste preferences.
McCormick & Co., Inc.’s Earning Power: Valens Research vs. As-reported numbers
McCormick & Co., Inc. (MKC) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has McCormick & Co., Inc. been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent McCormick & Co., Inc.’s earning power (Uniform Return On Assets). MKC has shown robust profitability, with Uniform ROA expanded from 19% in 2004 to significantly climbing to a peak of 40% in 2019, as the company’s asset utilization improves.
The global ROA average is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, McCormick & Co., Inc.’s profitability is massively understated, recording only 6% as reported ROA (return on assets, a measure of earning power) for 2019, which is significantly lesser than 40% Uniform ROA.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that it has been doing well and making a profit.
Throughout the years, McCormick & Co., Inc. has been using flavor as a way to bring people together, around the dining table and around the world.
With the help of food and flavor experts, the company continues its research on nutrition as well as the connection between emotions and flavor.
Couple that research with knowledge on the global food market, McCormick & Co., Inc. will definitely rise up to define the future of flavor by creating new flavor lines that meet consumer preferences.
What a great way for McCormick & Co., Inc. to take on the world by “innovating products to make good food taste great while contributing to happier, healthier lives.”
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com
