McCormick Spices

Dr. Andrew Bergstein

Marketing 303

McCormick:Have they lost touch• Like many corporations McCormick has a

website that they hope will inspire people to use their products– unfortunately the web site is not up on the times– it offers recipes that just are not made anymore

• Cherry Cobbler

• In the past their motto has been “Make the best and Someone will buy it”

• Unfortunately they don’t know who someone is

McCormick Spices

• The company still has 40% market share

• Burns Philp and Company decided to challenge McCormick for market share, this has become know as “The WAR”

• McCormicks top priority was winning the War

• McCormick was able to win due to financial problems that plagued Burns Philp

McCormick’s new Philosophy

• Have addressed the face that more women are working and people are not spending as much time cooking

• Home chefs no longer prefer traditional spices like nutmeg, turmeric, they now look for spicier spices

• People are cooking less and less from scratch

McCormick’s new Philosophy

• Trying to promote seasoning mixes for roasts and other cuts of meat

• Advertising has grown from 3 million five years ago to 25 million this year

• Gotten more focused and sold some of their assets that are under performing such as their Garlic Company in CA

McCormick’s new Philosophy

• Repurchased 7.5 million shares over the past year and are expecting to acquire and additional 2.5 million by year end 1998

• New focus is to make sue net operating profit is well above cost of capital

• Net income last year 98.4 million

• The competitions Burns Philps lost 166.8 million

McCormick’s new Philosophy

• McCormick is betting on the growth of industrial sales

• Hoping about 40% of business will come from this type of sale

• With the trouble facing Burns and Philps, McCormick has been able to reduce feed paid to grocery stores for shelf space from 200 million to 120 million

Growth Opportunities

• Looking for growth outside the United States

• Possibly China?