The company said it would target online distribution, innovation and acquisitions to meet its objective. “Nine percent of our 2016 sales were from new products launched in the past three years,” President and CEO Lawrence E. Kurzius said at the annual investors' day.
Upcoming areas for innovation include a new clean label breakfast platform for flavoring oatmeal, yogurt, eggs, pancakes and smoothies.
McCormick has a savvy growth strategy centered on tracking emerging consumer trends and either altering existing products or launching new ones in response.
The company is moving toward greater use of fresh, natural and organic ingredients. Nearly three-quarters (73%) of its gourmet units are now organic, and it has converted some of its artificial ingredients to all-natural food extracts and food colors. This seems like a sensible bet, as U.S. sales of organic foods are worth more than $43 billion a year, and growth continues to outstrip general food market growth, according to Organic Trade Association figures.
The company’s acquisition targets are also on-trend, including the recent purchase of Australian fresh and chilled herbs firm Gourmet Garden.
McCormick has said it intends to capitalize on millennials’ interest in ethnic flavors and home cooking, and has a range of spice blends with brands including Thai Kitchen, Zatarain’s, Simply Asia and Lawry’s. Home cooking and use of spices to reduce salt and sugar have led to a strong uptick in direct-to-consumer sales of spices. Supermarket spice sales were up 5.2% last year, according to the latest Grocery Headquarters State of the Industry Almanac.
Apart from altering and rebranding existing lines, the company has also carried out internal research to track changing habits. Its Good Morning range of breakfast toppers and seasonings, slow cooker breakfasts and smoothie boosts is due for launch later this year, and taps into strong growth in the breakfast market. Total breakfast occasions are set to grow by 5% through to 2019, according to research from The NPD Group, and most breakfasts (70%) continue to be eaten at home.