Q&A with Bob Lawless
What are your most significant
opportunities to grow sales?
On average, we expect to grow sales 5% annually, within a
3-7% range. We do this through innovation, acquisitions and
extending our geographic reach. New products will continue
to be a vital part of our sales growth. In recent years, at least
10% of annual sales came from new products launched in the
prior three years. We continue to pursue acquisitions as an
important avenue of growth. Geographically, we are excited
about opportunities to further expand our branded products in
China and to countries in Europe where we do not yet have a
In summary, sales growth
will vary year to year based on
acquisition activity, foreign
currency exchange rates and
other factors. However, over time
we expect annual sales growth
from the following sources: 2-3%
from the base business, 1-2%
from new products, 1-2% from
acquisitions, 0-1% from distribution
expansion and 0-1% from
How does concern about health and wellness impact your business?
Consumers are invited to visit www.mccormick.com where
they will find healthy recipe and meal ideas in our new "Taste
for Health" section. As a supplier of a broad range of flavors,
McCormick can add taste to a variety of diets. For consumers
on a low-carb diet who are eating more meat, poultry and
seafood, we provide coatings, marinades and grilling seasonings.
If one's interest is in whole grains, we offer products that flavor bread, cereal and wholesome snack foods. All too often, diets
that call for low-fat, low-salt or low-calorie are often low in flavor.
And that's where McCormick steps in - to add great taste.
I've read that Americans are eating out more. Are they cooking less?
In October 2004, USA Today reported that 77% of meals are
made at home based on research conducted by NPD. And the
Food Marketing Institute has indicated that 84% of consumers
ate a home-cooked meal at least three times a week compared
to 74% in 2001. At the same time, Americans would like preparation
time to be less than thirty minutes according to Parade
Magazine's "What America Eats" issue. McCormick makes cooking quick and easy with
products like GrillMates, seafood sauces, and new
seasoning mixes that offer both convenience and
great flavor. We're delivering flavor in new ways too,
with grinders, salad products and dessert toppings
that add taste at the table.
For many of those occasions when people
prefer to eat out, grab a snack or heat up a prepared
meal, McCormick continues to deliver the flavor!
Through our industrial business, we add taste to
the products offered in leading restaurants, food
service distributors and food processors. In fact,
whether you are at home or eating out you can
enjoy something flavored by McCormick.
Costs for many basic food ingredients such as
soy oil and dairy products can fluctuate year to year.
How does this affect your business?
We strive to maintain stability in costs and pricing. In our industrial
business, many customers accept price adjustments that
pass through commodity cost changes. In our consumer business,
increases and decreases in the costs of spices, herbs and other ingredients tend to offset one
another during any particular year. In
certain situations we increase prices to
offset rapidly escalating costs. An example
occurred in 2003 when vanilla bean
costs rose steeply due to a crop shortage,
and we responded by increasing prices. We went even one step
further. With our global sourcing capabilities, we were able to
secure a strategic inventory of vanilla beans to guarantee a
supply of vanilla extract for our customers.