Speaking at McCormick’s 2012 Global Growth Investor Conference last week, Ken Stickevers, president US consumer products, said: “We have formed a strategic partnership with MyWebGrocer, a company that provides the web-based backbone infrastructure to approximately half of the retailers in the United States.
“We partner with customers through our relationship with MyWebGrocer to provide guidance on how consumers can flavor their meals. It’s a total meal solution for the consumer and a win win for our retail partners.”
But he added: “In addition we are working with MyWebGrocer to deliver a new ‘flavor print’ service that would deliver recipes based on knowledge of consumers’ behavior and purchase history.
“We believe this is a breakthrough application of technology that would allow us to provide a service similar to Amazon’s recommendation engine for recipes and McCormick flavor products. There will be more to come on this in the back half of this year.”
Percentage of overall marketing budget allocated to digital media has tripled in two years
The move was part of the firm’s bid to increase engagement with consumers online, said Stickevers, who revealed that 12% of McCormick’s marketing budget would be spent on digital marketing in 2012 compared with just 4% in 2010.
“We are aggressively shifting our marketing mix to non-traditional vehicles, which includes interactive, shopper marketing and public relations – all powerfully effective tools to drive consumer engagement.
“In the US, we are also placing more focus on consumer insights by conducting research with them early in the innovation process. This includes in home meetings and focus groups.”
Half of steak and chicken served in US homes is flavored with salt and pepper or nothing at all
The tie up with MyWebGrocer also reflects the fact that McCormick still sees strong growth potential in mature markets such as the US, where half of the steak and chicken prepared at home is still flavored with “just salt and pepper or nothing at all”, said chief executive Alan Wilson.
Meanwhile, more targeted products are raising McCormick’s profile with Hispanic shoppers, who are being wooed with aggressive marketing activity, new TV advertising and a bi-lingual website.
“Our US sales of Hispanic products exceeded $100m in 2011 and we expect our sales to this important consumer demographic to continue to grow in future”, he said.
A strong pipeline of innovation
While a lot of focus had been put on developing new consumer products, McCormick also had a ”strong pipeline of innovation” in its industrial business – which sells seasonings and spices to food manufacturers and foodservice companies, said Wilson.
Speaking at the same event, chief science officer Hamed Faridi, Ph.D, said R&D spending was up 30% from five years ago, with “17 clinical studies completed or underway”.
Emerging markets on fire
The strongest growth, however, is coming from emerging markets, said Wilson, with sales from these regions set to account for 20% of McCormick’s sales in 2015 compared with 10% in 2011.
Several factors are driving sales including a growing middle class, increased consumption of protein, more interest in brands and a growing demand for the safety and convenience of spices and seasonings as a packaged food rather than a bulk ingredient, he said.
Click here to see McCormick’s 2012 Global flavor forecast.
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