McCormick provides update on growth strategies
McCormick & Company, Incorporated, a global leader in flavor, presented to the Consumer Analyst…McCormick & Company, Incorporated, a global leader in flavor, presented to the Consumer Analyst Group of New York (CAGNY) at that group's annual conference. McCormick executives provided an update on the company's growth strategies and discussed its long-term financial objectives.
The company described an advantaged position in the food industry, supplying flavors at every price point and reaching consumers at all types of eating occasions, both at home or eating out. Increased consumer demand for flavor is being driven in part by younger consumers who have a greater interest in cooking and discovering new flavors, as well as mature adults who are using spices and herbs as a replacement for sugar, salt and fat. McCormick is expanding its geographic presence in emerging markets where rising incomes have consumers purchasing branded packaged spices and seasonings rather than as a bulk ingredient. McCormick is investing in brand marketing, innovation and acquisitions to grow sales. Productivity improvements through its Comprehensive Continuous Improvement program (CCI) are the fuel for this growth and expected to yield annual cost savings of at least $45 million.
Alan D. Wilson, Chairman, President and CEO, commented, "Clearly, demand for flavor is growing all around the world. As a global leader in flavor, this is a great opportunity for McCormick and our strategic imperatives have us well-positioned for success. These begin with our people, 10,000 McCormick employees around the world who are fully engaged. The second imperative is growth, with our objective to win share with a global focus for both our consumer and industrial businesses. Our third imperative is performance. Since 2008, when the current leadership team came together, we have increased sales at a 5% compound annual growth rate and delivered a total shareholder return ahead of the food industry and broader stock market."
Long-term, McCormick's objective remains annual growth of 4-6% in sales, 7-9% operating income and 9-11% earnings per share. In addition, the company expects to continue to generate strong cash flow and to return a significant portion of that cash to its shareholders. During the presentation, the financial expectations for fiscal year 2014 were reaffirmed, as previously provided by the company on January 29, 2014.