Local Brand Spotlight: How Did the McCormick Spice Company Take Over the World?
The McCormick Spice Company has been a Baltimore namesake for 126 years. Most Baltimoreans are very familiar with the brand Old Bay®; it goes hand-in-hand with our world-famous Chesapeake Bay blue crabs.
But did you know that McCormick is a worldwide power in spices, with many other “niche” brands created specifically for different country’s tastes?
I was shocked, to be perfectly honest. As a Maryland native, I’m used to seeing the McCormick name prominently displayed in local grocery stores. It only makes sense, considering how long the company has been based in Baltimore. But I was unaware it owned some popular brand names besides Old Bay® (which it purchased in 1990 from Hansen Industries). McCormick also owns the brands Lawry’s®, Simply Asia, Thai Kitchen, and Zatarain’s.
To learn that McCormick dominates the world’s spice market with a 22% share took me by surprise.
You can purchase McCormick brands in over 110 countries.
Have you heard of these household names- Ducros (France), Kamis (Poland), Margao (Portugal) and Schwartz (UK)? McCormick is also a brand name in China, Australia, and parts of Asia.
I went to McCormick’s website to research the company’s existing brands and slogans.
Saving your world from boring food…
Saving your world from boring food greets you on the home page. “We’re on a global (and enjoyable) quest for flavor” was another featured slogan. This is certainly not a local company looking to expand- this is a global juggernaut enforcing its dominance in the world’s market.
From its humble beginnings in 1889- “founder Willoughby M. McCormick and three young workers start the company in a cellar and sell their flavors and extracts door to door”-to one of its biggest milestones in 1987- “we hit $1 billion in sales”- McCormick has grown exponentially by building its brands and creating powerful brand recognition.
McCormick’s timeline cites The Great Baltimore Fire of 1904 as the reason it placed such importance on its own brands- the fire destroyed all material assets and records. “The rebuilt House of McCormick on Concord Street is up and running within 10 months. The experience gives Willoughby a new appreciation for creating his own brands.”
So how does McCormick advertise? Why is it that they are a household name worldwide?
All over the world, people know our brands at first sight. And taste.
It’s true; they literally are everywhere. From your backyard barbeque, to your favorite restaurant and even your everyday meals, McCormick has made a home.
McCormick plays off the fact that eating is universal; everyone needs to eat to survive, and everyone enjoys a tasty meal. Different cultures and locations enjoy different foods with different tastes, and McCormick became the go-to flavor for the world’s diverse palette.
“We’re continuing to grow through thoughtful innovation, brand marketing, and key acquisitions in both emerging and developed markets. We keep pushing to raise the art, science, and passion of flavor to a higher level-and improving the universal experience of eating.”
An article in Adage questioned why, at this point, McCormick even feels the need to advertise, considering they own the global market by a large margin. In 2008, McCormick started marketing health over flavor, pushing the fact that many of their spices were high in antioxidants and good for the body.
The article goes on to state that McCormick’s goal was to reach an audience that did less cooking but wanted to eat healthier. One ad urged consumers to “add antioxidants to your morning scramble” by sprinkling pepper on scrambled eggs, while another said to “invite antioxidants to dinner,” by adding oregano to grilled cheese.
It goes on to say that, “the health-focused marketing…is backed by a growing ad budget. McCormick’s measured-media spending jumped to nearly $70 million in 2010 from $49 million in 2009, according to Kantar Media.”
Earlier this year, Morningstar (an investment research and management firm) analyzed the company from an investment standpoint. Erin Lash, Senior Equity Analyst, writes that McCormick isn’t resting on past success.
“Management’s goal is for 10-12% of sales to result from new products by 2015, up from 8-10% over the past five years. But the firm doesn’t let these products speak for themselves-marketing spending is up more than 50% over the past five years, which is a plus since even valuable new products can fail if consumers don’t know about them.”
McCormick can afford to push these new products given its instantly recognizable brand name and dominance in the market with established brands. I think the important thing to note here is that McCormick isn’t satisfied to rely on its big brand name items; it’s constantly growing and evolving, introducing new brands and flavors to consumers. McCormick clearly states on its website how it intends to grow as a company:
- GROWING OUR BASE BUSINESS: We put the same intensity into our marketing as we do in creating and innovating our products. Our marketing investment approached $200 million in 2012 and encompassed everything from in-store marketing to multi-platform mobile recipe and meal prep apps. We communicate the value of our brands by inspiring and connecting with consumers wherever they discover, create, consume, and share flavor.
- DRIVING INNOVATIVE PRODUCTS: New products launched in the past three years accounted for 8% of sales in 2012, and we expect to grow that to at least 10% by 2015. In our consumer business, McCormick launched more than 250 new products in 2012 and we now have 400 research and development professionals around the world. Our global strategy councils have targeted local product successes with universal appeal, plus we’re devising innovative ways to drive regional sales. We have created new products for our industrial customers, who are turning to us more and more to help them incorporate natural ingredients and other healthy attributes into their products.
- ACQUIRING LEADING BRANDS: In both developed and emerging markets, we are financially disciplined when assessing value, and diligent in planning how we integrate new brands into our existing business and making sure they complement our products and grow our sales. By 2015 we expect emerging market sales to grow to 20% of our portfolio.
As an example, one of McCormick’s latest brands-McCormick Gourmet- is cashing in on the recent ‘spicy sriracha’ craze with two bold new flavors: Sriracha Seasoning and Jalapeno Ground Pepper (available at your local grocery store or through Amazon.com).
How recognizable is your brand? Keep in mind that you can’t simply develop a successful logo or company; it is success that makes your brand recognizable to the masses. Aside from a great product, you need great marketing to make your brand stand out amongst the rest.
Let us help you put your brand on top. Call us today for a brainstorming session.