Speaking on a conference call with analysts last week to discuss the firm’s third quarter results, McCormick chief executive Alan Wilson said: “We’re adapting to reach consumers where they're spending their time, which is increasingly on the Internet.
“In addition to our Facebook fans for brands like Grill Mates, Zatarain’s and Old Bay, we are excited about our presence on Instagram and Pinterest to support our gourmet consumers.”
Pinterest et al allow consumers to become engaged with brands in ‘more authentic and compelling ways’
He added: “Pinterest is now the third-largest social media site after Facebook and Twitter and provides an opportunity for consumers to become engaged with our brands in more authentic and compelling ways.
“We're working to connect with consumers at every stage of what we call the flavor of life cycle, from inspiration with a recipe idea to getting our product in the shopping list and helping with meal preparation and, finally, sharing success with family and friends.”
‘We are aggressively shifting our marketing mix to non-traditional vehicles’
Meanwhile, more resources are being allocated to digital marketing, which is expected to account for 12% of total brand marketing support in 2012 versus 4% in 2010, said Wilson.
At the Global Growth Investor Conference in April, Wilson also revealed colleagues are working on a ’flavor print’ service with MyWebGrocer that will replicate Amazon’s recommendation capabilities in the world of flavor, delivering personalized recipes to consumers using McCormick ingredients.
He added: “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.”
‘Our customers are focused on bigger, fewer new products’
Asked by an analyst about customers’ new product development plans, Wilson said food manufacturers are increasingly focusing R&D resources on fewer, bigger new products.
He added: “What we're seeing from a new product activity standpoint is that our customers are focused on bigger, fewer new products as opposed to a steady stream of the base hits.”
Meanwhile, volumes in the US are starting to recover as pricing moderates, he added, echoing comments from bosses at ConAgra and General Mills in recent weeks: “I think the general consensus that we're hearing is that people are seeing some recovery in volumes and some moderation of cost increases.”
Consumers were ‘living out of their pantries’
And consumers, he said, are feeling slightly more confident: “Commodity inflation is not as high as it was, and so we expect that we should see the ability for consumers to buy a little more and not have that sticker shock.
“I think what we saw early in the year was a little bit of the sticker shock, people living out of their pantries. And I think kind of the general impression is that things are improving a bit.”
Q3 2012 results breakdown
McCormick posted a 12.5% rise in operating income to $144m on sales up 6% to $977.7m in the third quarter of fiscal 2012 (three months to August 31).
In the consumer products business, sales rose 9% to $568.3m, while industrial sales of seasonings and spices to food manufacturers and foodservice companies rose 3% to $409.4m.