For about 30 minutes as shareholders streamed into the ballroom at Martin’s Valley Mansion in Cockeysville for McCormick & Co.’s annual shareholder meeting, a giant screen at the center of the room spelled out one word in multi-colored letters: “future.”
Lawrence Kurzius, the Hunt Valley spice maker’s chairman, president and CEO, looked loose and relaxed as he touted 2018 successes for a room filled with 1,000 shareholders that included a significant number of company retirees.
But Kurzius also left no doubt that McCormick was moving forward focused on its future.
“At McCormick, innovation is everyone’s responsibility and it’s what propels us forward,” he told shareholders. “Through unparalleled insights, global enablement and a forward focus equipped by technology, our company will be scalable, agile and relevant as we build the McCormick of the future together.”
Kurzius opened Wednesday’s meeting touting some of the firm’s 2018 successes. McCormick shares opened the day at $146.32, up 38 percent from its annual meeting last year.
In 2018 the company also opened its new global headquarters in Hunt Valley and crossed the $5 billion threshold in annual sales for the first time in its history.
“Ten billion dollars is a tall order, but we’ve got a lot of ambition in the company,” he said when asked when the company might hit the $10 billion in sales mark. “In terms of market cap, this past year we crossed the $20 billion market cap level. I’m confident that we are going to grow and be successful. A lot of that success will be right here in Baltimore.”
The company’s success came as it fully incorporated the acquisition of Reckitt Benckiser’s food unit, which included the French’s and Frank’s RedHot brands.
McCormick has used acquisitions as a strategy for growth over the past few years. Other acquisitions since 2015 have included Brand Aromatics, One World Foods, Drogheria & Alimentari, Giotti and Botanical Food Co.’s Gourmet Garden.
But it has not made any acquisitions since French’s and Frank’s in the summer of 2017 while it has paid down the debt from that $4.2 billion deal. But as that debt has decreased, Kurzius told analysts Tuesday, McCormick could look to start making acquisitions again soon.
The growth of the French’s and Frank’s brands internationally, where they did not have much of a presence before McCormick acquired them, is one element of the company’s future growth plan.
It also plans to grow through an increased focus on digital marketing and younger generations, especially millennials and Generation Z.
This quarter, McCormick is launching new seasoning blends co-branded with Tasty, Buzzfeed’s food brand popular with young adults on social media for its recipe videos.
The company is also focused on making food a more social experience, especially for Generation Z, which is just beginning to enter the workforce but is already a larger segment than the previous generation, millennials.
McCormick is adapting to their preferences for sustainable food that can be shared socially, Kurzius said.
“They are more experimental and health aware about food and seek authentic, global, bold and spice flavors,” he told shareholders. “Generation Z is reached on digital and social media with images their primary method of communication. We like to say their phones eat first, and so helping them create a fabulous dish that looks shareable in addition to tasting great is a growing focus for us.”
The company has grown its use of technology and other digital platforms.
Its new Flavor Maker app lets consumers find recipes and keep a digital spice rack. The firm has also expanded its e-commerce offerings and has a branded micro-store on Amazon.
Technology is also playing a role in how the company develops future products. Its first products developed using artificial intelligence as part of a partnership with IBM will be released this quarter.
McCormick has about a 20 percent global market share, a figure Kurzius touted Wednesday but one that also demonstrates the international financial headwinds it faces.
The CEO was asked by one shareholder how the company plans to deal with issues including tariffs, trade deals with other North American countries and China and the United Kingdom’s looming exit from the European Union, commonly referred to as Brexit.
Brexit in particular could cause some headaches for the firm. The U.K.’s exit was originally scheduled for Friday, but the country has still not approved a package for how trade will work with the rest of the world, and numerous options are on the table.
Firms with operations in both the U.K. and Europe could have to deal with World Trade Organization regulations under a no-deal Brexit, or just have to modify some current European regulations under a so-called “soft” Brexit.
“We’ve prepared for what we can prepare for,” Kurzius told reporters. “We’re hopeful that rationality prevails and some kind of deal prevails that allows a sensible system of trade and tariffs and the flow of people back and forth across those borders.”