In the condiment market, the Chinese people have always been proud of lao gan mama's entry into the European and American markets. What many Chinese don't know is that in the Chinese condiment market, the sales of McCormick products in the United States far exceed those of Lao Ganma, and even the potato chips and Haagen-Dazs that we are familiar with are Products of McCormick.
A century-old shop of condiment brands
Verobi McCormick discovered a huge market for condiments while in college. In 1889, after graduating, Verrobi founded McCormick in his hometown of Baltimore. When McCormick was first founded, it did not take spices as its main business, but sweet sauce with fruit sauce as the main ingredient. So in the first few years of the company's existence, the established logo was a bee that loved fruit.
From the beginning of its business, McCormick has always focused on three things, research and development, mergers and acquisitions and the expansion of sales channels.
Attach importance to research and development and constantly innovate
In order to grasp the market trend in time, quickly launch products. McCormick built a City of McCormick in Silent Valley, Baltimore very early on, with its headquarters, research centers, laboratories, and factories in this small, scenic town.
In the field of research and development, McCormick is quite innovative. The world's first seasoning bag, the earliest tea bag in the United States, is a pioneering achievement of good taste. After years of research and development, McCormick has launched ketchup, sauce sauce, milk sauce, spice sauce, hot sauce and various seasoning powders in the United States.
Every year, McCormick publishes a consumer taste forecast report based on market survey results. McCormick's R&D center will conduct research and development according to the report, so McCormick will launch dozens of new products every year.
Mergers and acquisitions open the way to layout the world
In 1896, McCormick acquired Philadelphia and the Spice Company, and has since entered the field of spices and condiments. Since then, the company's business has grown rapidly, and before the 20th century, McCormick was already one of the largest condiment brands in the United States, second only to Heinz.
In 1900, McCormick established the Foreign Trade Department in New York and began to go to the global market. McCormick products are popular in Central America, South Africa, and the Caribbean. After World War I, as the United States intervened in the war, American soldiers brought McCormick products to Europe, and McCormick began to enter the European market.
After World War II, as the influence of the United States expanded globally, McCormick had completed its global market layout before 1945. McCormick enters foreign markets by relying on strong capital and directly merging with local condiment companies. With acquisitions and mergers, McCormick has established factories and sales channels around the world.
The industrial customization and catering segments became the main business
In the 1970s, McCormick gradually shifted its sales direction from the supermarket retail sector to the catering sector, and began to provide high-quality condiments for major catering and food enterprises. McCormick has gradually become a designated condiment supplier for Pizza Hut, McDonald's, KFC, Starbucks and other catering enterprises. Star hotels and high-end restaurants in Europe and the United States use McCormick as the designated condiment supplier.
In addition to the catering field, McCormick has also entered the field of industrial customization. Today, nine of the top ten food companies in the United States are Users of McCormick, and the revenue in the field of industrial customization accounts for about 40% of McCormick's total revenue all year round.
The history of The development and growth of McCormick is also a history of corporate mergers. McCormick's mergers and acquisitions are very distinctive, first of all, McCormick only acquires companies that are leading in the condiment industry segment, which is the cheapest and most convenient way to enter the market segment. McCormick diversifies its business by diversifying its product types through acquisitions.
Secondly, McCormick pays more attention to the construction of the industrial chain and focuses on the acquisition of upstream and downstream enterprises. McCormick acquired Armano Farms, the largest leek processing company at the time, in 1986. In 2017, McCormick took companies such as BotanicalFoodCompany, Australia's largest supplier of plant spices, into its hands.
By the 1980s, McCormick had become a giant in the global condiment industry with more than 20 brands. Since 1987, McCormick's sales have grown at a rate of about 10% per year, making it the most stable and fastest growing condiment company in the United States.
In 2003, McCormick became the first S&P 500 condiment company to enter. This is a list that only companies with sound development, financial health, and are highly optimistic about the market can enter.
By FY2017, McCormick accounted for 20% of the global condiment market, with Sales of $4.4 billion and net profit of $472 million. In 2019, McCormick's global sales exceeded $5.4 billion, more than 7 times the turnover of Lao Gan Ma.
Entering China is king in the catering sector
The global layout of McCormick will naturally not let go of the Chinese market. On the occasion of its centenary, McCormick officially entered China. In the Chinese market, McCormick still divides its business into a retail sector that directly faces consumers, a catering sector for catering enterprises, and an industrial customization sector for food enterprises.
In the early days of entering the Chinese market, many of the products launched by McCormick were not competitive. Therefore, in the retail sector, McCormick cannot compete with Chinese giants such as Haitian, and ordinary Chinese are more inclined to choose Haitian or Lao Ganma's products when choosing condiments in supermarkets.
In order to compete with domestic condiments and make up for the shortcomings in the field of domestic condiments, McCormick continues its tradition of seeking annexation. For example, the famous Wuhan Bridge MSG and Chef Le have been recruited by McCormick, which has made McCormick occupy a place in the Chinese MSG and chicken essence market.
While actively acquiring mergers and acquisitions, McCormick is also actively developing new products that are suitable for Chinese tastes. To this end, McCormick has sent a strong team of experts after making a meticulous investigation of the Chinese market. Based on the tastes of Chinese, McCormick quickly launched products such as chili sauce and salad dressing that meet the tastes of Chinese.
After the 1990s, According to the different tastes of the north and south of China and the taste preferences between various provinces, Weihaomei has made targeted adjustments. The segmentation strategy has made McCormick's products impress the taste buds of Chinese consumers, and the sales of McCormick products have begun to grow, and since then, McCormick has gotten rid of its weakness when it first entered the Chinese market and become an important enterprise in China's condiment market.
After gaining a firm foothold in the Chinese market, McCormick continued to exert its strength in the catering sector. After the reform and opening up, McCormick's products have blossomed everywhere in China with international catering brands such as KFC. Today, China's large chain catering enterprises are all customers of McCormick, and McCormick products can be found everywhere in hotels and restaurants large and small across the country. The food and beverage sector is now McCormick's largest source of revenue in China.
Constantly develop new products to seize new markets
Compared with the poor research and development of Chinese condiment companies such as Lao Ganma, the difference between McCormick is that it can constantly launch new products, which is another important reason why McCormick can take root in China for thirty years. Since the second half of 2017, McCormick has opened up the field of breakfast condiments in China. The breakfast spread and breakfast seasoning packages launched by McCormick have entered the market, becoming another successful expansion of McCormick in the field of condiment segmentation.
In today's Chinese condiment market, Haitian is undoubtedly the hegemon, haitian in 2019 has a market value of more than 41 billion US dollars, ranking 31st in the world. McCormick and foreign brands such as Heind and Nestle are catch-ups in the Chinese condiment market.
The biggest advantage of Chinese condiment enterprises in the market is that they are more familiar with the tastes and habits of the Chinese people. With the passage of time, Heinz, Nestlé, McCormick these international condiment giants will become more and more familiar with the needs of the Chinese market, with its strong scientific research capabilities and market expansion capabilities, the competitiveness of these foreign brands in the domestic market will only become stronger and stronger, and the competitive pressure faced by Chinese condiment companies is still very large.