Prepared Foods logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Prepared Foods logo
  • TRENDS
    • Prepared Foods The Year Ahead
    • Innovation Month
    • *Sustainability*
  • PRODUCTS
    • Bakery
    • Beverages
    • Breakfast, Cereals & Bars
    • Candy
    • Cannabis
    • Dairy
    • Meals & Sides
    • Meat, Poultry & Seafood
    • Sauces & Marinades
    • Snacks & Appetizers
    • Soups
  • INGREDIENTS
    • Antioxidants & Nutritionals
    • Colorings
    • Dietary Fiber
    • Emulsifiers, Fat & Oils
    • Flavors, Seasonings, Spices
    • Flours, Grains, & Pasta
    • Fruits, Vegetables and Nuts
    • Gums & Starches
    • Phosphates & Acidulants
    • *Proteins*
    • Sweeteners
  • FORMULATION
    • Allergens & Intolerance
    • Authentic & Ethnic
    • Cost Reduction
    • Fat Reduction
    • Gluten Free
    • *Immunity*
    • *Natural / Organic*
    • *Plant Based & Vegetarian*
    • R&D Lab Tech / QA-QC / Food Safety
    • Shelf Stability
    • *Sugar Reduction*
  • BETTER FOR YOU
    • Functional New Products
    • Functional Ingredients
    • Functional Benefits
  • FOOD MASTER
  • MEDIA
    • Podcasts
    • Videos
    • Infographics
    • Play With Your Food Game
    • Webinars
  • EVENTS
    • Spirit of Innovation Awards
    • Industry Events
  • MORE
    • Favorite Products Poll
    • First Person Q&A
    • Sponsor Insights
    • Store
  • EMAG
    • eMagazine
    • Archive Issues
    • Advertise
  • SIGN UP!
Breaking News

Cuts at McCormick

December 12, 2005
Prepared Foods December 12, 2005 e-newsletter

McCormick & Co. Inc. will cut an unspecified number of jobs across its global spice operation, consolidate manufacturing facilities, revamp its struggling industrial business and cut administrative costs as part of a plan to rebound from a disappointing year.

The world's largest spice maker is expected to take charges of $130 million to $150 million against earnings, with about 60% coming from severance and other personnel costs. The cuts will be phased over three years and are expected to save $50 million annually beginning in 2008.

McCormick executives had outlined the plan in September, but more details did not emerge until the company disclosed them in a filing with the Securities and Exchange Commission.

The moves reflect McCormick's difficulties in maintaining growth in the face of global competition and spotty demand.

"From our perspective, we are following through with what we said we would do in September, and it is going to take a while to implement the various steps," said Mac Barrett, a McCormick spokesman. Barrett could not provide details about where the job cuts would occur, except to say that they would span the company's global operations.

The company's industrial business -- selling spices and flavorings to food manufacturers -- lagged as key customers delayed introducing new products. It was hurt this year by large inventories of high-cost vanilla beans.

Demand is down in the U.K. and France, where discount spice marketers are capturing an increasing share of the market.

The company also lost sales after Hurricane Katrina, which damaged operations at its Zatarain's division outside New Orleans and dampened demand for the division's Cajun flavorings.

The company is taking steps to make its supply chain more efficient, in part by reorganizing its distribution systems. The reorganization also calls for eliminating redundancies in administration, reducing inventory and cutting the number of items it sells through retailers, to eliminate lower-margin products.

Most of the plan's cost will be incurred in 2006, with lesser charges this year and in 2007 and 2008.

Some analysts credit management for being aggressive, but see few prospects for improvement in growth over the next one to two years.

The news is particularly bad in Europe, where the spice maker is struggling to gain traction in a sluggish economic environment. Much of the restructuring probably will occur overseas, as the company reduces capacity to meet slack demand, analysts said.

"They have already taken out a lot of capacity in the U.S. and Europe, but if there is any area where they could see additional options, it would be in Europe," said Alton Stump, an analyst with Longbow Research in Cleveland.

Discounters have about 5% of the market in France, but up to 40% in the rest of Europe, Stump said.

The trends suggest discounters will increase their share in France at McCormick's expense, Stump said.

"With their current business, I do not see any positive news drivers for the next year or two," he said.

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Women in beverge isle

    Ingredient Demonization May Not Drive Consumer Behavior

    While tracking cultural conversations around demonized...
    2025 Food and Beverage Trends
    By: Prepared Foods Editorial Staff
  • Bubs Candy Packages

    Sweden’s Viral Candy Brand BUBS Lands in US Retail Nationwide

    TikTok videos of BUB's unique chewy-meets-marshmallow...
    Product of the Day
    By: Prepared Foods Editorial Staff
  • Innovation Month Logo Orange

    Introducing Innovation Month: A Deep Dive into the Future of Food & Beverage

    The next wave of food innovation is here. Dive into the...
    Innovation Month
    By: Prepared Foods Editorial Staff
Manage My Account
  • eMagazine Subscription
  • Newsletters
  • Manage My Preferences
  • Online Registration
  • Subscription Customer Service

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Prepared Foods audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Prepared Foods or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  •  A close-up of a fruit branch on a cherry tree.
    Sponsored byU.S. Tart Cherries

    When Provenance Meets Performance: The Case for U.S.-Grown Montmorency Tart Cherries

Popular Stories

SFA Fancy Bodega

Top 10 Product Development Trends From the 2026 Summer Fancy Food Show

Bimbo Bakeries USA  logo

Bimbo Bakeries USA Sets Timeline for Clean Label Reformulation

Utz_900.jpg

Utz to Go Private in $2.9 Billion Deal with Intersnack

PF Webinar sponsored by FoodChain: Signals to Shelf: Turning Consumer Insight into Executable Innovation

Events

June 18, 2025

Master the Art of Plant-Based Dairy

ON DEMAND: Whether you're in R&D, formulation, or innovation, this session will provide enzyme-driven insights to improve your plant-based dairy portfolio.

July 31, 2025

Green Means Go: Your Sustainable Product Development Toolbox

ON DEMAND: How do strategic innovation leaders, scientists and ingredient buyers incorporate sustainability into food and beverage new product development?

View All Submit An Event

Products

Recent Advances in Ready-to-Eat Food Technology

Recent Advances in Ready-to-Eat Food Technology

See More Products

CHECK OUT OUR NEW POWER TRENDS

Immunity Logo
Natural & Organic Logo
Plant Based Logo
Protein Logo
Sugar Reduction Logo Sustainability Logo

Related Articles

  • New VP at McCormick

    See More
  • Organizational Changes at McCormick

    See More
  • Cuts at Frito-Lay

    See More

Related Products

See More Products
  • GlobalData_logo_blue_header.png

    Chilled Raw Packaged Meat - Whole Cuts (Meat) Market in the United States of America - Outlook to 2024...

See More Products
×

Unlock the Future of Food and Beverage Innovation

Are you a leader in research & development? Stay ahead of the curve with Prepared Foods, the premier source of information and insights for today's trend leaders and taste-makers in food and beverage manufacturing.

JOIN TODAY
  • Resources
    • Advertise
    • Contact Us
    • Food Master
    • Store
    • Join
  • Sign Up Today
    • Create Account
    • eMagazine
    • Newsletters
    • Customer Service
    • Manage Preferences
  • Services
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • Stay Connected
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2026. All Rights Reserved BNP Media, Inc. and BNP Media II, LLC.

Design, CMS, Hosting & Web Development :: ePublishing