Seasonings, spices and herbs ... historically entire kingdoms were mortgaged to find faster access to more spices. The flavorings now are so commonplace, everyone has a drawer or location in their kitchen for spices.
With 91 percent household penetration and a usage rate of at least once daily by 88 percent of consumers (according to a 2004 study by Mintel Intl. Group) growing this category requires some novel ideas. Twelve spices (including dehydrated onion/garlic, mustard seed, sesame seed, and red, black and white pepper) represent 96 percent of U.S. consumption. So how do you grow this market beyond the population growth rate?
Americans are cooking less, looking for meals with fewer steps and buying more prepared and ready-to-eat foods. Not only are we less involved with preparing meals, but we spend less time eating and more time snacking. Paradoxically, we want to feel that we prepared the meal ourselves.
|Above: McCormick's first crack at the Grinders concept, from back in 2004. Below: The new, six-flavor line, Gourmet Collection Grinders, will be available this fall in grocery stores nationwide.
Our cuisine styles have become more varied, with Italian, Chinese and Mexican now considered the norm along with American. We are more accepting of other ethnic/cultural cuisines, with Cajun, French, German, Caribbean, South American, Greek, Soul Food and Thai as up-and-coming cuisine styles (according to our own 2005 It!s Convenient study). We like flavor and many want more of it. Seasonings, spices and herbs can add taste without adding calories or fat.
McCormick and Co. set out to create a premium herb mix that would fit all of these divergent needs. The result is the McCormick Grinder collection; we're focusing on Italian Herb. The Hunt Valley, Md., spice company not only created interesting mixes of herbs and spices for this collection but built right into the top of the glass bottle an easy-to-use grinder. The line was launched in mid-2004, Italian Herb was added in mid-2005, and McCormick recently unveiled an even higher-end line, Gourmet Collection Grinders, with the grinder in the bottom of the bottle, that will debut this fall.
Understanding the marketplace
The seasoning, herbs and spices category grew 2.2 percent between 1998 and 2003 and has an overall market size of $2.2 billion, according to Mintel. The big driver of this mature category is new products, specifically seasoning blends with more diverse ethnic flavors.
The category breaks down into seasonings and seasoning-and-sauce mixes. Seasonings have just less than 80 percent of the market. Seasonings grew 4.8 percent to $1.7 billion between 2001 and 2003. Within this subcategory, herbs, spices and blends increased 18 percent between 1998 and 2003. Seasoning-and-sauce mixes increased 1.9 percent between 2001 and 2003 to $500 million.
Private label growth has been fairly substantial, so this mature category needs to become more value-added to drive overall margin growth. Seasonings and spices are pantry staples and have a 91 percent penetration rate, according to a 2003 Simmons National Consumer Survey. Seasonings and spices are in danger of becoming viewed as commodities. At retail consumers primarily see McCormick and private label, followed by Morton, Lawry's, Tone Brothers, Best Foods and General Mills.
Those consumers who use the category less are younger people (18-24) and older folks (65-plus). The former is attributed to younger consumers' minimal knowledge of cooking and spices. If they do use them, they tend to use blends. It is believed that older consumers tend to be less tolerant of spicy foods and therefore use less seasonings and spices.
Spices are used most often in scratch cooking by women. Spice usage tends to be ethnically driven and regional. The ethnicities of Hispanic, Black and Asian, and the southern and western regions of the U.S. are heavier users. This might suggest a more regional marketing strategy. However, unless the manufacturer has a great logistics system, regional marketing may get very expensive. Another opportunity is to look at usage in terms of enhancing take-out food by men and younger consumers.
This all leads to a concern over how to create usage opportunities for spices. How do you support traditional usage behaviors (scratch cooking) yet enhance newer and more novel behaviors (customizing take-out foods)? McCormick came up with a package that supports and enhances both behaviors.
Grinding enables you to use more spices at the table, rather than just in cooking. The herb blend is whole in the container and is freshly ground from the container and so creates a premium feel.
McCormick understands consumers need flavor for all their foods - foods created at home and foods purchased elsewhere but eaten at home. The company is trying to shift the seasoning paradigm from that of seasonings added while cooking to seasonings added just before consuming.
This is complex, since it deals with supporting behavior while cooking and enhancing behavior while consuming. McCormick is using the perception of premiumness not only to drive shelf price (and hence margins) but also to move the seasoning out of the kitchen and onto the table.
There are many seasoning choices: traditional, fresh, garden-grown plants, dried seasonings, blends, mixes, rubs and sauces. The driver of choice is usually usage during cooking or at the table. What is difficult for McCormick is there is not enough table landscape to hold all the options so consumers might flavor individually. Creating blends gives the consumer individuality, approachable ethnicity and familiarity as the blends are culinary-style based.