McCormick Canada CEO Keith Gibbons says baby boomers’ willingness to try different flavours and different foods increases with age. 'We are seeing increased experimentation.'Mark Spowart for The Globe and Mail
Baltimore, Md.-based McCormick & Co. is one of the biggest players in the worldwide spice business, generating $3.7-billion in revenue last year. Two of its iconic brands, Club House and Billy Bee honey started out in Canada, and are now part of a global empire that is expanding rapidly through acquisitions in Asia and elsewhere. Keith Gibbons, a former financial services executive, runs the 650-person Canadian operation based in London, Ont.
Is the spice industry essentially recession-proof?
People need to eat. They will be eating at home or eating out [and]that will ebb and flow with their discretionary income, based on what's going on in the economy. McCormick Canada has a hedge built in because we service [both]those segments – the consumer retail business represents about two-thirds of our business and the other one-third deals with food service – restaurants and other food manufacturers.
Did eating patterns change during the last recession?
We certainly saw less restaurant activity. Shoppers looked for value more than they had previously. Discounting and couponing were very important. And we saw a back-to-basics [move to]hearty meals and use of slow cookers.
Is food processing underrated as an industry segment in Canada?
There are more than 300,000 employees in the food and beverage processing sector. It is the largest component of manufacturing – greater than automotive. Then [there are]all the spinoffs and the indirect jobs. And these are high-quality jobs, with wages on average about 25-per-cent greater than the national average.
Can you spot any specific food trends?
One of the trends that we've identified is the emergence of buying local, seasonal produce. [But there is also]a resurgence in trying to match local vegetables with global flavours. [People]are trying to twin those things together.
Are cooking and spices becoming more international?
In the Canadian marketplace, with Chinese and Indian [immigration] there is a much greater awareness and interest in trying other foods. The other trend we [see]is that baby boomers' willingness to try different flavours and different foods increases with age. We are seeing increased experimentation. They are saying, I am not afraid to try something with cumin or cardamom, whereas maybe five to 10 years earlier they would not even have entertained that idea.
You worked for two years in McCormick's Asian operations. What are the company's expansion plans there?
Part of McCormick's strategy is to expand into emerging markets. [When I was in Asia]I spent a fair bit of time looking at acquisition opportunities, particularly in China and India. We are looking for strong, local brands that are well recognized.
We are [also taking]our global or international products from those markets and bringing them to Canada. More than 50 per cent of the immigrants coming in to Canada are from either China or southeast Asia, so that is our focus.
How do you tackle Asian markets with their long tradition of buying bulk spices?
As the middle class grows, and a sense of consumerism grows, there is a greater appreciation and awareness for packaged products for health and sanitary reasons, and a recognition of the value of what a brand brings to products.
We have seen that in China in a significant way. In India we are just starting to see that trend emerge. If we look out over the next five to 20 years, we are confident that we are going to see more of a migration from bulk spice to the packaged branded product.
Isn't that essentially exporting North American values and tastes?
I believe it is a recognition from individuals that they want to ensure they are eating healthy, safe, reliable food. Let's face it, there are some concerns with products available in bulk, as opposed to packaged [spices]from responsible manufacturers.
You spent a lot of time in the financial services sector before switching into food. Why did you make that move?
I had been in the financial services sector for about 20 years, and I felt I had about that same amount of time in front of me before I retired. I wanted to do something very different. I was looking for a real significant change.
What are the differences between finance and food?
The most obvious difference is that you are actually making a physical product, as opposed to providing promises. But you know, business is business [when it comes to]understanding the market and ensuring that you have the right strategies in place to capitalize on it. There is a great deal of similarity, but the nature of the products themselves are vastly different.
How many of your products do you source in Canada?
Billy Bee honey comes from northern Alberta, Manitoba and Saskatchewan for the most part. There are very few spices that are grown in Canada, [but]mustard seed is one. We certainly use [Canadian]flour in some of our products, and starch. But the vast majority of our purchases are sourced through our global supply chain from Africa or the Middle East or Asia.
Has your company created any Canadian spice products?
Our Montreal steak spice, for example, was developed in Canada more than 25 years ago. If you go to the United States now or to Europe, and even to Asia, you will find it. It has been adapted to these other markets. The palates are a little different in these other markets, so there is a slight modification or a tweak to the formula.
Are Canadians consuming too much salt and are you modifying your products to help?
We provide [some]no-salt products in our consumer portfolio. On the industrial side, we are working with other food manufacturers to decrease salt content. Our food association has championed [salt reduction]pretty ambitiously, and we totally support it. They have worked very closely with the government to move forward with voluntary salt reduction limits.
Are Canadian tastes different from those in the U.S.?
They are actually very similar. However, from what I understand from our culinary experts, the Canadian palate likes a little more pepper than our U.S. friends. So even though we may have a product called the same thing in Canada and the U.S, the formula in Canada is different because we have a different expectation for heat.
Are there regional variations in Canadian tastes?
The palate in Quebec is different. There is more sauce used in cooking in Quebec than what we see in other parts of Canada. The implication for McCormick Canada is to ensure that we've got the right types of sauces they are looking for.
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KEITH GIBBONS
Title
President and chief executive officer, McCormick Canada.
Personal
Born in South Porcupine, Ont.; 58 years old.
Education
BA from the University of Western Ontario.
Career highlights
* A chartered accountant, he began his career with Clarkson Gordon (now Ernst & Young) in 1976.
* Joined London Life Insurance Co. in 1981.
* Moved to McCormick Canada as CFO in 2000, becoming CEO in 2004.
* Served as president of McCormick's Asia Pacific arm from 2008 to 2010.
* Returned to McCormick Canada as CEO in 2010.