• by Nina Lentini , November 15, 2007

Sparks, Md.-based McCormick & Company is spicing up the holiday season with the acquisition of Unilever's Lawry's and Adolph's brands for $605 million in cash. While the agreement won't be finalized until well after the upcoming holidays, McCormick is already celebrating a land grab in wet marinades.

Joyce Brooks, assistant treasurer at McCormick, tells Marketing Daily that "this business has been on our target acquisition list for a long time. So, when Unilever decided to sell it and we were able to purchase it through auction--well, it's been terrific."

Since the closing of the transaction is subject to the expiration or termination of the Hart-Scott-Rodino waiting period and other customary closing conditions that could be months away, Brooks declined to discuss the acquisition's impact on its marketing strategy at this time.

But in a statement, Chairman/CEO Robert J. Lawless indicated that marketing muscle will be strengthened. "We are excited about the opportunity to enter the growing marinades category and to achieve synergies through the utilization of our manufacturing assets to produce the seasoning blends. We intend to invest a portion of the synergies we achieve to reinvigorate sales growth through innovation and focused marketing."

According to Nielsen Monitor-Plus, McCormick spent $44 million in 2006 on advertising versus $23 million so far this year. Lawry's spend $5.4 million last year, but just $660,000 so far this year.

McCormick also said the purchase supports its "long-term outlook to grow sales 4-6%." Annual sales of Lawry's and Adolph's products are about $150 million, McCormick said, mostly in the U.S. and Canada.

The Lawry's business includes a full line of seasoning blend products under the Lawry's and Adolph's brands that are marketed in grocery stores and other consumer outlets, and account for 65% of sales. Another 23% of sales are Lawry's wet marinades, which lead the category in the U.S. market. Sales to food service customers represent the remaining 12%.

The acquisition includes the rights to the brands as well as related inventory and a small number of dedicated production lines. It does not include any manufacturing facilities or employees.

"It's a great strategic fit," says Brooks. "There are some synergies in the seasoning blend manufacturing, and a new category, wet marinades. We have some seafood marinades but nothing strong in wet marinades."

As for its part, Dutch-British giant Unilever said the transaction "takes us a step forward as we continue to reshape our portfolio in North America by sharpening our focus on building strong brands with global reach."

The transaction is part of Unilever's announced plans to dispose of non-strategic brands, with collectively more than €2 billion in turnover.