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other ingredients tend to offset one another during any particular year. In certain situations we increase prices to offset rapidly escalating costs. An exam- ple occurred in 2003 when vanilla bean costs rose steeply due to a crop shortage, 

and we responded by increasing prices. We went even one step further. With our global sourcing capabilities, we were able to secure a strategic inventory of vanilla beans to guarantee a supply of vanilla extract for our customers. 

## You have made several acquisitions in recent years. Are you looking for more? 

Yes. Acquisitions which expand our flavor offerings or our geographic penetration are key components of growth. 

For our consumer business, we are seeking leading brands of spices and seasonings in those markets where we do not have a strong presence, particularly in Europe. Silvo was an excel- lent example of acquiring a leading European brand. With a 63% market share, it was a great way to expand our business into the Netherlands with a highly regarded brand of spices and herbs. In established markets, we search for products that deliver distinct flavors. Here in the U.S., our 2003 acquisition of Zatarain’s is a great example of this; Zatarain’s unique New Orleans flavors appeal to consumers. 

As for our industrial business, we have a broad range of flavor solutions for our U.S. customers and plan to expand our current capabilities in international markets through acquisi- tions. Regardless of the type of acquisition, a disciplined business plan, a detailed integration plan and a rigorous financial review are the keys to success. 

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= Ethical Behavior Teamwork High Performance Innovation Concern for one another Success 

deep knowledge of the business and excellent relationships with suppliers and customers. Careers are advanced through train- ing and challenging on-the-job experiences. Each of us has measurable goals, and our achievements are rewarded. Employee values are the foundation of our success. 

Our leadership team is focused on growing this business. And throughout the Company, our high performance employees are delivering great results – to our customers, our consumers and our shareholders. 

## How did you develop the “flavor forecast” at the front of this report? 

This is our third edition of the “flavor forecast.” It is published for the benefit of our many customers and is shared with the food industry media throughout the U.S. The “forecasters” include chefs, culinary television personalities, cookbook authors and our own trend experts. 

Our business at McCormick is all about flavor. We have the broadest range of flavor solutions in the industry and believe that no matter what you eat each day, you are likely to enjoy the taste of McCormick. Throughout this report, our develop- 

ment team shares some ways to bring the latest trends into your home. Bon appetit! 

## What do you consider to be the “key ingredient” to McCormick’s success? 

Our “key ingredient” is without question the people of McCormick. Their enthusi- asm, values and drive to win are unmatched. Our employees possess a 

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