MCCORMICK & COMPANY 2004 ANNUAL REPORT With blended seasonings, spices and herbs, condiments, compound flavors and extracts, and coating systems, McCormick has the broadest range of flavor solutions in  the industry. We are growing the industrial business by: Supporting the global expansion of our industry-leading customers. Our customers are growing globally, and we are growing with them. Additional restaurant locations in China, product distribution into India, a new brand launched in Europe . . . each of these offers McCormick an opportunity for growth. We can supply much of this growth from existing facil- ities. We are also seeking to extend our global flavor capabilities into new regions through acquisitions. Building current and new strategic partnerships. At the end of 2004, our top 15 customers accounted for approximately 70% of sales. They rely on us for consistent, high quality products and flawless service. We will increase our business with existing customers by working collaboratively to pursue growth oppor- tunities. We also have in place a team devoted to identifying and developing new strategic partners. These opportunities include large companies that we do not currently supply, as well as emerging businesses, such as restaurant chains, that are expe- riencing rapid growth.  ” Ginger is commonly used in baking but my favorite use is to give a recipe some Asian  character, especially with poultry and seafood. I like to add a spoonful of McCormick ground ginger per pound of fish along with some toasted sesame seeds in the breading. It will provide a very fresh taste, which may be com- plemented with lime juice (at the  moment of serving) and will reduce any‘fishy’ aroma. ” Claudio Rattes Senior Food Technologist, Research & Development > / aA We are building our leadership position in flavors. With our wide range of flavor solutions and ability to create consumer- preferred products, customers increasingly turn to McCormick for new product ideas and as a preferred supplier of great flavor solutions. For 2005, new products in the pipeline include flavored beverages, salty snack seasonings, and coating and grilling systems. With cost reduction activities helping the bottom line, profit margins for the industrial business will continue to improve. Our growth initiatives are expected to drive 5% annual sales increases. The pace of growth may vary year to year due to acqui- sitions, foreign exchange and other factors. Our ongoing focus on value-added products will continue to boost profit margins. outlook growth initiatives  15 Providing consumer-preferred value-added products. Innovative new products are in demand. With our breadth of flavor solutions, we can participate in the latest high growth area, whether it is dairy, confection, high fiber or low carb. Our culi- nary and flavor experts add value by including sophisticated flavors in coating systems, seasoning blends, condiments and other products. And our sensory teams conduct careful testing to measure consumer preferences. As our business shifts to more consumer-preferred value-added products, we are grow- ing sales and improving profit margins.