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McCormick's report to shareholders spiced with dollars and, yes, scents


You riffle through the day's mail and see nothing but corporate junk mail. Suddenly, you're surrounded by a sweet smell. Vanilla? Pound cake? Is someone cooking in the office?

Someone's cooking all right. McCormick & Co. Inc. has, once again, cooked up a way to stand out from all the other companies sending out annual reports at this time of year, and, perhaps, use a little olfactory persuasion to win new investors.

For the 18th consecutive year, the Sparks-based company has infused its annual report with a scent. This year's offering: vanilla butter and nut, a common flavoring in pound cake and cookies.


"It makes sense . . . no pun intended," said Diane Hamel, who is in charge of producing the annual report for the country's biggest spice seller.

"It is a good public relations tool. You can follow your nose to our annual report," she said.

And since the company chooses smells that give people "warm fuzzy feelings," Ms. Hamel says that the company hopes that vanilla is also the smell of money.

"Maybe we'll sell a little more stock," she said.

But those sales will come at a price -- and not just the extra 9 cents it costs to add the scent to each of the 55,000 reports printed this year at a cost of about $2.50 each.

It takes a lot of work -- and maybe a little suffering -- to make what is probably the nation's only scented annual report.

Ms. Hamel starts research for each report in the summer. McCormick flavor experts mix up several scents, and Ms. Hamel arranges for sample printings of each batch to see how they smell on paper.

The concentrates are mixed in with a kind of varnish, then rolled onto uncoated, nonglossy paper, such as the pages that feature financial tables in this year's report. The smell won't stick to the slick pages. Because the scent tends to stain white paper, McCormick only applies it to colored pages.

Although McCormick is one of the nation's biggest sellers of garlic and onion, those smells are frowned upon by the company bigwigs.

Experiments with other popular herbs, such as marjoram, haven't worked out well either, Ms. Hamel said. "They have a tendency to smell grassy," she said, and aren't easily identifiable.

That's why, over the years, most of the reports had scents with cinnamon or vanilla bases.

The most daring scent: clove.

"We were afraid people would associate it with the oil of clove used by dentists" and would be reminded of unpleasant memories, she said. McCormick wants "that cuddly feeling . . . that scent you instantly recognize," she said.

But even McCormick's warmest scents can cause problems.

When Hunt Valley-based printer E. John Schmitz & Sons Inc. won the contract to print McCormick's annual report in 1987, Mr. Schmitz wasn't worried about his first scenting job -- until he noticed the overwhelming gingery scent as the presses started up.

Then he noticed that he was starting to itch all over.

Now, Mr. Schmitz prepares for the McCormick annual report by taking antihistamines.

And some stockholders react badly to the idea that McCormick is spending extra money on such frivolities, Ms. Hamel said.

But many members of the McCormick investment family find the scents appealing, she said.

Some may find it a little too appealing. McCormick received one complaint from a shareholder who swore that the family dog ate the annual report.

Perhaps that's why no companies have followed McCormick's trail. Although Ms. Hamel has advised soft drink makers and candy companies on their process, no other company has scented their reports regularly, she said.

One reason: most hard boiled investors don't let their noses influence their investment decisions.

Steve Norwitz, spokesman for T. Rowe Price in Baltimore, one of the nation's leading mutual fund investors, said his company receives thousands of annual reports each year. Hard-headed analysts care only about the words and numbers in each.

"Nobody," he scoffed, "would buy stock because the report smells good."

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