Good morning. My name is Dawn, and I will be your conference operator today. At this time, I would like to welcome everyone to the McCormick Fourth Quarter 2013 Earnings Announcement Conference Call. [Operator Instructions] Thank you. Ms. Joyce Brooks, you may begin your conference.

Good morning. This is Joyce Brooks, McCormick's Vice President of Investor Relations. Thank you for joining today's call for a discussion of the company's fourth quarter financial results and 2014 financial outlook. We've posted a set of slides to accompany the call at our website, ir.mccormick.com. [Operator Instructions] As a reminder, the conference is being recorded. With me on the call are Alan Wilson, Chairman, President and CEO; and Gordon Stetz, Executive Vice President and CFO. During our remarks, we will refer to non-GAAP financial measures. These include adjusted operating income and adjusted earnings per share that exclude the impact of special charges and a loss on voluntary pension settlements. A reconciliation to the GAAP results is included in this morning's press release, as well as the slides that accompany this call. Please note that today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or other factors. As seen on Slide 2, our forward-looking statement also provides information on risk factors that could affect our financial results. It's now my pleasure to turn it over to Alan.

Thanks, Joyce. Good morning, everyone, and thanks for joining us. At McCormick, we made important progress during our 2013 in our growth strategy. We achieved solid sales growth in a number of our key markets, expanded our business in China with our first acquisition in that market, delivered significant cost savings with our CCI program and generated $465 million of cash flow, returning a record $357 million of this cash to our shareholders. While consumers in many developed and emerging markets remain under pressure, the growth of our core categories remains healthy. Slide 5 shows the latest 52-week category increase for spice and seasonings in our top markets. And Slide 6 shows the latest Euromonitor data that projects a robust pace of growth through 2018, not only for spices and seasonings but across a number of flavor categories. Consumer demand is on the rise in pursuit of new flavors, ethnic cuisines or spices and herbs as a replacement for sugar, salt and fat. These are just some of the trends driving this growth. As a global leader in flavor, McCormick is well positioned to meet this demand. We have leading category shares that span a broad range of flavors and all price points from premium to private label. Our flavors reach consumers at all eating occasions: meals at home, eating out or grabbing a snack. And through acquisitions and regional expansion of our industrial business, we are increasing our geographic presence. Our fourth quarter sales performance reflected these positive trends in most parts of our business, but did not meet our expectations for the U.S. consumer business. As a result, for the total the company, our rate of sales growth was below our expectations in the outlook that we shared with you in our September earnings call. And while we…

Thanks, Alan, and good morning, everyone. As Alan described, our fourth quarter results varied by business segment and region, with strength in a number of areas and weakness in our U.S. consumer business this period. I'd like to begin with a look at the sales and operating income results for each of our 2 segments, starting with the consumer business. As shown on Slide 17, consumer business sales rose 3% in local currency. Included in this result were a 4% contribution from our WAPC acquisition, offset by the impact of the estimated $30 million shift in U.S. sales to the third quarter from the fourth quarter. As we discussed in our September earnings call, this related to customer purchases for our holiday display program and in advance of a pricing action. So excluding these impacts, we grew underlying consumer business sales by about 3%. Slide 18 shows our Americas region results, which included the unfavorable impact of the sales shift that lowered sales growth by an estimated 5.5%. Excluding this impact, sales rose about 2.5%. Heading into the quarter, we had expected stronger growth this period based on our holiday marketing activity and new products, as well as a favorable comparison to the fourth quarter of 2012 when sales were adversely affected by Hurricane Sandy and retail purchase patterns. However, as Alan discussed, U.S. sales were below our expectations for the quarter despite strong category growth and actions are underway to improve our financial performance in 2014. In this region, we achieved good growth in Canada with particular success in innovation that included gluten-free gravy mixes and authentic ethnic items imported from our businesses and affiliates in China and the Philippines. In Europe, the Middle East and Africa, EMEA, sales in local currency rose 2% from the year-ago period. The…

[Operator Instructions] And your first question comes from the line of Chris Growe. Christopher R. Growe - Stifel, Nicolaus & Company, Incorporated, Research Division: Just 2 questions for you. If I can lead off, first, with -- as you had a little more sort of sluggish demand across the business on the consumer side in particular, I want to ask about the increase in marketing for the coming year. And is that more trade-oriented or actual, sort of, consumer marketing? And then maybe related to that, you have a lot of CCI cost savings coming through, but should we think about more of those savings having to be invested back in the business and not being as sort of readily available to the company going forward, if it's going to require more and more investment to sort of spur revenue growth here?

Yes, the main focus of our marketing, especially in the U.S., is on the consumer. We're going to spend about 40% of that marketing -- the advertising spend in digital, which is going directly to consumers in the U.S. We will have our usual trade promotion and marketing development funds but a lot more of that money is going into equity build as opposed to price discounts. And our CCI program is right. We typically think of our CCI as our fuel for growth. And so we would expect to continue to reinvest to that, back in the business. Christopher R. Growe - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then related to the cost inflation outlook for the year, is there any kind of discrepancy or difference between the consumer division and the industrial division? I know industrial has more of a pass-through mechanism, but I was curious if some of the inputs in that division are actually moving down in the short run and maybe consumer's up more than industrial. I'm just curious as to the difference between the 2 divisions there.

Well, I wouldn't say, Chris, there's any -- you can get slightly out of balance relative to what you just described with the pass-through mechanisms. But I'd say, in general, they're pretty much in line.

Your next question comes from the line of Akshay Jagdale.

This is actually Lubi on for Akshay. Just 2 quick questions, if I may. First off, can you quantify the expected contribution from lower pension expenses, as well as the accretion from acquisitions to fiscal '14 operating income?

Yes, the pension benefit we mentioned was a $15 million reduction to the 2014 pension compared to the 2013 pension expense. We didn't get specific about the accretion from the acquisition. In the initial model that we provided at the time of the acquisition, we said about $0.03 in 2014. As you heard in Alan's comments, we're tracking quite well against that.

Okay. Great. And then could you give us an update on the Kohinoor acquisition, just what is the outlook for paddy supply, paddy pricing, distribution gains, et cetera?

Yes, we expect an improved result in India this year. We're starting to implement our programs of value-added rice mixes to go with the basmati rice. We are in a better inventory position and we are expecting that we'll be able to grow that business this year.

Okay. Any sort of projections or thoughts on where how much paddy supply is expected to grow or...

I'm afraid I don't have that at hand.

Relative to our total inventories, it's not a really huge material item. So we -- it's not typically something we break out separately.

Your next question comes from the line of Ken Goldman. Kenneth Goldman - JP Morgan Chase & Co, Research Division: Alan, can you talk a bit more about some of the drivers that you think are causing your share losses in the U.S? We've seen some categories in food that, maybe a decade ago, benefited from a mix-up or volume-to-value strategy, and we're seeing somewhat of a reversal of that in those categories. I'm just curious to what extent that may be true at all with spices and seasonings, or whether you're seeing something different out there that's maybe affecting your share in your view.

Yes, I think there's a couple of things going on. One is an expansion of private label at multiple price points at some customers. There's also been some gains by smaller competitors, both from the value price and the premium price, that are having some impact. Our strategy to go after that is a couple. One is very aggressive category management and telling the story and helping our customers to remember the strong profitability of the spice and seasonings category and the importance of that to them, and the importance of McCormick in driving that profitability. Because some of the things that are happening aren't necessarily driving the profitability. On the premium side, what you'll see this year is a relaunch of our Gourmet business with a strong emphasis on differentiating the superior quality and sourcing of our products in Gourmet. We really believe the trends are there. So it's not a one-size-fits-all, it's really focused marketing against some very, very specific segments. Kenneth Goldman - JP Morgan Chase & Co, Research Division: And just a follow-up to that, as you think about your strategy, dealing with your customers as they perhaps pursue or experiment with more of a private label or smaller competitor strategy, you guys had a lot of success convincing Wal-Mart a few years back to go away from their testing of that. Do you use the data from that? Do you use the -- or are these retailers not even testing it, they've just sort of made a decision to go for it and you have to sort of convince them to reverse that on a more permanent basis?

Well, and without getting into a lot of specifics, on a lot of cases, they're coming in through different departments. They're not necessarily in the spice aisle, they may be in the produce aisle or finding their way into different parts of the store, and aren't as readily visible to the category managers we're dealing with. So we are telling that story. The second thing that we're really doing is showing a lot of that data that's still applicable that we saw in that test, where the consumer really wants to buy the brand. And what we wanted to be able to show them is the value and the differentiation in product for the brand.

Your next question comes from the line of Robert Moskow. Robert Moskow - Crédit Suisse AG, Research Division: My question is similar to Ken's. I was looking at kind of long-term market share trends in the category. And the McCormick brand, according to Nielsen, has fallen every year in terms of overall share of spice and seasonings. So -- and I appreciate the commentary here on category management and how you're going to push that harder, but I guess I've also heard from you more advertising, more innovation. Have you thought through the advertising and innovation that you've done over the past 3 years? It seems like you've done a lot. You're at $300 million in investment now. Why hasn't that worked better, I guess, Alan?

We're continuing to evaluate the programs. We have some programs that have worked pretty well, some that haven't worked as well. Some of our spend has gone into some trade funds that weren't as productive as our equity building. And I think what you'll find is a lot more of a focus on building and driving the equity and supporting new products that we're bringing out. Our innovation pipeline has been -- in some of our markets, hasn't been as robust as we need it to be. And what we're really doing is relooking at our whole strategies. And so we're launching a lot of products that are working in other markets. And the gluten-free gravies from Canada is a great example of that, where we believe that it will help to drive growth in the recipe mix category. So we're really relooking at a lot of the things that we're doing. Robert Moskow - Crédit Suisse AG, Research Division: I appreciate the color. One last question on the tax rate, just a modeling question, but I think the guidance was for a 29% tax rate for fourth quarter. You came in at 24.5%. There's only $0.01 here from a discrete item, and the rest appears to be just the mix of the geographies. I mean, was the mix of geographies that substantial in order to drive that big of a change in how the tax rate came in? Is it -- was the U.S. that weak compared to your expectations, I guess?

It certainly was a big factor. I would -- yes, certainly, it's relative to the expectation on the sales growth line. You can see it did not come in relative to the expectation which guided that rate. So that certainly was a big impact. Robert Moskow - Crédit Suisse AG, Research Division: Okay, so that's the issue. So as your U.S. business improves, that's going to drive your tax rate higher for 2014.

That's one of the factors. And I also mentioned there's some legislative changes that were passed in December in France that are negatively impacting us on that rate. Part of that is the retro. There's a retro nature to it that will impact Q1, so that's why we're guiding to the upper end of that range in Q1. And then obviously, business mix and some of the lack of discrete items.

Your next question comes from the line of Thilo Wrede.

I just had a quick follow-up on that question about private label and your marketing. I think if I understood you correctly, you focused quite a bit of increased marketing on the Gourmet line, yet the market share growth comes in private label. What does that -- does that discrepancy make sense? And with your focus on value-added product in an environment where consumers seem to go for the discount option, should you maybe have more low-priced offerings?

Yes, we didn't mean to imply that all of our spending or a lot of our spending was in Gourmet. We are relaunching Gourmet and there's going to be support behind that. And that generates a fairly small percentage of our sales, but it's a very profitable mix of sales. We are focused on a number of large events, everything from our current Super Bowl cooking activity, to Easter and Grilling. So I didn't mean to imply at all that we're only focused on the premium segment. We're really focused on making sure consumers understand the value of McCormick and the value meals that they can prepare that are using our products. So it's not so much on driving the premium products. We are -- we're really focused on building the equity. And we have to just -- go ahead.

Sorry, I was about to say that, that was my misunderstanding then. But the question still is, should you maybe have more discount offering?

Well, we participate in all price points in the -- in -- across the market, everything from opening price point to private label for our customers. So a part of that share gain is coming through in our sales, obviously, at a lower margin. But we do have our value-branded items as well, and as an example one of the -- couple of the items we're introducing are $0.99 recipe mix, Recipe Inspirations and value grinders, larger grinders at a competitive price. So we've got some of those offerings that we're going with.

Okay. And the other question I had was the -- I think you mentioned that the QSR business will probably stay weak in the U.S. in the first half of the year, but you have new product innovation coming there. Is there anything from your side that you can do to improve your QSR business in the U.S.? Or is that really a function of your customers getting growth again in the time segments or dayparts that are more meaningful for you?

Yes, it's a matter of the products that we supply and what our customers are featuring and driving. We are much, much better off when our customers are innovating and introducing new products or when they're driving core products that we supply. And so we're -- there's -- where we win is by winning the innovations. That's the parts that we can control. By and large, a lot of the things with that customer base is not in our control.

Your next question comes from the line of Jonathan Feeney.

Following up on the private label discussion, I was wondering if you could cite the profit mix between branded and private label, roughly, within North American consumer. Because I would have thought that, presumably, private label outperformed branded in your portfolio, and that would've driven a little bit more negative mix this quarter.

Yes, it's still -- as a percentage of our total business, it still is relatively small. We certainly have a strong share of the total market, but relative to our total portfolio, it's still a relatively small part. And it did not have an extremely big impact on the mix. Clearly, if we had skewed up more towards the core items the way we had anticipated, mix would have been more favorable than what we showed both within the U.S. consumer as a total company. But I'd say, in and of itself, it's is not the main driver.

And then, following up on -- you commented that a handful of retailers are -- I forgot what the actual, exact wording was -- a few retailers had maybe seen better private label performance in North America than others. Could you further characterize that? I mean, is there a certain kind of place or a certain line where that penetration private label is doing a little better than branded in 2013?

I wouldn't say -- by and large, private label is still a fairly low percentage of the dollar sales in the category compared to a number of other categories. What we're reacting to is that we've seen a higher level of growth. And we've seen it in a mix of value-price retailers, natural, higher-end retailers and then some popular retailers who've adopted it as a strategy. But it's still a little more than 20% of the category. It's not -- in terms of volume and dollars, it's even lower than that. So it is something we are responding to, something we are reacting to but -- and we know how to do that because where we compete in Europe and in Canada, we have typically private label more like 50%. I think the dynamic we've seen differently in 20 -- late 2012 and through 2013 is a little more fragmentation, both in terms of other competitors, as well as private label, as new products have been offered. Typically, private label have been in a fairly limited number of products and we've seen some expansion. We've seen some expansion in price points, and that's what we're responding to.

And would you say that we're totally past the effect of the buy-in now? I mean, I know it wasn't mainly Q4 to Q3, but some of these products have a reasonable shelf life.

Yes, I would expect that what happened in third quarter was an awful lot of the holiday items. We did see, through the quarter, consumption improved. And so what we didn't see in our sales were reorders that we typically get after that kind of thing happens. But yes, we think by and large, the buy-in -- and it was kind of compounded by the fact that we had a price increase at the same time, but we think that's largely done.

Your next question comes from the line of Eric Katzman.

Let me just follow up on that one. You -- how much of the price increase in the U.S. do you think limited your results as opposed to, Alan, what I think is a reasonable characterization, which is fragmentation and the company's, let's say, failure to adjust quickly enough?

I think the price increase -- this price increase had very minimal impact. It was -- it did impact that buy-in in third quarter. But by and large, by the time it got on the shelf with the consumer, it had very, very little impact and didn't impact much of the results. I will say that one of the things we are really focused on, Eric, is really improving our responsiveness and our agility and our focus. And we've already made changes in the alignment of our sales regions in the U.S. and we're continuing to simplify our operation and our business to go after volume and share gains.

And so your stock underperformed significantly last year. It's going to underperform most likely today and probably under a bit of a cloud. So when -- with this increased responsiveness and the improvement in the -- or the more spending, when should we see you start to gain back share and deal with this more complex retail landscape in the U.S?

Well, certainly...

Is it a second quarter event? If the first quarter is likely to be sluggish, when can we start to look for that?

We would expect to see improvement through the year. We're changing what we're doing right now. There is a very different dialogue that we're having with the customer. A more assertive story on category management that's happening right now. It may take some time for that to find its way into our results. But we expect through the year that we're going to see improvement in that. The guidance that we've given reflects our best outlook as to what we think is going to happen.

Okay. And then last question and I'll pass it on. Gordon, for the consolidated top line forecast, so it looks like x the pricing and x the acquisition, you're looking for, let's say, 2%, roughly 2%, 2% to 3% in the core business. And I think you said that the category is growing in most markets like 3%. I think you said you expect some pass-through in the industrial. So I'm not really getting a sense that you're assuming much of a rebound in the consumer side for the year.

Yes, as we indicated, we're at this right now, and as Alan indicated, but we are within our guidance, reflecting time for this to build and have the impact that we expect as we progress through the year. It's not an immediate turn-on that's built into that forecast. We've talked about a bit of a slower start in the U.S. So we're being cautious, but we're being certainly positive and aggressive in how we're pursuing this.

Your next question comes from the line of Alexia Howard. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: Two questions. Firstly, it looks as though there was a nice rebound in the China industrial business after the problems that you've had with YUM! Brands out there for the last year. Am I right in thinking that the rebound was above the Asia industrial 10% sales growth out there? And is that set to continue? That's the first question. And then the second question is around acquisition strategy from here. I think you alluded to a fairly target-rich environment for 2014. Where are you targeting geographically? Is this something that would be smaller bolt-on acquisitions like the ones that you've pursued in the past or could there be something larger out there? How are you thinking about that this year?

I'll take the first question on the industrial business in Asia and in China. We did see some recovery, and that's coming off some fairly weak results at the end of the year. There -- it's still, I wouldn't say, a completely robust environment. We've gained business with some local customers and are continuing to build our business there. So we have a pretty positive outlook for that business as we go into this year. I'll let Gordon talk about the acquisition activity. We've got a number of targets. And obviously, it's tough to time those, but we do have a number of targets in different parts of the world.

Yes, clearly, we continue to pursue our emerging markets strategy in that we've identified China and India and Eastern Europe as key target markets. To Alan's point, it's difficult to forecast these things because you don't know when these relationships turn into an actual process and a deal. But likewise, the bolt-ons that we continue to look at within the developed markets, we're pursuing those as well. So to the extent we find complementary businesses that we think fit quite well on our strength in flavorings and sensory and food, we'll continue to pursue those. So it's difficult to be precise because we don't know which one is going to hit first. But I can tell you we're actively engaged in finding those targets that have helped us grow over the time -- over previous years.

Your next question comes from the line of Robert Dickerson.

I guess the first question I have is kind of a follow-up, I think, of an earlier question asked. It is on price gap. So I mean it sounds like over the past 4 years or so, if you look at just stacked rates, you probably have prices up for consumer anywhere from your 10% to 15%. But we're kind of discussing how volumes are kind of -- seem soft, and the outlook for '14 seems a little soft. But at the same time, we're also seeing that pricing -- we don't think pricing is really having an impact. So I'm just -- if pricing isn't really having an impact on volumes, as we're discussing, then why is private label taking share? I mean, how does private label compete with you outside of price?

I didn't say -- I didn't actually say that pricing isn't having an impact. I said it didn't have much of an impact in the fourth quarter last year. But what we are seeing in the trends, which is a little bit of a reversal of what we're seeing earlier in the year, is that private label unit growth is a little stronger than private label dollar growth. That tells me that there's some level of discounting. Our unit growth is trailing our dollar growth in this business in the syndicated data, which tells me there's some -- there's either some mixing of...

I mean clearly, that just means that the price gap is widening, right, which is [indiscernible].

That means over the past year, the price gap has widened a little bit. And that's part of our category management story with retailers is to help them understand what the optimum price gaps and pricing levels are for their premium branded products, their core branded products, their private label products and their opening price points so that they're not sacrificing category profitability to be able to impact that. But certainly, we are very sensitive to the price gaps that we have. And we think there's been some impact in our unit volume. And that gap has changed a little bit this year.

Okay. Fair enough. And then just a simple housekeeping question. On the tax rate, the 30% to 31% projected for '14, what -- and it might be tough to kind of gauge this, but what's your level of conviction on that? I just ask because over the past 4 full fiscal years, you're at, I think starting in maybe fiscal 2009, your tax rate has come in approximately anywhere from 200 to 300 basis points below where you originally guided. And if we look at where earnings have come in, that's obviously generated a decent amount of EPS relative to where consensus would have been, let's say, 5 years ago.

Tax rates are a very difficult thing to forecast because, obviously, it's kind of the last thing on the P&L and it all relates to your assumptions surrounding business mix, tax jurisdictions, and then you're also trying to anticipate legislative impacts. And, as you know, it's a very aggressive world we live in. You're also trying to monitor and manage risk profiles as it relates to audits that are occurring all around the world constantly now. So all I can tell you is based on the information we're looking at right now and based on what we know in the legislative environment, that's our best estimate based on the mix of earnings and the forecast. Will it change? As we progress through the year and we see how our businesses perform, it certainly could change. Things that are not assumed in there, for instance, is the R&D tax credit in the U.S. We're, in that rate, not assuming that, that gets reinstituted. But if Congress passes that, that certainly could be a favorability that we didn't anticipate. But at this time, it's not passed, so our rate reflects it. It's those types of items that make it difficult to forecast. But at this stage, it's the best estimate we've got.

Okay. But I'm just asking because, I guess, as an analyst, so I think about if you come in 250 basis points below for 4 years in a row, then have you factored in, yourselves, that sensitivity over the past 4 years for next year's guidance or you're just kind of sticking with what you have? [indiscernible]

We look at our outlook for the year. And based on the mix of earnings and the legislative environment, it's an add-up of our best estimate. Clearly, in this fourth quarter, the U.S. business didn't come in as expected. So it clearly had an impact on the rate, and that was one of the factors that we experienced.

Your next question comes from the line of David Driscoll.

Two questions. The first one goes back to the pensions. I believe that you guys said that pensions would be favorable, something like, by my calculation, about an $0.08 tailwind for 2014, but that you wanted to match that up with the requirement for higher incentive comp because, I think, the 2013 incentive comp was below normal. Is that an accurate recap?

Yes. The only thing I would add is it didn't all occur in 2013. 2012 fourth quarter also. So I wouldn't say all of that rebuild occurred because of 2013. These things occur gradually over time. So year-to-year, over time, we've been below target for 2 straight years. And now we're trying to build back to target.

This is really important. So when you build back, is it a 1-year build back or is it something that's actually a headwind even in the next year? Because these kinds of things are always -- like pension was obvious on the outside that this would be a tailwind. Higher incentive comp is always less obvious. So it's always important to hear your comments. So is it a 1-year build back or is it multiyear?

Well, it's a variable component based on performance. So it kind of pays for itself depending on the performance. So if we perform really well, we could build it back in 1 year. So it'll just be a function of the variable performance of the business.

Okay. And then my final question is just -- just want to come back to this because I think this really matters. In the fourth quarter, consumer volumes, by our estimates, needed to come in like plus 4 points, so volumes need to be up 4. They come in down 3.5. So it's a 750 basis point forecasting miss. That's an enormous number. I think you guys are saying here that it's private label, it's price gaps and so forth. Alan, what I'd really like to ask is just simply that, if you went into the biggest holiday season and you go in with a price increase, and historically, you've never put a price increase in front of that holiday season, all these numbers, just because of the magnitude of them, they scream at me that what should have happened was a price decrease in order to stay competitive on these price gaps. So it's just -- it's an internal forecasting miss, not something that you couldn't handle. And maybe that's what you mean by being more nimble in the future. But I'd like to hear your response.

Yes, the price increase only, at least in the short term, only impacted the shift between quarters. What we expected is because we'd had a fairly -- with a lot of onetime issues in 2012, was a rebound from some supply issues we had and some of the demand from the Northeast, where Hurricane Sandy impacted us. And as we issued that guidance, we were seeing fairly good consumption data. What we didn't see in October and November were the sales and the reorders that we would've -- that we expected. We absolutely missed that forecast. And so that is what we are getting back at now, is not only forecasting better but executing better.

Your next question comes from the line of Andrew Lazar.

Alan, you mentioned that some of these other entries or entrants into this space are coming in, in some different areas as opposed to just the core spice and seasoning aisle. But for those that are in your core aisle, I've always thought about this space as generally being pretty set. And you obviously have a very high share of that sort of shelf set, if you will, over time. And so are they gaining access to some space that McCormick might have had at one point but lost? Or is the overall spice and seasoning space gaining some traction in shelf space in retailers, which are allowing for some of these other entrants to kind of come on-shelf? That's the first question.

Yes, there's a little bit of an expansion of space and some of these competitors are gaining some space. We've had limited losses of actual space. What's happening is a couple of years ago, the retailers were moving very much to managing SKUs and concentrating. What we're seeing, at least in our category, and I can't speak to other categories, is more fragmentation. So rather than a strategy that looked like it was going to be strong national brand, limited regional competitors and a strong private label, it looks like that what's happened over the last year, year and a half, has been more of those regional competitors gaining some traction that they have lost about 4 years ago. We're responding really aggressively to that because it's not helping the overall growth or the profitability in the category for the retailer. And that's the story we're telling.

That's helpful. And then, this is more a little out there and probably not what's needed at all, but I'll throw it out there. There have been a couple of large categories that are very different than yours, of course. But let's call it, like, liquid detergents, where Tide is going to come out with a Tide Basic, right? So folks who want the brand, really comfortable with the brand, maybe don't need quite the level of efficacy that would be with core Tide and are willing to sort of move down on that scale a little bit. But want the brand, just want to pay a little less for it. The price gaps there and the pricing is very different, I'm sure, but I'm just trying to get a sense. Do you think there's an opportunity for some additional offerings, maybe using the McCormick brand but carefully so because that can get a little sensitive? Could you also kind of come more aggressively at that lower-end consumer?

Yes, we're exploring a number of different alternatives like that. We already offer a number of different price points, but we are exploring both on the premium and on the value what the right way to respond is.

Your next question comes from the line of Eric Katzman.

I guess kind of diving onto Dave Driscoll and Andrew's points, can we go into the U.S. business in a little bit more detail because -- I mean, are we talking the bulk of the weakness was concentrated in the core spice and seasonings business or was this more broad-based? I mean, are you being outperformed in Zatarain, Lawry's, the Simply Asia business? Or is this just the Grill Mates? Or is it just core spice and seasoning mix?

No. We saw some weakness in some of our diversified businesses, and we're addressing those as well. But as you well know, the bulk of our profitability and our sales comes from the core categories, and that's where the majority of our emphasis is going to be.

And so one other question. So I mean, it seems like you're doing -- when I talk to other companies, Europe for the consumer is a disaster, continues to be. U. S., a bit better, albeit still very challenging. But you seem to almost have kind of the reverse of it. So what is it that's doing so well, relatively well in Europe versus what seems to be such a weak ending to last year for the U.S.?

Yes, our innovation platform in Europe has been more robust and more successful. Another part of the growth in Europe comes from our dessert business there, which we don't participate very much in here, but it really is down to a more successful innovation platform.

Your final question comes from the line of Mr. William Keller.

This is actually Sam Knezevic on for Bill. My question actually is either for Gordon or Alan. Has your relationship with the retailers in the U.S. changed as it relates to your ability to sell them the private label products you manufacture alongside your branded product portfolio?

I wouldn't say the relationship has changed but it is 2 separate purchases. The branded tends to be a very traditional consumer packaged goods sale. The private label offering, which is again a part of our category management story, is -- and the reason we're in that business is to help the retailer get the right mix of products to maximize sales and profits. I would say that in a lot of cases, the retailers are separating those buys and private label is more of a bid process. But our category story hasn't changed. Our relationship really hasn't changed but some retailers have been more aggressive at bidding those kinds of products as opposed to the branded businesses.

And there are no further questions at this time. I would now like to turn the conference over to Mr. Alan Wilson for any closing remarks.

I'd like to thank everybody for your questions and participating in today's call. We hope you'll be able to join us at CAGNY on February 19, whether you're there in person or by webcast, to learn more about our outlook for flavor and how we're going to capitalize on our growth. At McCormick, we have 125-year of heritage of innovation, collaboration and commitment to this business that's at the foundation of our global leadership in flavor. With a passion for flavor, we continue to drive growth and position our business for future success. Thank you.

I'd like to give my thanks to everyone on today's call. Through February 5, a replay of the call can be accessed by dialing (855) 859-2056. The conference ID number is 19671330. You can also listen to a replay on our website later today. If anyone has additional questions regarding our information today, please give us a call at (410) 771-7244. This concludes this morning's conference.

With that, this concludes today's conference. You may now disconnect.