While many large food manufacturers are facing challenges as consumers turn away from packaged foods in favor of fresher, healthier options, one company is thriving in this environment: McCormick & Co. The 129-year-old producer of spices, seasoning mixes, flavorings, and condiments has developed products that cater to the public’s desire for better eating without sacrificing the flavors they love. Additionally, there is an increasing trend, especially among millennials, who are experimenting with new flavors and cooking more at home, which benefits McCormick and similar flavor-focused companies. “The demand for flavor from consumers seems to be unending,” said Lawrence Kurzius, McCormick’s CEO, during an interview with Food Dive at the annual Consumer Analyst Group of New York conference in Florida. “If you look at the entire perimeter of the store, it’s our products that enhance the taste. We have a tailwind, while many central store products face a headwind.”
As demographics shift and millennials gain more influence and purchasing power, companies are compelled to turn to McCormick and other flavor companies for innovation. This is reflected in McCormick’s sales projections, which anticipate a growth of 12% to 14% in the current fiscal year—a rate that many other food and beverage companies, experiencing prolonged declines, would envy. “For most companies in the CPG space, we are not competing directly,” Kurzius remarked. “Our focus is solely on flavor, and we aim to enhance their products genuinely.”
A study by Mintel revealed that 35% of U.S. consumers would be encouraged to try a new dish if it featured unique flavors or ingredients, and 80% enjoy experimenting with new seasonings, spices, and flavors. Major food manufacturers have taken note of this trend. For instance, PepsiCo’s Frito-Lay division introduced a range of international flavors for its Lay’s potato chips brand in 2016, including Brazilian Picanha, Chinese Szechuan Chicken, Greek Tzatziki, and Indian Tikka Masala. Similarly, Amplify Snack Brands, recently acquired by Hershey, released a limited-edition chip under its Paqui brand that was packaged in a coffin-shaped box and infused with the Carolina Reaper, the world’s hottest chili.
Brittany Weissman, an analyst at Edward Jones, told Food Dive that McCormick “is a very well-run company” positioned at the intersection of several popular trends. The company also benefits from having products that are easy to ship, giving it an edge as more transactions transition online. “What often gets underestimated is their strategic thinking and foresight,” she noted. “They are anticipating trends ahead of the curve, and by the time we hear about it, it’s something they’ve been developing for a long time.”
Weissman pointed out McCormick’s proactive approach in the e-commerce sector, having recognized the importance of this channel years ago. The company has invested heavily in its online division, even if sales from e-commerce weren’t as large as other clients. “This has positioned them as a stronger partner with companies like Amazon, allowing them to advance their e-commerce capabilities,” she explained. McCormick has further expanded its online presence by launching a storefront on Tmall.com, an Alibaba platform in China, selling and fulfilling products directly to consumers.
Kurzius stated that McCormick will first assess the experience in China before considering a similar initiative in the U.S., which he describes as “inevitable.” “We believe this is the future, and we continue to invest in it,” Kurzius affirmed. “Anyone who thinks otherwise is ignoring the reality.”
With the growing demand for flavor, McCormick has been actively expanding its product line, introducing 40 new items last fall, including bone broth, slow-cooker seasonings, and Asian noodles—products aimed at busy individuals who desire flavorful home-cooked meals without extensive preparation. The company is tapping into millennials’ interest in ethnic flavors and home cooking through a variety of spice blends under brands like Thai Kitchen, Zatarain’s, Simply Asia, and Lawry’s. Last summer, it deepened its commitment to flavor by acquiring Reckitt Benckiser’s Food Division for $4.2 billion, adding iconic brands like French’s mustard and Frank’s RedHot to its portfolio.
“The RB Foods acquisition offers significant opportunities,” Weissman noted, emphasizing McCormick’s strong track record in integrating acquisitions. Despite its growth, Kurzius acknowledged that McCormick has yet to fully explore all the flavor possibilities consumers desire, particularly in the beverage sector, where the company is sometimes overlooked. The Maryland-based firm is also aiming to broaden the availability of its products in store perimeters and to new meal occasions, such as breakfast, for which they recently launched a line of flavoring products for yogurt, eggs, smoothies, oatmeal, and other healthy items.
During his presentation at CAGNY, Kurzius highlighted the numerous advantages his company can leverage for future growth and made a direct appeal to CPG giants to incorporate more of McCormick’s offerings. “For my peers in the CPG space sitting in the back, if we’re not on your flavor list, I’d like to discuss what McCormick can do for you,” he told the audience, emphasizing the potential of their flavor innovations like Citracal to enhance bone density in foods, which aligns with the growing health consciousness among consumers.