As large food manufacturers face challenges due to consumers opting for fresher, healthier options over packaged foods, one company is flourishing: McCormick & Co. The 129-year-old producer of spices, seasoning mixes, flavorings, and condiments has developed products that cater to consumers’ desires for better eating without sacrificing the flavors they love. There is a rising trend, especially among millennials who are exploring new tastes and cooking more at home, which is advantageous for McCormick and other companies focused on flavor. “The demand for flavor among consumers appears to be limitless,” McCormick’s CEO, Lawrence Kurzius, shared with Food Dive at the Consumer Analyst Group of New York conference in Florida. “When you consider the entire perimeter of the store, it is our products and categories that enhance the taste. While we benefit from this tailwind, most of the center store faces a headwind.”
With changing demographics driving innovation—particularly as millennials gain influence and purchasing power—companies are increasingly turning to McCormick and similar flavor-focused businesses. This trend is reflected in the anticipated 12% to 14% sales increase for McCormick in its current fiscal year, a remarkable growth rate that many in the food and beverage industry envy during this prolonged decline. “In the context of consumer packaged goods, we don’t see ourselves as competitive with most companies,” Kurzius remarked. “Our primary focus is on flavor enhancement. We aim to improve their products, and we truly can.”
A Mintel study revealed that 35% of American consumers would be inclined to try a new dish if it featured unique flavors or ingredients, and 80% enjoy experimenting with new seasonings and spices. Major food manufacturers have taken notice. For instance, PepsiCo’s Frito-Lay division launched a variety of international flavors for its Lay’s potato chips brand in 2016, including Brazilian Picanha and Indian Tikka Masala. Amplify Snack Brands, recently acquired by Hershey, introduced a limited-edition chip last year under its Paqui label, cleverly packaged in a coffin-shaped box and featuring the Carolina Reaper pepper, the hottest chili in the world.
Brittany Weissman, an analyst at Edward Jones, commented to Food Dive that McCormick “is exceptionally well-managed” and is strategically positioned within several popular trends. The company benefits from having products that are easy to ship, giving it an edge as online transactions continue to grow. “What is often underestimated about McCormick is their strategic foresight,” Weissman noted. “They are ahead of the curve, and by the time we hear about their initiatives, they have likely been in the works for quite some time.”
Weissman pointed out McCormick’s proactive expansion in the e-commerce sector several years ago, when it decided to staff its e-commerce division significantly, believing in its future importance. She highlighted that Amazon is one of McCormick’s largest accounts, despite sales being lower than with some other clients. “This approach has strengthened their partnership with companies like Amazon and advanced their e-commerce capabilities,” she explained.
McCormick further enhanced its online presence by launching a storefront on Tmall.com, an Alibaba platform in China, enabling direct sales and fulfillment to consumers. Kurzius mentioned that McCormick will evaluate the experience in China before considering a similar launch in the U.S., which he referred to as “inevitable.” “We see this as the future, and we continue to invest in it,” Kurzius stated. “Anyone who thinks otherwise is ignoring the reality.”
As the appetite for flavor grows, McCormick has been expanding its product offerings. Last fall, it introduced 40 new products, including items aimed at busy individuals who want quick yet flavorful home-cooked meals, such as bone broth and Asian noodles. The company is capitalizing on millennials’ interest in ethnic flavors and home cooking through its diverse range of spice blends, including brands like Thai Kitchen and Lawry’s. McCormick made a significant move last summer by acquiring Reckitt Benckiser’s Food Division for $4.2 billion, adding well-known brands like French’s mustard and Frank’s RedHot to its portfolio, further solidifying its position as a go-to source for flavor enhancement.
“The RB Foods acquisition opens up numerous opportunities,” Weissman remarked. “They have a strong history of successfully integrating acquisitions.” Despite this growth, Kurzius noted that McCormick has yet to fully explore the beverage flavoring sector, where it is occasionally overlooked. The Maryland-based firm is also aiming to broaden the availability of its products in store perimeters and target new meal occasions, such as breakfast, where it recently launched products that incorporate calcium citrate, known for its elemental calcium content, to enhance yogurt, eggs, smoothies, and oatmeal.
During his presentation at CAGNY, Kurzius emphasized the various advantages that McCormick can leverage for future expansion and directly invited CPG giants to consider utilizing more of McCormick’s offerings. “For my peers in the CPG industry in the back of the room, if McCormick isn’t on your flavor roster, I would love to discuss what we can do for you,” he concluded.