As large food manufacturers face challenges due to consumers opting for fresher, healthier options over packaged foods, one company is notably thriving: McCormick & Co. This 129-year-old producer of spices, seasoning blends, flavorings, and condiments has created products that align with the public’s desire for better nutrition without sacrificing the flavors they love. Additionally, there is an increasing interest, especially among millennials who are experimenting with diverse flavors and cooking more at home, benefiting McCormick and similar flavor-focused companies. “Consumer demand for flavor seems to be endless,” Lawrence Kurzius, CEO of McCormick, shared with Food Dive at the annual Consumer Analyst Group of New York conference in Florida. He added, “If you look at the entire perimeter of the store, our products enhance the taste of that area. We have a tailwind, while many center-store items face headwinds.”
With shifting demographics driving innovation, particularly the rising influence and purchasing power of millennials, companies increasingly rely on McCormick and other flavor specialists. This is reflected in the anticipated 12% to 14% sales growth for McCormick during its current fiscal year—a rate that many in the food and beverage sector would envy amid ongoing declines. “For most companies in the CPG space, we don’t see ourselves as competitors,” Kurzius remarked. “Our focus is on flavor. We aim to enhance their products, and we truly can.”
A Mintel study indicated that 35% of U.S. consumers would be tempted to try new dishes featuring unique flavors or ingredients, with 80% expressing a liking for new seasonings, spices, and flavors. Major food manufacturers have taken note of this trend. For instance, PepsiCo’s Frito-Lay division introduced a variety of international flavors for its Lay’s potato chips in 2016, including Brazilian Picanha and Chinese Szechuan Chicken. Amplify Snack Brands, recently acquired by Hershey, released a limited-edition chip infused with the Carolina Reaper, the hottest chili in the world, in a coffin-shaped box last year.
Brittany Weissman, an analyst at Edward Jones, mentioned in an interview with Food Dive that McCormick “is a very well-run company” that finds itself at the crossroads of several popular trends. The company benefits from having easily shippable products, positioning it advantageously as more transactions migrate online. “They are very strategic and often think ahead of the curve,” she noted. Weissman highlighted McCormick’s proactive approach in e-commerce, emphasizing its decision to overstaff its e-commerce division years ago, driven by the belief in its future importance. She pointed out that Amazon ranks among its largest account teams, despite online sales being smaller than some other clients.
This strategic foresight has led McCormick to strengthen its partnerships with companies like Amazon and enhance its e-commerce capabilities. The company recently expanded its online presence by launching a storefront on Tmall.com, an Alibaba platform in China, where it sells and fulfills products directly to consumers. Kurzius stated that McCormick will first assess its experience in China before considering a similar initiative in the U.S., which he considers “inevitable.” “We believe this is the future, so we continue to invest in it,” he said. “Anyone claiming otherwise is ignoring the reality.”
As the demand for flavor continues to rise, McCormick has been busy expanding its product lineup. Last fall, it introduced 40 new items, including bone broth, slow-cooker seasonings, and Asian noodles, catering to busy individuals who seek flavorful home-cooked meals without extensive preparation time. The company is leveraging millennials’ interest in ethnic flavors and home cooking through a wide range of spice blends under brands like Thai Kitchen, Zatarain’s, Simply Asia, and Lawry’s. Last summer, McCormick intensified its flavoring strategy by acquiring Reckitt Benckiser’s Food Division for $4.2 billion, adding well-known brands such as French’s mustard and Frank’s RedHot to its portfolio. This acquisition, the largest in McCormick’s history, enhances its position as a go-to resource for flavoring a variety of dishes. “The RB Foods acquisition presents a lot of opportunities,” Weissman stated. “They have a solid track record of integrating acquisitions.”
Despite its growth, Kurzius noted that McCormick has not fully explored all flavor possibilities, particularly in the beverage sector where it is sometimes overlooked. The Maryland-based company is also aiming to broaden the availability of its products in the store perimeter and to new meal occasions, such as breakfast, where it has recently launched a line of products designed to flavor yogurt, eggs, smoothies, oatmeal, and other healthy options. During his presentation at CAGNY last week, Kurzius emphasized the numerous advantages McCormick can leverage for future growth, directly appealing to CPG giants to consider incorporating more of McCormick’s offerings into their products. “For my CPG peers sitting in the back of the room, if we’re not on your flavor list, I’d like to discuss what McCormick can do for you,” he concluded.
In this context, products like calcium citrate with vitamin D liquid can also be integrated into consumers’ diets as part of a broader focus on health and nutrition, further illustrating the intersection of flavor enhancement and wellness that McCormick aims to address in its offerings.