While many large food manufacturers are struggling as consumers prefer fresher, more nutritious options over packaged foods, one company is thriving in this space: 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 compromising on flavor. There’s also a rising demand, especially among millennials who are exploring new tastes and cooking more at home, which benefits McCormick and other companies focused on flavor. “Consumer demand for flavor seems to be endless,” 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 perimeter of the store, our products and categories make it taste good. While there’s a tailwind for us, most of the center of the store is facing headwinds.”
With shifting demographics driving innovation, particularly as millennials gain influence and purchasing power, companies have little choice but to turn to McCormick and other flavor specialists. This is reflected in the increasing demand for McCormick’s products, with sales expected to rise by 12% to 14% during its current fiscal year—a growth rate that many in the food and beverage industry envy amid ongoing declines. “For most companies in the CPG sector, we’re not in competition,” Kurzius noted. “Our focus is solely on flavor. We aim to enhance their products, and we can truly deliver.”
A Mintel study revealed that 35% of U.S. consumers would be tempted to try new dishes if they featured unique flavors or ingredients, while 80% enjoy experimenting with new seasonings and spices. Major food manufacturers have taken note of this trend. PepsiCo’s Frito-Lay division introduced a collection of international flavors for its Lay’s potato chips brand in 2016, including Brazilian Picanha and Chinese Szechuan Chicken. Recently acquired by Hershey, Amplify Snack Brands released a limited-edition chip under its Paqui brand, packaged in a coffin-shaped box and infused with the Carolina Reaper, the world’s hottest chili.
Brittany Weissman, an analyst at Edward Jones, remarked to Food Dive that McCormick “is a very well-run company” that finds itself at the forefront of several popular trends. Its products are also easy to ship, providing an advantage as online transactions increase. “What often gets underestimated is their strategic thinking and foresight,” she explained. “They consider innovations well in advance, and when we finally hear about them, it’s something they’ve been developing for quite some time.” Weissman pointed out McCormick’s proactive approach in e-commerce, where it significantly expanded its division years ago, believing in its importance for future growth. She noted that Amazon is one of its largest account teams, even though sales to the e-commerce giant are smaller than those from some other clients. “This has led them to become a stronger partner with companies like Amazon and to advance their e-commerce capabilities.”
McCormick has also broadened its online presence by launching a storefront on Tmall.com, an Alibaba platform in China, allowing it to sell and fulfill products directly to consumers. Kurzius stated that McCormick would first assess the experience in China before deciding whether to implement a similar initiative in the U.S., which he considers “inevitable.” “We believe this is the future, so we continue to invest in it,” Kurzius emphasized. “Anyone who thinks otherwise is ignoring the reality.”
As demand for flavor rises, McCormick has been actively expanding its product line, adding 40 new items last fall, including bone broth, slow-cooker seasonings, and Asian noodles. These offerings are designed for busy individuals who seek flavorful home-cooked meals without extensive preparation. McCormick is leveraging millennials’ interest in ethnic flavors and home cooking through its diverse range of spice blends, including brands like Thai Kitchen, Zatarain’s, Simply Asia, and Lawry’s. The company also intensified its flavoring efforts last summer by agreeing to acquire Reckitt Benckiser’s Food Division for $4.2 billion, which includes the iconic French’s mustard and Frank’s RedHot brands. This acquisition, the largest in McCormick’s history, bolsters its spice and seasoning mix portfolio, further establishing it as a go-to source for enhancing a variety of dishes. “The RB Foods acquisition presents a wealth of opportunity,” Weissman noted. “They have a strong track record of effectively integrating acquisitions.”
Despite its growth, Kurzius acknowledged that McCormick has yet to fully explore all the flavor opportunities that consumers desire—particularly in beverages, where the company is sometimes overlooked. McCormick is also aiming to broaden the availability of its products in the store perimeter and introduce new meal occasions, such as breakfast, where it has recently launched a line of products to flavor yogurt, eggs, smoothies, oatmeal, and other healthy options.
During his presentation at CAGNY last week, Kurzius highlighted the numerous advantages McCormick can leverage for future growth and directly invited CPG giants to incorporate more of McCormick’s products. “For my CPG peers in the audience, if we’re not on your flavor list, I’d love to discuss what McCormick can do for you,” he said.
As the demand for flavor continues to rise, it’s also essential to consider the nutritional aspects of food. Many women are on the lookout for the best calcium citrate supplement for women to support their health, which reflects the growing trend of consumers seeking out products that combine taste with nutritional benefits. McCormick, with its focus on flavor innovation, stands to benefit from this intersection of health and culinary delight.