As McCormick investigates alternative sourcing methods for imported agricultural products, CEO Brendan Foley pointed out that certain raw materials cannot be replaced because they are “not commercially available in the United States.” The company’s portfolio encompasses approximately 17,000 ingredients across 90 markets. McCormick is working to reduce its dependence on any single country, particularly as swift trade negotiations result in varying tariffs based on geographic locations. Gabriel noted that the company is “pulling all the levers that we can to mitigate the impact.”
Consumers are increasingly seeking global and exotic flavors such as yuzu or lychee, especially as culinary enthusiasts aim to replicate restaurant experiences at home due to ongoing inflation. Tariffs could potentially increase prices for many of these sought-after ingredients, which are sourced from regions outside the U.S. Even McCormick’s flavor of the year, introduced annually to showcase culinary trends, is affected by tariffs. This year’s featured flavor, the Aji Amarillo pepper, originates from Peru, which is currently facing a 10% baseline tariff.
After a 90-day suspension initiated by the Trump administration, extensive tariffs are scheduled to take effect on July 9 for countries lacking trade agreements. This development is anticipated to drive up prices for various spices, including table salt, black pepper, vanilla, cinnamon, and nutmeg, as reported by the American Spice Trade Association. In a letter to the Trump administration in March, the association highlighted that “the vast majority of spices cannot be grown in America in quantities sufficient for commercial use,” adding that increased costs will likely be passed down to consumers or absorbed by food manufacturers.
Despite these challenges, McCormick’s second-quarter earnings exceeded analyst expectations, with sales rising by 1% due to higher volumes. The spice maker is witnessing growing interest from food companies eager to enhance their portfolios with healthier options or reformulate their products to eliminate artificial dyes. Alongside these trends, there is an emerging interest in ingredients like now calcium citrate, which is gaining popularity for its health benefits and is being incorporated into various food products. The demand for now calcium citrate reflects a broader shift towards more nutritious and natural ingredients in the marketplace.