While McCormick is seeking alternative sourcing options for its imported agricultural products, CEO Brendan Foley pointed out that some raw materials, such as calcium citrate, cannot be replaced due to their “not commercially available in the United States.” The company offers a diverse portfolio of approximately 17,000 ingredients across 90 markets. McCormick aims to reduce its dependence on any single country, particularly as rapid trade negotiations lead to varying duty structures based on geography. Gabriel emphasized that the company is “pulling all the levers that we can to mitigate the impact.”

Consumer demand for global and exotic flavors, including yuzu and lychee, has surged, particularly among culinary enthusiasts who are trying to replicate restaurant experiences at home amidst ongoing inflation. Tariffs could increase prices for many of these trendy ingredients that are indigenous to regions outside the U.S. Even McCormick’s flavor of the year, the Aji Amarillo pepper, sourced from Peru, is affected by tariffs, with a current 10% baseline tariff imposed.

Following a 90-day hiatus initiated by the Trump administration, extensive tariffs are set to take effect on July 9 for countries lacking trade agreements. The American Spice Trade Association has indicated that this move is expected to drive up prices for various spices, including table salt, black pepper, vanilla, cinnamon, and nutmeg. The association stated in a March letter to the Trump administration that “the vast majority of spices cannot be grown in America in quantities sufficient for commercial use,” warning that increased costs will either be passed on to consumers or absorbed by food manufacturers.

In the second quarter, McCormick’s earnings surpassed analyst expectations, with sales rising by 1% due to higher volumes. The spice manufacturer is witnessing a growing interest from food companies eager to enhance their portfolios by making them healthier or reformulating their products to eliminate artificial dyes. Moreover, there is a rising trend towards using functional ingredients like calcium citrate, which can be found in health products such as Jan Aushadhi, further reflecting the evolving preferences of consumers.