McCormick to accelerate brand investment for the Americas

McCormick is promising to increase its investments in its consumer brands after a single-digit increase in spending last fiscal year.

The maker of French’s, Frank’s RedHot, Billy Bee and Club House rebounded from its first quarter profit slump, reporting operating income of $222 million USD in Q2 compared to $157 million USD in the year-ago period. Adjusted operating income was $235 million USD, a 35% year-over-year increase.

The CPG says it expects to drive continued growth through the strength of its brands, as well as marketing, new products, category management and differentiated customer engagement plans.

In 2023, McCormick expects to grow sales by 5% to 7% compared to 2022 and it says it is capitalizing on the growing consumer interests in healthy and flavorful cooking, digital engagement, valuing trusted brands and purpose-minded practices. This, McCormick says, coupled with the breadth and reach of its portfolio and its proven strategies, positions the company to sustainably continue its growth.

“We drove meaningful year-over-year margin expansion in both the consumer and flavor solutions segments underscoring our focus on profit realization,” said Lawrence Kurzius, chairman and CEO.

Flavor solutions segment sales were up 12% for Q2, while its consumer segment increased 5% over the same period. Consumer sales in the Americas were up 3%, while consumer sales in the Asia Pacific region increased 19%.

In this morning’s earnings call, the company said “consumers still prefer brands” over private label.

Early results are “good” for its grilling portfolio, with French’s mustard and Frank’s RedHot delivering double-digit quarterly growth. The company also said it is boosting marketing for its foray into Mexican flavours, the Cholula brand.

McCormick is also promising that it will be increasing marketing investment in its gourmet seasoning product lines, highlighting farm to table product attributes. Spices and seasonings are also driving strong ecomm growth, the company said.