Dive Brief:
- McCormick's financial results for the second quarter of 2017 beat analyst expectations, with sales rising 5% to $1.11 billion for the three months that ended May 31, according to a company release.
- The spice and flavorings maker saw profit jump to $100 million, compared to $93.8 million in the year-ago period.
- "We are continuing to capitalize on the global and growing consumer interest in healthy, flavorful eating, the source and quality of ingredients, and sustainable and socially responsible practices," Lawrence E. Kurzius, McCormick chairman, president and CEO said in a company statement.
Dive Insight:
McCormick's portfolio — spanning a mix of 250 U.S. and international brands — and its partnerships with leading packaged food companies and multi-national restaurants has helped the spice maker drive consistent growth. The company has also benefited from increased demand for spices, herbs and seasonings as consumers seek authentic cultural flavors in their everyday diets. Recently, McCormick has bolstered its range of regional flavors by acquiring Gourmet Garden, Cajun Injector and Italian flavor manufacturer Enrico Giotti, which also helped sales.
These plays reflect CEO Lawrence E. Kurzuis's growth strategy, which centers on targeting businesses where "flavor and health interstect."
"We are aligned with the increased demand for great taste and healthy eating and are confident in our plans to drive growth through new products across both of our segments, through our strong brand marketing programs, and with our opportunities to expand distribution," Kurzius said in the company's earnings report.
The company has capitalized on consumer desire for clean, healthy flavorings by expanding its line of gluten-free, non-GMO and other organic products. New product offerings have seen strong sales growth in the U.S., but challenges in the European, African and Middle Eastern markets persist, Kurzius said.
McCormick has also made significant investments in environmental sustainability, a top consumer concern. By providing employees with tools to improve efficiency and and reduce water, waste and energy, the company decreased its carbon footprint by 43% — earning the title of No. 1 food company in Corporate Knights' Most Sustainable Corporations Index.
McCormick stated that it's also on track to hit nearly $100 million in cost savings as part of its comprehensive continuous improvement program, implemented to boost sales and lower costs.