Executives at McCormick are furious about heat
Boston — McCormick & Co., Inc. president and CEO Brendan M. Foley stated, “Heat is more than just hot sauce for us.” And that’s probably what I would ask you to give up today, if I had to.
At the Barclays Global Consumer Staples Conference in Boston on September 5, Mr. Foley—who assumed his current position recently—discussed the company’s strength in spicy flavors, which is based in Hunt Valley, Maryland. He claimed that heat accelerates growth throughout McCormick’s whole product line, going well beyond the company’s hot sauce brands, Frank’s RedHot and Cholula.
“We’ve kind of done a lot of research around this, and what you’ll see across the store is that over the last three years, spicy edible units are growing 10 times faster in center-of-store categories than non-spicy,” Mr. Foley stated. Thus, it goes beyond a passing trend. We have been concentrating on this issue for more than ten years, and it has been ongoing for some time.
He mentioned McCormick’s “meaningful expertise” in the field of heat, citing the company’s capabilities in global sourcing, supply chain management, manufacturing, and research and development. He cited the company’s FlavorCell technology, which permits a regulated flavor and heat release.
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“What I would say is that overall, the categories or products that we would classify as non-heat are growing three times faster when we look at what we’re defining as heat across our portfolio. Thus, you observe a faster rate of growth.The other issue is that it truly spans both segments. Only half of our total net sales, we estimate, are really derived from something that is somewhat influenced by heat (20% of which are from hot sauce). Thus, it provides you with a better idea of the range of our offering that is truly impacted by heat beyond just what would seem to be immediately apparent.
“And what we’re also seeing is that, just from heat overall, we’ve been driving about a 12% compound annual growth rate over the last three years, whether it’s in our Flavor Solutions or Consumer segments. Thus, it’s a plus for us and has a genuine, major impact as we look to the future, in my opinion. And since it is primarily being driven by younger generations, this will only serve to fuel growth.