BOSTON — The recent acquisition of Frank’s RedHot sauce, a condiment with a cult-like following, is expected to further strengthen McCormick & Co.’s bond with millennial consumers, said Lawrence E. Kurzius, chairman, president and chief executive officer.
|Lawrence E. Kurzius, chairman, president and c.e.o. of McCormick & Co.|
“Household penetration of McCormick brand among U.S. millennials is higher than for any other age group and is growing at twice the rate for spices and seasonings of the category,” Mr. Kurzius said during a Sept. 5 presentation at the Barclays Global Consumer Staples Conference in Boston. “Millennials make up a third of the traffic on mccormick.com. We hold the leading share with this generation, with 80% of them viewing McCormick spices as the best or one of the best.”
McCormick & Co., Inc. on Aug. 17 completed its acquisition of the food business of the Reckitt Benckiser Group, Parsippany, N.J. The $4.2 billion deal was announced on July 18 and includes the Frank’s RedHot, French’s mustard and Cattlemen’s barbecue sauce brands.
“Frank's RedHot is the No. 1 brand in the U.S. and Canada and is approximately twice the market share of the next largest competitor,” Mr. Kurzius said. “The global hot sauce category is approximately 3x the U.S. market size, and we plan to make Frank's the No. 1 hot sauce globally…
“And similar to our core herb and spice portfolio, consumer data shows that millennials over-index their purchases of hot sauce. And similar to the cult-like following of our Old Bay brand, Frank’s RedHot enthusiasts are deeply passionate about the brand.”
McCormick is targeting millennials through product renovation in its core spices and seasonings line, too. The company is introducing smaller package formats to drive experimentation among these consumers, whose “motivation to cook is very strong, yet their know-how can limit their exploration,” Mr. Kurzius said. McCormick also is transitioning more of its products to organic or non-G.M.O. in anticipation of consumer demands, he said.
“We’re excited to be converting our iconic black pepper and Old Bay tins to a fully recyclable, high-quality, BPA-free plastic can with an advanced freshness seal,” Mr. Kurzius added.
E-commerce represents another significant growth opportunity for McCormick, which in the recent quarter saw the channel’s sales grow at a high double-digit rate, Mr. Kurzius said. Executives expect sales through e-commerce to represent a third of the company’s growth by 2020.
“To support this, we continue to add more resources to enhance digital and social content; establish sponsorships and programs with key e-commerce retailers; and develop dedicated innovation, packaging and products,” Mr. Kurzius said.
McCormick is well positioned to capitalize on both traditional trends and evolving consumer values, he said.“The food industry is operating in a period of rapid and fundamental change,” Mr. Kurzius said. “Most food companies built businesses to address a traditional set of consumer values, namely taste, price and convenience. While taste remains No. 1, consumers’ purchase decisions are being significantly influenced by a series of emerging drivers.”