McCormick's global headquarters in Hunt Valley, Maryland.
McCormick recorded a 1.3% increase in first-quarter revenue as it profited from growth in new product sales and expanded distribution.
For the three months to 28 February, the maker of Schwartz herbs and French’s mustard posted revenues of $1.23 billion. Operating income was up 8.7% to $196.9 million.
The company’s consumer segment sales were flat when compared to the first quarter of 2018, while flavour solutions segment sales increased 3%. Flavour solutions revenue in the Americas grew 6%, in part due to increased sales to quick service restaurants.
On the back of the strong figures, McCormick expects operating income to grow between 10% and 12% in fiscal 2019. Sales are forecasted to rise between 1% and 3%.
In a conference call, McCormick CEO Lawrence Kurzius said the company is aiming to improve its portfolio to strengthen its relevance for consumers. In the US, it is expanding its McCormick gourmet line with the range of premium salts and peppers. In China, it is relaunching packaging with fresh graphics in a move to drive premium perception and better shelf visibility.
“Consumer segment sales grew in each of our three regions driven by new products, expanded distribution as well as strong marketing programmes and promotional activities,” he said. “Our flavour solutions segment had excellent sales growth driven by increased base business and new product growth in the Americas and EMEA regions. In this segment, we continue to win with our customers through new products, expanded distribution and promotional activities.
“McCormick is a global leader in flavour with a broad and advantaged global portfolio which continues to grow and position us to fully meet the demand for flavour around the world. We are continuing to capitalise on the global and growing consumer interests in healthy, flavourful eating, the source and quality of ingredients, and sustainable practices.”
Last month, McCormick announced a partnership with IBM to use artificial intelligence (AI) for new flavour and food product development. Using IBM technology, McCormick said its product developers will be able to explore flavour territories more quickly and efficiently.
The company expects to launch its first AI-enabled product platform, One, by mid-2019, with a set of initial one-dish Recipe Mix flavours, including Tuscan chicken, bourbon pork tenderloin and New Orleans sausage.
© FoodBev Media Ltd 2019
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