Americas leave bad taste in McCormick's mouth

McCormick & Co is vowing to accelerate innovation, increase marketing support and be a more effective category leader with trading partners after sales declined 5% in the spice and flavoring company’s America’s region.

Total sales at the company increased 3.5% to slightly more than $1 billion during the company’s second quarter ended May 31. Overall sales in the company’s consumer division increased 4%, despite the sales decline in the Americas region, to $615 million. Sales in the company’s industrial division increased 2%, but also faced a headwind in the Americas where sales declined 2% due to weak demand from quick service restaurants.

Despite weakness in the Americas and an increased competitive climate, McCormick affirmed its full year sales and earnings expectations as global demand for flavorings continues to expand, according to chairman, president and CEO Alan Wilson.

“In the second half, we are expanding our product offerings with new skillet sauces, gluten-free recipe mixes, premium herbs and other items,” Wilson said. “We also plan an increase in marketing support to build our brand equity and drive sales. We are fueling this growth with our Comprehensive Continuous Improvement (CCI) program.”

The company plans to spend at least $25 million in increased brand marketing support during the fiscal year to drive sales of new products as well as core items. These investments, in brand building and innovation, are funded in part by savings generated by the CCI program, according to the company.