Food Business News - July 10, 2018 - 18
MCCORMICK & CO.
SPARKS, MD. - McCormick & Co. put up
double-digit sales growth numbers in
the second quarter thanks to the "early
innings" of two recently acquired brands
- Frank's RedHot and French's. Planned
promotional campaigns in the second
half of the year are designed to keep sales
going strong for the two brands.
Sparks-based McCormick & Co.
registered net sales of $1,327.3 million in the
quarter ended May 31, which was up 19%
from $1,114.3 million in the previous year's
second quarter. Sales from the Frank's
RedHot and French's brands added 13% to
the increase. Net income of $123.3 million,
or 94c per share on the common stock, was
up 23% from $100 million, or 80c per share,
in the previous year's second quarter.
"We are really in the early innings
of the improvement in distribution on
French's and Frank's," said Lawrence E.
Kurzius, chairman, president and chief
executive officer, in a June 28 earnings
call. "They were tremendously 'under-s.k.u.ed' and under-shelved, and
the progress that we've made, while it is
meaningful and we're going to see (that)
in the numbers in the second half, there's
a lot more to be had there."
McCormick & Co. completed its acquisition of Reckitt Benckiser's food division
from Reckitt Benckiser Group in August
2017. The acquisition included the Frank's
RedHot, French's and Cattlemen's brands.
McCormick & Co. provides more category
management capability for the brands than
their previous owner, Mr. Kurzius said.
"In their core categories, they've got
tremendous capability, but this was not
one of their core categories," he said of
Reckitt Benckiser. "They regarded this as
an off-strategy business, and so it didn't
McCormick & Co. will
advertise the Frank's
RedHot brand in the
U.S. for the first time
in seven years.
MCCORMICK & CO.
McCormick & Co. acquisitions
cutting the mustard
get the resources that other brands in
that company got."
McCormick & Co. in the third
quarter will launch the first dedicated
mustard campaign for French's in the
United States in three years, Mr. Kurzius
said. McCormick & Co.'s culinary team
also has created 100 new recipes that feature mustard. The company will promote
the recipes through digital platforms,
including 15 how-to videos.
"We are seeing success in our initial
category management efforts," Mr.
Kurzius said. "We are convincing retailers
to remove duplicative secondary (mustard) brands as they work to maximize
the efficiency of their shelf space. Our
analyses have been well received, and
retailers, including several large ones, are
beginning to implement our recommendations, eliminating lower-ranking yellow
mustard brands and expanding the share
of shelf for French's and their store brand."
A U.S. national television ad for
Frank's RedHot will run in the United
States for the first time in seven years, he
said. Frank's RedHot in the second quarter
benefited from a "fix-the-mix" initiative
that focused on having the right assortment of flavors on shelf to drive velocity.
The original RedHot variety gained U.S.
total distribution points by 7% in the
quarter while the Buffalo variety gained
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Food Business News
July 10, 2018
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