McCormick's Old Bay Seasoning appears to be the continued flavor of choice for home chefs amid the COVID-19 pandemic.
"Oh my gosh, the demand for Old Bay has been extraordinary, and we've been hard-pressed to keep up with it. And even now, it's one of those items that we are still struggling with to keep in stock. The demand is just high for favorites like that," McCormick Chairman and CEO Lawrence Kurzius tells Yahoo Finance Live.
Kurzius says McCormick (MKC) is working hard to bring back supplies of products it decided to cut at the height of the pandemic in 2020, when it focused on getting its top-selling items such as Old Bay seasoning to grocery-hoarding customers.
"We hired 1,400 additional people mostly in our supply chain and we have added roughly the equivalent of an entire new factory by changing shift patterns and bringing in human resources. And so today, we are finally beyond the worst of the allocation time, and are rapidly closing in on the remaining 50% of all the items that we had on suspension. You should see that shelf position really accelerate," Kurzius explained.
Despite people beginning to venture outside post vaccination, McCormick hasn't seen a drop off in business at its key consumer solutions segment. First quarter sales for the segment surged 35% from the prior year on the back of demand for spices, French’s mustard and Frank’s Red Hot sauce.
"Demand from consumers has really been strong through the entire pandemic, and really still is," Kurzius says.
Meanwhile, the flavor solutions segment — which supplies products to restaurants — remained under pressure in the quarter. Sales for the segment only rose 4% from a year ago.
For 2021, McCormick sees sales up 8% to 10%. Earnings are pegged at 5% to 7% growth from last year.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
What’s hot from Sozzi:
Kansas City Chiefs phenom Patrick Mahomes: I am trying to build a business empire
Foot Locker CEO: this is what our future holds
Intel's new CEO: why I am investing $20 billion in our future
Rocket Companies CEO: why rising rates won't slow housing boom
AutoNation CEO: we have no plans to accept bitcoin like Tesla
NBA great Ray Allen: how the country could come together post Trump
Grammy award winner Ciara: here is my hope for the country
Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, and LinkedIn.
Source: Read Full Article