Home-Cooking Trend Helps McCormick
More evidence that companies focused on home-cooking are profiting from the recession (or whatever it is): McCormick, the king of spices, posted better-than-expected earnings on Thursday.
As more people cook at home, of course, they buy more spices. McCormick has been able to swallow up a competitor (Lawry’s), boost marketing spending, and even pass along higher costs to consumers in its third quarter even as its net increased by 20.8 percent, to $68.6 million. Income rose by 9.5 percent when adjusted for special items. Sales were up 9.1 percent.
CEO Alan Wilson told analysts during a conference call that McCormick has boosted marketing spending by 30 percent. Thanks in large part to economic conditions, that investment is already yielding benefits. Even the Lawry’s acquisition, completed during the quarter, is already adding to the bottom line.
McCormick also sells a lot of seasonings to the fast-food business, which Wilson noted is also adding to profits. Although people are avoiding sit-down restaurants, they are still flocking to lower-priced fast-food outlets.
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