McCormick & Co. reported positive overall results for the most recent quarter, but at the same time presented a picture of a company that is both hurt by and benefiting from the coronavirus pandemic.
McCormick posted a sales increase of 7.6% for the last quarter compared with the same quarter last year. But McCormick has a foot in both the retail and foodservice sectors, and its sales figures show what that means during the pandemic. Sales to consumers were up 26% in the quarter, but to foodservice customers, sales dropped 18%, the Wall Street Journal reports.
This portends problems for the long term. Retail sales were up due to consumers cooking more at home. The problem for McCormick is that spices, once stocked, tend not to need replenishment for a long time (although much of the May increase came in single-use marinades and rubs).
As for foodservice, which accounts for 20% of total sales, it’s suffering not only from reduced overall volume, but for the loss in business of condiments intended for tables where customers no longer sit. McCormick is trying to offset that with sales of single-serve condiments for takeout.
