McCormick & Co. posted higher sales but lower profit for its third fiscal quarter – a situation it intends to address in part by reducing reliance on co-packers.
McCormick’s sales for the quarter stood at $1.57 billion, a 3% increase over the same period last year. When currency fluctuations are accounted for, this becomes a 6.1% increase, the company says. However, adjusted operating income was 238.6 billion, a 12% drop.
Company officials attributed much of the problem to supply-chain difficulties. Specifically, McCormick has a long-term goal of reducing reliance on co-manufacturers, CEO Lawrence Kurzius said during an earnings call.
“Some of our actions include investing to increase both manufacturing capacity and reliability in bottleneck areas to enable better customer service and repatriation of production from excessive use of co-packers,” Kurzius said.
The best results came from McCormick’s Flavor Solutions segment, which furnishes ingredients for industrial processing, with a net sales gain of 6.4%. The consumer segment came in with a net sales increase of only 0.7%.
About the Author
Pan Demetrakakes
Senior Editor
Pan has written about the food and beverage industry for more than 25 years. His areas of coverage have included formulations, processing, packaging, marketing and retailing. Pan worked for Food Processing Magazine for six years in the 1990s, where he was operations editor (his current role), touring dozens of food plants of every description. He has also worked for Packaging and Food & Beverage Packaging magazines, the latter as chief editor, during which he won three ASBPE awards. He is a graduate of Stanford University with a BA in communications.