McCormick CEO Says Supply Chain Issues Limit Spice Maker
CEO of McCormick & Company Laurent Kurzius On Monday told CNBC that logistical complications from the pandemic are calling into question the spice maker’s ability to meet “incredible” demand for its products.
“Right now, across our business, the supply chain is really our limiting factor. Demand is extraordinarily high for all of our products, both from the consumer side… but also for our flavor solutions and flavor systems, ”Kurzius said in an interview on“ Mad Money ”.
In addition to its well-known spice jars, McCormick also makes Old Bay seasonings, French mustard, and hot sauces such as Cholula and Frank’s Red Hot.
“The transportation and logistics issues, just getting the product from point A to point B, is our only limiting factor,” said Kurzius. “It’s not the demand. The demand is incredible.”
Kurzius’ comments come days after McCormick released third quarter results that beat Wall Street estimates in terms of earnings per share and revenue. However, the company lowered its annual adjusted earnings per share forecast as it grapples with supply chain challenges and pricing pressures.
“We are seeing unprecedented inflation, as is the whole industry right now,” Kurzius told host Jim Cramer on Monday. “We’re going to have to manage our way through this period of cost inflation, as we have done in the past. It will unfortunately be a mixture of price increases, and also profitability thanks to our [comprehensive continuous improvement] program.”
McCormick shares closed flat Monday at $ 80.69 on an otherwise low day for Wall Street. The company’s shares have fallen more than 15% since the start of the year.