Dive Brief:

• McCormick has investments underway to expand “capacity and capabilities” across several of its product categories, a company spokesperson told Supply Chain Dive.
• The food company is boosting production for its Frank’s RedHot brand by adding capacity in the Springfield, Missouri plant and capabilities in the South Bend, Indiana plant. 
• McCormick recently opened a Flavor Solutions manufacturing facility in Peterborough, England and is working to expand its Flavors of North America footprint, the spokesperson said. 

Dive Insight:

McCormick, which over the past several years has acquired its way into more markets by snatching up Flavors of North America, Cholula and Frank’s RedHot, is attempting to match a surge in consumer demand.

“Demand has remained high, and we are realizing the benefit of the manufacturing capacity we added as well as our increased resilience,” CEO Lawrence Kurzius said in a June Q2 earnings call.

Companies often need to adjust their capacity when demand grows, a tactic that is not new for McCormick. In 2020, the company transitioned all of its factories to 24-hour operations to handle the increased demand that came from a rise in home cooking.

Still, supply chain issues continue to weigh on McCormick.

“Our supply chain is being pressured to meet this demand and we are still taking on some extraordinary costs to service our customers,” Kurzius said. 

The pressures are coming from higher material and transportation costs. According to a company spokesperson, McCormick is facing higher fuel, ocean and ground freight costs, limited transportation capacity and shortages of "glass items for organic spices.”

“We're not out of the woods by a long shot in terms of normalization,” Kurzius said. “But the really broad scale disruptions that we were experiencing a year ago are behind us and the disruptions are pretty much more discrete factors.”