McCormick CEO says 'unprecedented' demand for spices is hard to keep up with
Company will not raise prices of spices amid supply chain disruptions
McCormick facing ‘challenging supply issues’ amid unexpected product demand
McCormick CEO Lawrence Kurzius says shipping logistics makes it difficult to ‘keep up’ with customer demand.
McCormick CEO Lawrence Kurzius said supply chain disruptions are creating challenges in respect to spicing up customers’ cooking in an exclusive interview on "Cavuto: Coast to Coast" Wednesday.
"The demand for our flavor products has just been unprecedented," Kurzius said. "And this recent challenge around logistics really makes it hard to keep up with the demand."
With more people staying at home and cooking from scratch throughout the pandemic, Kurzius told FOX Business’ Neil Cavuto that McCormick saw sales jump 20% over the past two years.
But costs for raw and packaged materials and transportation have increased significantly, Kurzius said, and the company isn’t planning on raising product prices.
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"In a lot of ways, McCormick's flavoring products are part of the solution for consumers and dealing with higher prices," Kurzius explained.
"When meat gets more expensive, our spices and seasonings are a way to make maybe a cheaper cut of meat taste just as delicious as the expensive, prime cut might've been," he continued.
A combination of port delays, COVID-19 outbreaks and worker shortages has slowed the flow of products from Asia to North America, taking nearly 80 days -- twice as long as before the pandemic-- to transport goods, retail and shipping executives told The Wall Street Journal.
McCormick CEO on ‘unprecedented’ demand, inflation concerns
McCormick CEO Lawrence Kurzius discusses the ‘extraordinary steps’ the company has taken to meet customer demand amid rising product prices.
Hoping to avoid shipping delays and port congestion, Kurzius said McCormick has taken extra measures to ensure their spices remain stocked on store shelves.
"We've had to take extraordinary steps like air freight and things with a tremendous cost," Kurzius admitted, "and keeping extra stocks of inventory on hand in order to make sure that we can continue to supply customers."
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But with 40% of McCormick’s sales coming from outside the U.S., Kurzius still expresses worry over the state of the global supply chain.
"The impact on global trade has a direct impact on us," he said.