HUNT VALLEY, MD. — McCormick & Co., Inc.’s momentum in the hot sauce category is heating up thanks to the November 2020 acquisition of Cholula.
Acquired from private equity firm L Catterton, Greenwich, Conn., for $800 million, Cholula offers authentic, bold and spicy Mexican flavors that have increased McCormick’s breadth and reach in the hot sauce category, said Lawrence E. Kurzius, president and chief executive officer of McCormick.
Speaking to participants during a June 9 presentation at the virtual Deutsche Bank dbAccess Global Consumer Conference, Mr. Kurzius said McCormick over the past six months has been able to leverage its operational expertise and infrastructure and expanding channel penetration to drive Cholula’s growth in both its Consumer segment and Flavor Solutions segment.
“In our Consumer segment, where Cholula continues to outpace category growth, we're using our category management expertise to expand distribution points, optimizing shelf assortment and placement and gain momentum in e-commerce where Cholula has been underpenetrated,” he said. “We're increasing awareness through brand partnerships, brand marketing, investments and by leveraging promotional scale across McCormick brands. We have recently launched Cholula wing sauces and also relaunched two flavors with cleaner formulas.
“In Flavor Solutions, we're using our culinary foundation and insights on menu trends to grow our back-of-the-house foodservice penetration, increasing Cholula's menu participation. Cholula is a great addition to our portfolio and delivers on our strategy to accelerate our global condiments platform.”
Cholula’s products are complementary to the company’s existing hot sauce portfolio, which includes such brands as Frank’s RedHot. In fact, Cholula and Frank’s RedHot may be more complementary to each other than any other brands in the category, said Michael R. Smith, executive vice president and chief financial officer at McCormick.
“I think first, Cholula has a really passionate fan base with a real affinity among younger and more diverse populations, which is incremental to Frank's devoted fan base,” Mr. Smith said. “Cholula also over-indexes to Mexican dishes, while Frank's over-indexes to chicken and Buffalo- flavored dishes. And finally, Cholula is really complementary to Frank's even from a US regional perspective. Frank's is more concentrated in the East and Cholula in the West. In the last six months, we've seen really minimal impact and overlap between Cholula and Frank's. Many consumers have both in their pantry, including many of our employees. We found a lot of our employees really loved Cholula before we bought it.”
Mr. Smith said both brands are among the fastest-growing brands in the condiment aisle.
“If you look at over a two-year CAGR as we lap the significant second quarter consumption period from last year, both Cholula and Frank's are still seeing double-digit growth,” he said. “You can tell my excitement is building here on this brand.”
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June 14, 2021 at 06:02PM
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Cholula heating up sauce category at McCormick | 2021-06-14 - Food Business News
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