About Lawrence Kurzius
McCormick Executive Chairman Lawrence Kurzius has said that the company's pricing for the fiscal year is largely in place, describing the discussion around price as "overblown" and stating that McCormick spices cost "pennies a serving." He attributed the company's first-quarter results to "solid growth" across its consumer and flavored solutions segments and said the results gave management confidence in its full-year outlook. Kurzius also stated that "one of the first things to go" for consumers is "expensive dining out," and that the company tends to perform well in various economic conditions.
Kurzius has repeatedly described a "long-term trend" of cooking at home, particularly among millennials and Gen Z, which he said was accelerated by the pandemic but predated it. He noted that the company has seen "sustained consumer demand" and gained market share, citing a 16% increase in household penetration and an 11% increase in usage rate. Regarding the Cholula hot sauce brand, acquired by McCormick, Kurzius said the company expanded its distribution and propelled it to the number two position in the U.S. hot sauce category, adding over a million households.
Source: AI-verified profile updated from Lawrence Kurzius's recent appearances.
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Transcript (14 segments)
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Host0:02
McCormick reporting record sales and reaffirming guidance for the year ahead, rebounding from a miss across the board last quarter. Joining us in a CNBC exclusive interview, McCormick CEO. Great to have you back on the show.
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Lawrence Kurzius0:17
Thanks for having me today.
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Host0:18
I think Wall Street viewed this quarter as a big sigh of relief when it came to pricing and sales growth you saw. How do you frame what happened here and the reaction, which is very positive?
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Lawrence Kurzius0:31
Well, we're really pleased with the results, obviously. It is only the first quarter of the year, but it does give us confidence in our outlook for the whole year. We had solid growth across our consumer and flavor solutions segment. We made great progress on cost containment. I think analysts are as excited as we were, and investors are reacting to the incredible innovation we've got coming up the rest of the year.
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Host0:57
But the growth that you mention, wasn't it all pricing? Volumes didn't grow.
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Lawrence Kurzius1:04
Volumes actually didn't grow during that time, but, you know, we're still lapping some pretty big impacts from a year ago that weigh on the volumes. A year ago we still had Omicron in the US and Europe. We exited Russia, so we're lapping that. And one of our biggest markets outside the US is China, which, of course, was in lockdown or having an epidemic during that time. So, you know, these are really strong results. And I say that the strength of volume, at the same time we did have significant pricing action, really shows price elasticity isn't a major factor for us.
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Host1:47
Which we've heard over and over again from the consumer staples and the consumer companies at the same time. And yet we're wondering as consumer food inflation comes down, are you still raising prices? What is your outlook on that?
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Lawrence Kurzius2:06
Our cost inputs go up, we have to pass that on. For McCormick, I think one of the things that was good news for investors on the call was that for the most part, we've got our pricing for this year done. You know, most of our pricing is in place. And we're able to have much more productive conversations with our customers about growth opportunities around our innovation program and around promotional activity and that sort of thing.
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Host2:38
It's been fascinating. Sara gets to the question of how much price you can take when volumes are negative. Is there like a, is there an industry standard as to how far volumes need to fall before a producer or manufacturer backs off on price?
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Lawrence Kurzius2:55
Well, you know, I think you're looking at it from the wrong direction. I think a lot of this conversation around price is, frankly, overblown. You know, the price of everything seems to be going up all around us. And the price for McCormick spices is actually pretty modest compared to other factors that might be going into the consumer's consumption basket. We actually see ourselves as part of the solution to the inflation problem that consumers face. I mean, it literally only takes pennies a serving to bring great taste to a meal. That creates 90% enjoyment of the meal.
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Host3:36
I agree. Hot sauce, I can put it on everything.
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Lawrence Kurzius3:43
Everything's better with a little bit of cinnamon.
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Host3:46
I totally agree with that. So, what are you seeing on trends like cooking and eating at home? Because everybody expected this to fall off a cliff when the economy reopened. It hasn't. It stayed high. And now they're worried about the economy and I wonder if you're seeing even more people cooking?
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Lawrence Kurzius4:05
There's been a long-term trend for cooking at home. Millennials and Gen Zers prefer cooking at home, they see it as more healthy, an outlet for creativity, a chance for flavor exploration. There's going to be pressure on the consumers' pocketbook. One of the first things to go, frankly, is expensive dining out. Eating at home is much more economical. So, we tend to do well whether times are good or times are hard. The consumer wants great flavor, long-term trends are in our favor.
