McCormick & Company Inc. has acquired a further 25 per cent of McCormick de Mexico, a JV formed in 1947, for $1.1 billion (US$750 million). The deal increases McCormick’s ownership to 75 per cent and gives the global company a strategic platform to expand into Latin America.
McCormick de Mexico is a well-known food company in Mexico, with a portfolio including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands. Mayonnaise is the main part of its portfolio, with brand Mayonesa con Jugo de Limones one of the most recognised in the country.
McCormick CEO, president, and chair, Brendan M. Foley, said Mexico was “an attractive and high growth market” and the acquisition will increase its presence in condiments and sauces, and solidify mayonnaise as a core product of McCormick’s condiments and sauces portfolio in Mexico.
“The McCormick brand has been a household staple in Mexico for 78 years, with market leadership in high-growth categories, most notably in mayonnaise. In addition, the brand commands strong loyalty among Mexican consumers and foodservice operators,” Foley said.
McCormick de Mexico’s annual net sales are roughly $1.2 billion (US$810 million) and are expected to grow in the mid-single digits range.
The deal will expand McCormick’s condiments and sauces portfolio, increasing its contribution to net sales from 14 per cent to 22 per cent.
For McCormick, Mexico offered a compelling opportunity. It is a high growth emerging market, with growing demographics, evolving consumer trends, and a strong culinary heritage.
“As the second largest economy in Latin America, Mexico has a growing middle class with increasing income, fuelling consumption growth. This dynamic combined with a population eager to explore new flavours and global culinary trends, creates greater growth opportunities for McCormick’s broad flavour portfolio. Furthermore, its strategic location provides further opportunities for expansion into Latin America,” the company said in its investor statement.
“We have had a long and successful partnership with Grupo Herdez, and we look forward to continuing our collaboration. With the expanded ownership of McCormick de Mexico, we plan to build upon their strong results by leveraging our combined expertise in category management, insight-driven innovation as well as best-in-class marketing to expand in adjacent categories and increase channel penetration,” Foley said.
Grupo Herdez chair and CEO, Héctor Hernández-Pons Torres, said it was an “exciting evolution” of an almost 80-year partnership.
“With McCormick’s extensive expertise in herbs and spices, condiments and sauces and global flavour leadership, we are excited to capitalise on new opportunities and achieve even greater success together,” Hernández-Pons Torres said.
