McCormick CEO Brendan Foley told CNBC’s Jim Cramer on Thursday that the spice maker is assessing how new tariffs will impact sourcing for its products.
“This is a big area,” Foley said. “Agriculture impact is probably what we’re focused on when you’re looking at tariff impact.”
Foley said the company has “done a nice job mitigating the tariff impact” going into the rest of the year. He said it’s important to understand that of the products sold in the U.S., 90% are made domestically. However, he continued, the majority of ingredients are sourced from abroad because many can’t be grown in the U.S.
For example, he said, black pepper can be sourced from different markets around the world, including Brazil, Indonesia or Vietnam.
McCormick topped estimates when it reported earnings Thursday morning. By close, shares were up more than 5%. On the earnings call, Foley said consumers are “adapting to economic pressures” and “continue to spend and not compromise on flavor.” He added that the percentage of meals cooked at home sit above pre-pandemic levels, and he suggested consumers are also more focused on health on wellness.
Foley told Cramer that the quarter was driven by consumer volume growth across the business, and he also lauded the McCormick’s work with food and beverage brands. He said the company’s portfolio bodes well for the future and lends itself to a variety of opportunities.
According to Foley, McCormick’s products are “fundamentally healthy,” indicating that they can do well in a health-conscious environment.
“The best way to describe McCormick is, while others are competing for calories, we flavor them,” Foley said.
