More cooking and baking happening at home during the pandemic has been a windfall for CPG manufacturers such as McCormick & Co. And the seasonings company has good reason to believe these trends will continue.
“One of the things that we truly believe is that cooking is a skill,” said Jill Pratt, McCormick’s chief marketing excellence officer. “It’s something that, as you get better at it, you want to do it more and more.”
As consumers have been making more of their own meals at home since the Covid-19 outbreak began, Pratt said they’ve discovered—or rediscovered—that cooking is “not as hard as people thought it was.”
On Thursday, the herbs and spices manufacturer reported that year-over-year net sales increased 8% to $1.4 billion for the quarter ending May 31. Household penetration also increased 16%, meaning millions of new pantries and refrigerators across the country now contain products from the company’s many brands, such as French’s, Old Bay and Frank’s RedHot.
“It’s a true expansion, which we’re pretty excited about,” said Pratt, noting that half the company’s growth is coming from people who are cooking more frequently, while the other half is coming from individuals who are beginning to get into the habit.
Pratt said the rate of consumers cooking at home is likely to persist even after the pandemic starts to subside, in large part because cooking makes people feel better about their health as they’re both witnessing and controlling what ingredients go into their meals.
“There’s less of that sense of guilt,” Pratt said. “If there is guilt because they’re baking something, they know exactly what that is [and] they know how to balance it out during the day.”
In early May, research from PricewaterhouseCoopers found that 69% of U.S. adults who’ve dedicated more time to cooking during the pandemic said the activity has improved their quality of life.
Recent survey data from the sales and marketing agency Acosta shows that 42% of consumers are eating more meals with family members, suggesting a resurgence of quality time around the dinner table. Preparing food for others is also a good way to show affection and appreciation.
“Cooking and baking, certainly, is sometimes an activity to do with the whole family [and] with children as entertainment, but it’s also a way of caring for others and showing people that they care,” Pratt said.
Despite the good news on the home front, not everything has been idyllic for McCormick. The company’s business segment that provides products to restaurants and other food service customers dropped 18% during the past quarter, with sales declining from $537.8 million to $438.5 million. Pratt noted that as states are beginning to open up again and people are going out to eat, sales have begun to rebound.
In terms of marketing efforts, the company is planning to increase its investments in the second half of 2020. For the past quarter, McCormick spent 41% more on working media compared to the same period last year, according to Pratt. In March, McCormick named 360i as its media agency of record.
At the onset of the outbreak, McCormick began rolling out step-by-step cooking shows on social media featuring McCormick’s food stylist Rachel Miller and executive chef Kevan Vetter. Pratt said the company now has 50 such videos on Instagram, which have attracted over 4 million impressions.
During the quarter, McCormick reported that organic traffic to its website was up over 200%, with consumers aged 18-34 searching for recipes and cooking tips leading the surge.
In May, McCormick partnered with actress Drew Barrymore, who hosted a virtual event on Instagram Live called #TacosTogether. Later that month, the company paired Frank’s RedHot with former NFL quarterback Eli Manning for a series of tweets that involved, as Pratt put it, a “little bit of good-natured trash talking” aimed at his brother, Peyton Manning, who was playing in a celebrity golf tournament.
“We’re investing to make sure that we capture this growth, and that people are using all the products they buy,” Pratt said. “We’re definitely in a lean-in mode with our consumers.”