‘Authentic’ ethnic trend drives McCormick Indian spice investment
McCormick said that India is the world’s largest consumer of spices and authentic Indian cuisine is one of the fastest-growing segments of the burgeoning trend for ethnic food. The company said it has agreed to acquire a 26 percent minority position for about $35m, with completion of the agreement due in the fourth quarter of 2010, subject to regulatory approval.
While McCormick expects to benefit by bringing Eastern’s authentic spices and seasonings to US food manufacturers and consumers, the company said it will help Eastern participate in this growth in the US and other western markets.
Chairman of Eastern M.E. Meeran said: "We are pleased to partner with McCormick and expect to benefit from their expertise in global sourcing, manufacturing, product innovation and brand marketing. Their global presence will accelerate our efforts to bring authentic products to Indian consumers in international locations as well as introduce other consumers to Indian cuisine."
Eastern has turned a profit in each of the past 10 years, with sales of $67m for the year ended March 2010. In addition to Indian distribution, Eastern’s spices are exported to 15 other countries.
Chairman, president and CEO of McCormick Alan Wilson said: "This partnership is an important opportunity for McCormick to participate in the rapid growth of the India food market as consumers seek high-quality, more convenient packaged foods. The management of Eastern has built a strong brand image and utilizes an effective distribution system. They are rapidly expanding their geographic reach, as well as developing innovative and value-added new products."
The venture will be managed by Eastern’s existing team with support from McCormick, the company said. McCormick added that it intends to bring into India “the latest technology in spice supply chain management, manufacturing and innovative new product platforms”.
McCormick embarked on another joint venture in India back in 1994, since which time the company has had a 50 percent share of AVT McCormick Ingredients Private Limited.
“The new partnership with Eastern complements this existing joint venture and demonstrates McCormick's commitment to growth and investment in India,” the company said.