McCormick & Company is poised to expand its Mexican and Latin American footprint by acquiring an increased ownership stake in McCormick de Mexico from its long-time business partner Grupo Herdez.
The Hunt Valley, Md-based spice and condiment giant has maintained a 50-50 ownership partnership with Mexican food manufacturer Grupo Herdez since launching McCormick de Mexico in 1947.
Under the recent deal, McCormick & Company purchased an additional 25% ownership stake in McCormick de Mexico for $750 million, which raises the US company’s stake to 75%.
Mayo in Mexico
McCormick announced plans for the purchase in August, calling it an exciting new chapter for its Mexico operation, most notably in mayonnaise sales, where McCormick & Company commands roughly 70% of the market.
McCormick de Mexico’s Mayonesa con Jugo de Limones, a lime-flavored variety of mayonnaise, maintains strong brand recognition in Mexico. Its annual net sales of roughly $810 million is expected to grow by mid-single digits, according to McCormick. The company offers a broad portfolio of products, which also includes spices, marmalades, mustard, hot sauce and tea.
The transaction would expand net sales in McCormick’s condiments and sauces portfolio from 14% to 22%.
“With this expanded ownership, we will advance our global flavor leadership and increase our presence in condiments and sauces,” Brendan Foley, McCormick chairman, president and CEO, said in August. “In addition, the brand commands strong loyalty among Mexican consumers and foodservice operators. The strength of the brand and its remarkable track record combined with our differentiated global flavor expertise and capabilities will enable us to drive further growth in Mexico, an attractive and high-growth market.”
McCormick added that Mexico’s growing middle class, with increasing income, is growing consumption and driving consumers’ eagerness “to explore new flavors and global culinary trends.”
The company’s increased stake in McCormick de Mexico also offers a springboard for further expansion into Latin America, the company said.
McCormick’s relationship with Grupo Herdez will continue, with an increased focus on McCormick-branded products. “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.
North of the border
While McCormick de Mexico is set for growth south of the Rio Grande River, its American parent company has been growing its Latin American flavor options for years in the US.
In 2020, McCormick & Company purchased Cholula Hot Sauce from Greenwich, Conn.-based private-equity firm L Catterton for $800 million.
“Cholula is a great strategic addition accelerating our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce,” said former McCormick & Company President, Chairman and CEO Lawrence Kurzius at the time of the transaction. “The talented employees of Cholula have built a strong foundation, and when combined with McCormick’s operational expertise and infrastructure, we plan to drive further growth of this iconic brand.”
McCormick & Company also has seen strong growth in its Mayonesa con Jugo de Limones in the US, which experienced average 30% growth from 2021 through 2024, according to Valda Coryat, vice president of marketing at McCormick & Company.
“McCormick Mayonesa has been a part of family traditions for over 70 years. Its legacy, authenticity and great flavor continue to attract consumers across generations. As Mexican flavors become a weekly habit, we expect to see even more momentum for these kinds of authentic pantry staples across households,” Coryat said.
That’s resonating with Gen Z and Millennial shoppers in the US, Coryat added.
“Gen Z and Millennials are more engaged with Mexican cuisine than other generations. They cook Mexican food for any time of day, use a wide variety of authentic ingredients such as whole dried peppers, queso fresco and crema, and embrace bold spice levels with diverse chili varieties,” Coryat said. “These younger cohorts are heavily influenced by social media and often experiment with fusion formats that blend Mexican flavors with other cuisines.”
McCormick & Company also has seen strong growth in the US with its Cholula Chiles & Pepitas Chili Crisp and its Cholula Birria Cooking & Simmer Sauce.
