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BOCA RATON, Fla (Reuters) – McCormick & Company (NYSE:MKC) Inc is looking to hike prices on its spices and hot sauces at retailers like Walmart (NYSE:WMT) Inc and Kroger (NYSE:KR) Co but is getting “pushback” on the increases, CEO Lawrence Kurzius said in an interview with Reuters on Tuesday.
Kurzius, speaking on the sidelines of the Consumer Analyst Group of New York conference, said the “pushback on this is in line with the pushback (on) the last round” of price hikes the Frank’s RedHot sauce maker introduced last year.
Retailers including Walmart, the world’s largest, have said they are concerned about further price increases from consumer products companies, after largely passing them on following once-in-a-generation levels of inflation. Walmart is among McCormick’s biggest customers, according to the spice maker’s financial reports.
“Everyone is frustrated with costs going up and so are we,” Kurzius said, adding that McCormick’s conversations with its customers on the price increases have a “certain amount of commercial tension associated with them.”
“We like most companies are going to pass it through because it’s really cost-based, and (retailers) see it in their own costs as well,” Kurzius said, adding that he was “confident” that McCormick would ultimately win approval on the increases.
McCormick is revamping its packaging to help its signature spices stay fresher longer, an upgrade that can make the hikes more palatable, he added.
Kurzius said that retailers are looking for promotions from consumer products makers, but the discounts companies like McCormick can offer are not making up for price increases.
“Promotional activity is to drive volume and consumer demand,” he said.
Consumer products companies had slashed promotions and discounts during and immediately after the pandemic because they did not have enough supply, but McCormick reactivated them last year, Kurzius said.
A 23-ounce bottle of Frank’s Red Hot costs about $5.38 on Walmart.com.