McCormick is expanding its condiments offerings with the acquisition of Cholula Hot Sauce in an $800 million deal.
“The acquisition of Cholula accelerates McCormick's growth opportunities within our condiment platform and broadens our portfolio in the hot sauce category with the addition of the Cholula brand," says McCormick’s Lawrence E. Kurzius, chairman, president and CEO. "Hot sauce is an attractive, high-growth category and, as an iconic premium brand, Cholula is outpacing category growth. As McCormick continues to capitalize on the growing consumer interest in healthy and flavorful eating, Cholula, a brand known for authentic bold and spicy Mexican flavors, is a strong complement to our portfolio providing consumers and foodservice operators with an even more diverse product offering that we expect will strengthen our growth opportunities."
McCormick, which already owns Frank's RedHot hot sauce brand, reported an 8% jump in sales in its latest reporting quarter, as higher at-home food consumption outweighed weak sales to its restaurant partners.
Hot sauces have grown in popularity, thanks to the rising popularity of spicier cuisines such as Thai and Szechwan and the influence from pop-culture You Tube cooking shows.
Cholula's annual net sales are approximately $96 million and are expected to grow mid-to-high single digits in a normalized environment beyond the COVID-19 pandemic. Cholula's portfolio of six flavours is made in Mexico. McCormick plans to retain the Cholula brand name in both the retail and foodservice channels.