Blog: McCormick adds some international flavour
Dean Best | 3 November 2010
US spice group McCormick & Co. today (3 November) announced it had sealed a deal to buy a stake in Indian business Eastern Condiments.
McCormick has paid US$36m for a 26% stake in the Indian spice and seasonings firm, which, the US group said, sells the Eastern brand - a "leading brand" in India and the Middle East.
The news brought to mind my interview with McCormick at food-industry expo SIAL in Paris three weeks ago.
There, I met Jean-Francois Cauvi, commercial director for developing markets at McCormick, who talked at length about the company's recent investments in Turkey and the Maghreb - the three north African nations of Algeria, Morocco and Tunisia.
Cauvi said McCormick would have first-mover advantage in those markets to build businesses selling branded spices to shoppers used to buying spices in bulk.
India is synonymous with spice and building a branded business there would prove difficult with the indigenous knowledge of spices and seasonings.
However, with rising incomes in India and the growth of middle-class consumers demanding convenience, McCormick's investment in Eastern Condiments, a business seeing sales grow at an average of 25% a year over the last three years, looks a wise move.
And a minority stake gives McCormick time to build its knowledge of the business and of the Indian market because, as we all know, any investment in emerging markets has pitfalls as well as potential.
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