McCormick & Company, Incorporated (MKC): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of a true global staple, and honestly, seeing how McCormick & Company, Incorporated structures its business in late 2025 gives you a clear picture of its resilience. As we map out their strategy, note the scale: their trailing twelve-month revenue as of Q3 2025 sits around \$6.79 billion, with a conservative full-year net sales growth projected between 0% to 2%, targeting adjusted EPS between \$3.03 and \$3.08. That's the tightrope walk of a flavor leader balancing iconic consumer brands with complex industrial solutions. I've distilled their entire operation-from proprietary flavor tech to their global sourcing network-into the nine essential blocks of the Business Model Canvas right here, so you can see precisely where their value is created and where the costs are hitting.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Key Partnerships

You're looking at the network that keeps McCormick & Company, Incorporated running globally, which is a massive operation spanning over 150 countries and territories with over $6.7 billion in annual sales. The strength here is in deep, strategic relationships across sourcing, manufacturing, and customer channels.

OMP for AI-driven supply chain planning

McCormick & Company, Incorporated is embedding artificial intelligence into its core operations through a partnership with OMP, using the Unison Planning platform for global operational planning. This move is central to their digital transformation strategy to handle operational fragility.

• The system manages both assembly-to-order (ATO) and make-to-stock (MTS) production within shared production lines.
• The initial rollout targets Canada and the United States, with subsequent expansion into the EMEA and APAC regions.
• The goal is to synchronize demand, supply, materials, and factory capacity by integrating OMP with the company's SAP ERP environment.
• This partnership aims for optimized cost and cash by improving alignment between market demand and production timelines, supporting lower cost of goods through waste reduction.

Global network of raw spice and herb suppliers

The foundation of McCormick & Company, Incorporated's flavor leadership is its extensive, resilient sourcing network. This diversity is a key risk-management tactic.

Here's a look at the scale of this sourcing operation:

Metric	Value
Countries Sourced From	Over 75 countries
Sourcing Network Reach (Reported)	Across 85 countries
Raw Material Cost Concentration	No one raw material makes up more than 5% of total cost of goods sold
Sustainability Standard Focus Countries (Grown for Good)	Vietnam, Indonesia, India, and Brazil

McCormick & Company, Incorporated uses its Grown for Good sustainability standard for suppliers, which is being leveraged in key sourcing locations like Vietnam, Indonesia, India, and Brazil.

Strategic alliances with quick-service restaurants (QSRs)

Alliances with foodservice customers, including QSRs, fall under the Flavor Solutions segment. This segment contributed approximately 43% of consolidated net sales in fiscal year 2024.

• The Flavor Solutions segment serves Quick Service Restaurants and Casual Dining Restaurants.
• A major customer relationship is with PepsiCo, Inc., which accounted for approximately 13% of McCormick & Company, Incorporated's global flavor solutions sales in 2024.
• The top three customers in the Flavor Solutions segment represented between 47% and 49% of that segment's global sales in 2024.

Co-manufacturing and co-packing partners globally

While specific partner names aren't detailed, the operational partnership structure is evident in how McCormick & Company, Incorporated manages its production lines using the new AI planning system. The system is designed to manage production across shared lines, which often involves co-manufacturing or co-packing arrangements to balance ATO and MTS demands.

McCormick de Mexico joint venture for regional strength

The joint venture with Grupo Herdez is a significant partnership, with McCormick & Company, Incorporated recently moving to increase its ownership. This deal solidifies a platform for Latin American expansion.

Key figures related to this partnership expansion:

• McCormick & Company, Incorporated agreed to acquire an additional 25% stake for $750 million.
• This increases McCormick & Company, Incorporated's ownership to 75%, with Grupo Herdez retaining 25%.
• The transaction implies a total valuation of $3 billion, representing approximately 12 times 2025 EBITDA for the JV.
• McCormick de Mexico generates annual net sales of approximately $810 million.
• Post-close, the condiments and sauces portfolio contribution to McCormick & Company, Incorporated's total net sales is projected to increase from 14% to 22%.
• The strong performance of this joint venture drove higher income from unconsolidated operations, contributing to a 9% increase in adjusted earnings per share for fiscal year 2024.

Finance: review the pro-forma impact of the $750 million JV acquisition on the Q1 2026 balance sheet by next Tuesday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Key Activities

You're looking at the core engine of McCormick & Company, Incorporated-the things they absolutely must do well to make money. These aren't just tasks; they are the operational pillars supporting their global flavor business as of late 2025.

Flavor innovation and new product development

McCormick & Company, Incorporated is actively driving growth through innovation, which is seen as key to sustaining momentum through the second half of fiscal 2025. This activity involves rolling out new product extensions and renovating existing lines to capture evolving consumer trends, such as increased home cooking and demand for healthier options. The Flavor Solutions segment, in particular, is securing more product development projects in categories like beverages and snacks to offset weaker volumes from some large packaged food customers.

Examples of recent innovation activity include:

• Launching new Cholula cremosas, chamoy, and cooking sauces.
• Rolling out refreshed packaging and merchandising for the Grill Mates line ahead of the grilling season.
• Planning a relaunch of its gourmet line with a new gold cap and modern design.
• Introducing air fryer seasonings and new all-rounder blends in Europe targeting younger consumers.

The company's initial use of AI dates back to 2019 to accelerate flavor development by predicting new flavor combinations, which established internal data discipline.

Global sourcing and supply chain management

This is a massive undertaking, given McCormick & Company, Incorporated sells spices, seasonings, and flavor solutions in more than 150 countries. Their global sourcing network stretches from smallholder farmers in Asia and Africa to manufacturing plants across North America, Europe, and Australia. This activity is currently defined by managing significant external pressures.

The financial impact of trade and sourcing volatility is concrete:

Metric	Value/Impact (as of late 2025)
Annualized Tariff Exposure	Approximately $140 million
Tariff Impact Affecting 2025 Results	About $70 million
Tariff on Chinese Imports (Incremental)	An incremental 30% tariff on goods imported from China into the U.S.
General U.S. Import Tariff	A 10% tariff on all U.S. imported goods

To counter this, McCormick & Company, Incorporated is rebuilding its planning infrastructure, adopting OMP's Unison Planning platform for global operational planning, integrating it with their SAP ERP environment to synchronize demand, supply, materials, and factory capacity.

Brand marketing and advertising investment

Investment in brand marketing is a prioritized activity designed to strengthen volume trends and drive long-term profitable growth. These investments are factored into Selling, General and Administrative (SG&A) expenses, partially offsetting cost savings. For instance, the Q1 2025 adjusted operating income decrease was attributed, in part, to increased brand marketing investments.

Key areas receiving marketing and investment focus include:

• Strategic investments across key categories to sustain volume-led momentum.
• Enhanced brand marketing supporting strong hot sauce performance and expanded U.S. distribution.
• Investments in digital channels like e-commerce.

The company's Consumer segment organic sales growth in Q3 2025 was supported by these strategic investments.

Comprehensive Continuous Improvement (CCI) program

The Comprehensive Continuous Improvement (CCI) program is central to margin management, actively fueling growth investments while simultaneously driving operating margin expansion. This program is a crucial offset to rising input costs, including tariffs and commodity inflation.

The impact of CCI is quantified:

• CCI-led cost savings contributed to a 20 basis point gross profit margin expansion in Q1 2025.
• CCI savings are part of the plan to fully offset costs related to U.S. import tariffs on China for fiscal 2025.
• In Q3 2025, CCI savings partially offset gross profit margin contraction driven by higher commodity costs and tariffs.

The company expects its 2025 gross margin to be between 50 to 100 basis points higher than 2024, largely supported by these cost savings initiatives.

Managing global distribution and retail shelf space

This activity translates directly into top-line performance, focusing on getting products into the hands of consumers and securing favorable placement. The results show volume-led momentum is being maintained across key regions.

Distribution and volume performance highlights for fiscal 2025:

• Fiscal 2025 organic net sales growth guidance is maintained at 1% to 3%, with a focus on volume-led improvements.
• Q3 2025 organic sales growth was 2%, volume-led.
• Consumer segment organic sales grew 3% in Q3 2025, driven by volume.
• In the U.S., McCormick volumes surpassed private label for the fifth consecutive quarter as of Q3 2025.

Distribution expansion and portfolio renovation are expected to keep volumes strong in the second half of 2025.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Key Resources

You're looking at the core assets that make McCormick & Company, Incorporated a powerhouse in the flavor space. These aren't just line items on a balance sheet; these are the engines driving their market position, so let's look at the hard numbers supporting them.

Iconic brand portfolio: Frank\'s RedHot, Old Bay, French\'s.

The strength of McCormick & Company, Incorporated rests heavily on its portfolio of well-known brands. These trademarks are considered material to the business, with several being explicitly named as critical assets. The Consumer segment, which houses many of these brands, contributed approximately 57% of consolidated net sales in fiscal year 2024. The company expects 2025 volume growth to be in-line with its organic long-term growth objective, which supports the continued relevance of these brands.

• Iconic brands include French\'s, Frank\'s RedHot, and OLD BAY.
• Other key trademarks are McCormick, Lawry\'s, Zatarain\'s, Cholula, Stubb\'s, and Club House.
• The Consumer segment accounted for 69% of consolidated operating income in 2024.

Global manufacturing and distribution network across 29 countries.

McCormick & Company, Incorporated has built an extensive physical footprint to get its products to market. While the prompt mentions 29 countries, the latest data suggests a slightly different scale for the supply chain infrastructure. The company sells spices, seasonings, and flavor solutions in more than 150 countries and territories. In fiscal year 2024, approximately 39% of sales came from non-U.S. operations. The company operates a global supply chain spanning 27 countries with 19 manufacturing facilities worldwide, according to recent analysis.

Proprietary flavor technologies and R&D expertise.

The investment in flavor science is a clear resource. For the latest twelve months ending August 31, 2025, McCormick & Company, Incorporated reported R&D expenses of $102.9 million. This is up from the average R&D expenses of $88.24 million reported for the five fiscal years ending November 2024. The company has been embedding AI and analytics into core operations, moving beyond initial product innovation projects that started around 2019.

Global sourcing capabilities for raw materials.

Securing the raw ingredients is fundamental, and McCormick & Company, Incorporated manages a vast global sourcing network. The company sources ingredients from over 80 countries. They maintain direct agricultural partnerships with approximately 4,500 global farmers. A key sustainability goal is sourcing 100% of its branded iconic ingredients sustainably by 2025. This sourcing scale is managed across multiple regions, including Asia, Africa, and Latin America.

Strong balance sheet and cash flow generation.

You can see the financial muscle in the recent cash flow and balance sheet figures. The company achieved cash flow from operations of $922 million for fiscal year 2024, down from $1.2 billion in 2023. The Board authorized a 7% increase to the quarterly dividend in November 2024, marking the 39th consecutive year of dividend increases. The company expects strong cash flow for fiscal 2025, driven by profit and working capital initiatives. Here's a quick look at the cash position from the mid-2025 balance sheet data.

Metric (In millions USD)	As of May 31, 2025	As of November 30, 2024
Cash and cash equivalents	$124.1	$186.1

Looking at the 2025 outlook, McCormick & Company, Incorporated anticipates adjusted operating income growth of 4% to 6%, and adjusted EPS is projected to range from $3.03 to $3.08. The net sales growth outlook for fiscal 2025 is set between 0% to 2%. If onboarding takes 14+ days, churn risk rises, but the company's focus on CCI (Comprehensive Continuous Improvement) program-led cost savings helps offset margin pressure from rising commodity costs and tariffs experienced in Q3 2025.

Finance: draft 13-week cash view by Friday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Value Propositions

McCormick & Company, Incorporated is a global leader in flavor. Brendan M. Foley, Chairman, President, and CEO, stated, 'Our business is differentiated from others in the industry as we do not compete for calories, we flavor them.' The company manufactures, markets, and distributes herbs, spices, seasonings, condiments, and flavors across 150 countries and territories globally.

The value proposition for home cooks centers on delivering trusted, high-quality spices and seasonings. This is primarily delivered through the Consumer segment, which generated $3.85 B in revenue in fiscal year 2024, making up 57.24% of total revenue. For the second quarter of 2025, the Consumer segment net sales were $931 million, showing a 3.0% organic sales increase driven by volume.

For industrial customers, the value proposition is providing customized flavor solutions. This is the domain of the Flavor Solutions segment, which recorded $2.88 B in revenue in fiscal year 2024, accounting for 42.76% of the total. The company expects its 2025 outlook to include adjusted operating income growth of 3% to 5% (or 4% to 6% in constant currency), fueling investments.

McCormick & Company, Incorporated supports health and wellness trends by focusing on flavor, which allows consumers to enhance food without increasing caloric intake. The company's long-term growth objectives include achieving 4% to 6% Net Sales growth compounded annually through 2028.

The commitment to clean label and sustainable sourcing is embedded in the Purpose-led Performance agenda, with several time-bound goals set for 2025:

• Source 100% of branded iconic ingredients sustainably, including black pepper, red pepper, vanilla, oregano, and cinnamon.
• Reduce Scope 1 and Scope 2 emissions by 20% compared to 2015 levels.
• Cut water use by 20% compared to 2015 levels.
• Reduce solid waste by 80% compared to 2015 levels.
• Achieve 100% circular plastic packaging design, meaning no plastic enters landfill.

The company reported that in 2024, 84% of its plastic was recyclable or reusable.

Here's a quick look at the scale of the segments delivering these value propositions based on fiscal year 2024 results:

Metric	Consumer Segment	Flavor Solutions Segment
FY 2024 Revenue	$3.85 B	$2.88 B
FY 2024 Revenue Share	57.24%	42.76%
FY 2024 Operating Income (Excl. Charges)	$740 million	$330 million

The 2025 financial outlook reflects continued investment to support these value propositions, projecting adjusted EPS in the range of $3.03 to $3.08 (or $3.00 to $3.05 including currency impact). Finance: draft 13-week cash view by Friday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Customer Relationships

You're looking at how McCormick & Company, Incorporated keeps its vast customer base engaged, from the massive food manufacturers to the home cook grabbing spices at the supermarket. It's a dual approach, really, serving both B2B and B2C customers with distinct relationship strategies.

Direct sales teams for Flavor Solutions segment

For the Flavor Solutions segment, which accounted for $752 million in net sales in the third quarter of 2025, the relationship is high-touch and direct. This segment serves manufacturers and Quick Service Restaurants (QSR) customers globally. The focus here is on deep, innovation-driven partnerships, especially in areas like the Americas, where such partnerships drove growth in Q1 2025.

McCormick & Company, Incorporated is actively enhancing these business-to-business relationships through digital tools. They are expanding their digital presence in foodservice with the McCormick for Chefs online platform, which is specifically aimed at restaurants and institutional buyers. This digital push supports the overall strategy of leaning into data and analytics to fuel what leadership calls volume-led growth.

Here's a quick look at the segment's recent performance, which speaks to the strength of these relationships:

Metric	Period Ended August 31, 2025 (Q3)	Period Ended May 31, 2025 (Q2)
Flavor Solutions Net Sales	$752 million	$729 million
Flavor Solutions Organic Sales Growth	1% (driven by price)	Flat (1% price offset by 1% volume/mix decline)
Flavor Solutions Adjusted Operating Income (Excl. Special Charges)	$100 million	$95 million

Category management collaboration with retailers

In the Consumer segment, relationships with retailers are managed through category management collaboration, ensuring McCormick & Company, Incorporated's brands are prioritized on the shelf. The Consumer segment delivered $973 million in net sales in Q3 2025, showing strong pull from consumers that requires tight alignment with retail partners.

The company is seeing success in these relationships, reporting share gains in core categories across key markets. This is supported by evolving consumer habits; for instance, 86% of meals are still mostly cooked at home, which is a 2-point increase from pre-pandemic levels, driving consistent demand for their products.

Key consumer relationship drivers include:

• Maintaining leadership in spices and seasonings, a fast-growing center store category.
• Aligning product timing and messaging with consumer convenience priorities.
• Driving volume growth across all regions in the Consumer segment.

Brand-building via digital and traditional marketing

Brand-building is supported by significant investments in brand marketing and innovation, which leadership credits for volume-driven performance. A major relationship touchpoint is the physical product experience itself. For example, the McCormick Gourmet Collection is undergoing its first major packaging redesign in over 30 years, rolling out nationwide between late 2025 and January 2026.

This redesign spans 72 distinctive flavors, including 54 certified organic varieties. The strategy is to appeal to younger shoppers who value authenticity and style in their cooking expression. Furthermore, seasonal products are a core revenue driver, accounting for up to 30% of McCormick & Company, Incorporated's annual sales.

E-commerce engagement and direct-to-consumer efforts

E-commerce is explicitly listed as a channel within the Consumer Segment's go-to-market strategy, showing a direct relationship path to the end consumer. The overall business strategy is accelerating digital transformation, using data and analytics to enhance marketing and customer engagement across all channels. This digital focus helps tailor offerings and capture demand across all occasions.

The focus on younger consumers drives this digital engagement, as insights show that Millennial and Gen Z shoppers are highly engaged with global flavor experiences. Specifically, 48% of Millennials and 58% of Gen Z shoppers reported eating globally influenced foods in the past week, a trend McCormick & Company, Incorporated addresses through both product innovation and digital content sharing, like recipes and cooking tips online.

Finance: draft 13-week cash view by Friday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Channels

You're looking at how McCormick & Company, Incorporated gets its flavor products into the hands of customers across the globe as of late 2025. The distribution strategy relies heavily on two core segments: Consumer and Flavor Solutions, which map directly to the channels you listed.

For the third quarter of fiscal 2025, the sales figures for these two primary channel groupings were:

Channel Grouping (Segment Proxy)	Q3 2025 Net Sales (Millions USD)	Organic Sales Growth (Q3 2025)
Retail grocery stores and mass merchandisers (Consumer Segment)	$973 million	3%
Foodservice distributors, QSRs, and Industrial Sales (Flavor Solutions Segment)	$752 million	1%

The total net sales for the third quarter of 2025 reached $1.725 billion (calculated from the sum of the two segments), representing a 3% increase compared to the year-ago period, which included a 1% favorable impact from currency. McCormick continues to focus on volume-led growth across these channels.

Here is a breakdown of the channel activities based on the latest segment performance:

• Retail grocery stores and mass merchandisers globally:
  • The Consumer segment saw net sales increase 4% year-over-year in Q3 2025 to $973 million.
  • This growth was driven by volume and product mix, with organic sales up 3% in the quarter.
  • In the United States, volumes surpassed private label competitors for the fifth consecutive quarter.
  • Share gains were significant in EMEA, especially in France and Poland.
• Foodservice distributors and quick-service restaurants (QSRs):
  • This is a key part of the Flavor Solutions segment, which saw organic sales increase 1% in Q3 2025, driven by price.
  • QSR performance remained strong across the Americas and APAC regions, fueled by innovation and customer growth.
  • However, the segment faced pressure in EMEA related to foodservice foot traffic slowdowns.
• Industrial sales to Consumer Packaged Goods (CPG) companies:
  • These sales fall under the Flavor Solutions segment, which reported net sales of $752 million in Q3 2025.
  • The segment faced pressure from softness in CPG customers' volumes in the Americas and EMEA regions.
• E-commerce platforms and company websites:
  • McCormick & Company continues its strategic focus on e-commerce expansion to drive global growth.
  • The company anticipates continued momentum supported by its 2024 prioritized investments in digital areas heading into 2026.
• Club stores and discount retailers:
  • These are captured within the Consumer Segment distribution network.
  • The company achieved strong volume improvements across all regions, indicating broad-based success in reaching various retail formats.

The company reaffirmed its full-year fiscal 2025 guidance for organic net sales growth between 1% and 3%, suggesting confidence in maintaining this channel momentum through year-end.

Finance: review Q3 channel contribution variance against the 1-3% organic sales guidance by Monday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Customer Segments

You're looking at the core buyers for McCormick & Company, Incorporated as of the close of fiscal year 2024. Honestly, the customer base splits quite cleanly into two main buckets, which drive the entire business structure.

Global Consumers: Home cooks seeking flavor and value

This group is the largest revenue driver for McCormick & Company, Incorporated. They are the everyday home cooks buying spices, seasonings, and sauces off the shelf. In fiscal year 2024, this Consumer segment brought in $3.85 B in net sales, which was 57.24% of the total company revenue that year. It's clear that flavor remains a priority for this group, even with economic pressures; for instance, 86% of meal occasions were sourced at home in 2024, staying above pre-pandemic levels. This segment also carries the higher overall profit margin compared to the other major division.

Here's the quick math on the segment split for fiscal year 2024:

Customer Group	FY 2024 Net Sales (Approximate)	% of Total Net Sales (FY 2024)	% of Operating Income (FY 2024)
Global Consumers (Consumer Segment)	$3.85 B	57%	69%
B2B/Foodservice (Flavor Solutions Segment)	$2.88 B	43%	31%

What this estimate hides is that the Consumer segment operating income share was actually 69% of the total, showing its margin strength.

Flavor Solutions: Food manufacturers (CPG) and beverage companies

The second major segment serves business customers, which McCormick & Company, Incorporated groups into Flavor Solutions. These are the food manufacturers (CPG companies) and beverage producers that use McCormick & Company, Incorporated's ingredients, flavors, and extracts in their own products. This division generated approximately $2.88 B in revenue in fiscal year 2024, making up about 42.76% of the total. This customer base is highly concentrated, which is something you need to watch. For example, sales to one major customer, PepsiCo, Inc., accounted for about 13% of consolidated sales in 2024. Plus, the top three customers in this segment represented between 47% and 49% of the global flavor solutions sales in 2024.

You can see the customer concentration risk clearly:

• Top two customers across both segments accounted for an aggregate of approximately 25% of consolidated sales in 2024.
• The largest single customer in the Flavor Solutions segment was responsible for about 13% of total company sales in 2024.
• The Consumer segment's largest customer, Wal-Mart Stores, Inc., accounted for about 12% of consolidated sales in 2024.

Foodservice Operators: QSR chains and institutional kitchens

While not a separate reporting segment, Foodservice Operators are a key part of the Flavor Solutions customer base. These are the Quick Service Restaurant (QSR) chains and institutional kitchens that buy bulk ingredients and prepared flavor systems. Performance here is tied directly to the Flavor Solutions segment results, and it can be sensitive to consumer traffic trends. For instance, in the Americas, branded foodservice performance was flat in Q2 2024 due to reduced foot traffic. Similarly, QSR traffic in EMEA also remained soft during that period. This customer group relies heavily on the B2B relationship, and any decline in their reputation or perception can adversely impact McCormick & Company, Incorporated's business.

International Markets: Focus on EMEA and Asia-Pacific expansion

McCormick & Company, Incorporated's reach is global, with brands touching consumers in about 150 countries and territories. The Americas is the dominant region, but the focus for growth is definitely overseas. Looking at the fiscal year 2024 revenue breakdown by region, you see where the current base is and where expansion efforts are directed. The EMEA region generated $1.24 B in revenue, representing 18.43% of the total. The Asia Pacific region was the smallest contributor at $682.50 M, or 10.15% of the total revenue for 2024. Still, there are positive signs; in EMEA, Consumer organic sales increased by 3% in Q2 2024, and Asia Pacific saw a 4% growth, suggesting a gradual recovery in China. The company is definitely focused on driving that international growth.

Finance: draft 13-week cash view by Friday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Cost Structure

The cost structure for McCormick & Company, Incorporated is heavily influenced by the procurement of raw materials, global distribution networks, and necessary investments to maintain brand equity and operational efficiency. You're looking at a business where input costs, especially for spices and flavorings, are a primary driver of the bottom line.

High cost of raw materials and commodity sourcing.

Commodity price volatility is a major cost factor. As of late 2025, McCormick is navigating persistent inflation in key spices like black pepper, turmeric, cumin, and coriander, leading to projected low single-digit cost inflation for the fiscal year 2025. This pressure directly impacts the gross margin, which saw a contraction of 120-130 basis points in the third quarter of 2025 compared to the prior year period. The company is actively trying to mitigate this through its Comprehensive Continuous Improvement (CCI) program, but the external environment remains challenging.

Significant Selling, General, and Administrative (SG&A) expenses.

While the company drives efficiencies, SG&A is a necessary cost base, partially offset by savings initiatives. For instance, in the third quarter of 2025, SG&A expenses decreased by 100 basis points relative to the year-ago quarter, driven by lower employee-related benefits and CCI savings. However, this benefit is being channeled to fund growth investments.

Manufacturing and global logistics costs.

As a global operator spanning approximately 150 countries and territories, the costs associated with manufacturing, warehousing, and moving product across international borders are substantial. While specific logistics cost percentages aren't always broken out separately from COGS, the overall cost structure reflects a complex global supply chain that requires constant optimization to keep pace with volume-led growth.

Investments in brand marketing and technology are defintely rising.

McCormick & Company, Incorporated views marketing and technology as critical investments to sustain volume growth and differentiation, which are reflected as upward pressures on SG&A. These investments are prioritized to support core categories and drive long-term profitable growth. The company is leveraging AI, data analytics, and intelligent automation to streamline operations, particularly within supply chain functions, as part of its productivity plans.

Here's a quick look at the financial scale relevant to understanding these costs:

Metric	FY 2024 Actual	FY 2025 Outlook/Guidance Context
Total Net Sales	$6.72 Billion	Organic Growth Outlook: 1% to 3%
Gross Profit	$2.59 Billion	Gross Margin expected flat to up 50 basis points vs. 2024
Operating Income	$1.07 Billion	Adjusted Operating Income Growth (constant currency): 3% to 5% (Revised)
Consumer Segment Sales	$3,849 million	Consumer segment historically has a higher overall profit margin
Flavor Solutions Segment Sales	$2,875 million	Segment expected to lead total adjusted operating margin expansion for 2025

Tariffs and foreign currency fluctuation impacts.

Geopolitical trade policies create direct, quantifiable cost shocks. McCormick's gross annualized tariff exposure for fiscal year 2025 swelled to approximately $140 million, with about $70 million directly impacting the 2025 financial results. This is a significant increase from prior estimates of $90 million in total exposure and $50 million in direct impact. For example, certain Chinese spice tariffs temporarily escalated to 145% before settling near 30% for a 90-day period as of October 2025. In contrast, foreign currency fluctuations are expected to have a minimal impact on sales and operating income for the full year 2025.

The company is managing these external shocks by:

• Implementing selective, 'surgical' price adjustments.
• Absorbing some incremental costs to protect volume.
• Driving productivity savings across the Profit & Loss (P&L).
• Exploring alternative sourcing and supply chain initiatives.

The 2025 adjusted Earnings Per Share (EPS) outlook was trimmed to a range of $3.00 to $3.05 per share, reflecting the incremental tariff and commodity cost increases.

Finance: draft 13-week cash view by Friday.

McCormick & Company, Incorporated (MKC) - Canvas Business Model: Revenue Streams

You're looking at the core income drivers for McCormick & Company, Incorporated as of late 2025, which is essential for understanding where the money actually comes from. The revenue streams are clearly segmented, reflecting the dual nature of their business: selling directly to consumers and supplying other businesses.

The overall picture shows a company with a substantial, established revenue base. Trailing twelve months revenue as of Q3 2025 is approximately $6.79 billion. This figure gives you the scale of the business over the recent past. For the full-year 2025 outlook, McCormick & Company, Incorporated projects reported net sales growth to be between 0% to 2%.

The company's earnings power is also a key revenue-related metric to watch. The Adjusted EPS for 2025 is forecast between $3.03 and $3.08. Honestly, navigating cost pressures while maintaining this level of profitability is the near-term challenge for the management team.

The two primary revenue-generating segments are detailed below, based on the latest reported figures from the third quarter of 2025. This breakdown helps you see which part of the business is currently driving the top line.

Revenue Stream Segment	Q3 2025 Net Sales (Reported)	Q3 2025 Organic Sales Growth
Consumer segment (spices, condiments)	$973 million	3% increase
Flavor Solutions segment (industrial ingredients)	$752 million	1% increase

The Consumer segment, which includes the familiar spices, condiments, and seasoning mixes you see on grocery shelves, showed stronger organic growth in the third quarter. This segment's revenue for Q3 2025 hit $973 million, reflecting a 3% organic sales increase driven by volume and product mix. This is the more consumer-facing part of the business, so its performance is closely tied to household purchasing habits.

The Flavor Solutions segment provides ingredients to other food manufacturers and foodservice operations. For Q3 2025, this segment brought in net sales of $752 million, with organic sales growing by 1%, primarily driven by price actions. McCormick & Company, Incorporated expects this segment to be the primary driver of operating margin expansion in 2025, even if its top-line growth is more modest than the Consumer side.

You can see the key drivers contributing to the revenue performance through these points:

• Net sales from Consumer segment (spices, condiments) were $973 million in Q3 2025.
• Net sales from Flavor Solutions segment (industrial ingredients) were $752 million in Q3 2025.
• Trailing twelve months revenue as of Q3 2025 is approximately $6.79 billion.
• Full-year 2025 net sales growth projected at 0% to 2% reported.
• Adjusted EPS for 2025 is forecast between $3.03 and $3.08.

The company's ability to generate revenue is clearly split, but the Consumer side is showing better volume momentum right now. If onboarding takes 14+ days, churn risk rises, which is a good analogy for how quickly they need to get new products to market to sustain that Consumer segment growth. Finance: draft 13-week cash view by Friday.