Consumers might soon see a rise in the price of spice.
Spice company McCormick & Co. said Wednesday that an increase in the cost of commodities such as dehydrated garlic, black pepper and cinnamon will likely result in higher prices for spices on grocery shelves.
The company has raised the price of spices it sells to restaurants and retailers by 3 percent.
"There is just so much food commodity inflation right now that we expect that we'll see that flow through to the shelf," Alan D. Wilson, McCormick's chairman and CEO, said in an interview.
The Sparks-based company addressed commodity prices as it reported an increase in fourth-quarter earnings. Despite the sluggish economy, earnings rose because of cost-cutting and higher sales of new products, McCormick said.
Net income for the quarter was $133.6 million, or 99 cents per share, compared with $116.4 million, or 87 cents per share, in the same period a year earlier.
Excluding a onetime, 4-cent restructuring charge, earnings per share rose 8 cents from the previous year.
Sales increased 6 percent, to $979.5 million, compared with $924.5 million in the fourth quarter a year ago.
Earnings were helped by a plan to cut operations costs and improve production. The plan resulted in $54 million in savings in 2010, 35 percent more than the company expected.
Innovation has also helped the company, which has introduced new lines of spices and flavors. McCormick increased its spending for marketing by $21 million.
The company said it expects sales to grow in 2011 even though consumers remain cautious.
Sales are expected to rise 5 percent to 7 percent this year, the company said. McCormick said it hopes to achieve cost savings in 2011 of at least $40 million.
Earnings per share are expected to be $2.80 to $2.85, a 6 percent to 8 percent increase from 2010.
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