Visitors inside the sprawling 1.8-million-square-foot McCormick & Co. logistics center southeast of Baltimore are quickly greeted with the warm smell of cumin, cinnamon and other spices. Workers zip around in golf carts that navigate the giant complex, commingling with autonomously controlled forklifts grabbing pallets of different products to be assembled later on into orders for customers.
The half-mile-long building, which is as big as 23 soccer fields, is responsible for 40% of McCormick’s U.S. distribution and can get products to four in ten Americans within a day from the location. Its investment, described by McCormick as “significant,” is part of its goal to build its “supply chain of the future” and a crucial step toward making other parts of the spices and flavorings company’s operations more efficient.
While the facility covers only 400,000 square feet more compared to the total surface area of the nine buildings it replaced, the shelves are 14 feet taller and three feet closer together — allowing McCormick to more efficiently utilize the space.
The impetus for the sprawling facility began in earnest about four years ago after McCormick digested a pair of deals — the purchase in 2017 of Reckitt Benckiser’s Food Division for $4.2 billion, which added French’s mustard and Frank’s RedHot brands to the fold; and three years later, the $800 million acquisition of hot-sauce maker Cholula.
The additional volume further squeezed McCormick, which was already one of the largest beneficiaries of growing consumer demand for different flavor options and healthier foods by consumers.
“We were starting to burst at the seams,” said Varsha Patel, engineering director at the McCormick Logistics Center. “As we started adding more and more buildings, the costs got people’s attention and we were like, we’d like to do something better because the way we are serving our customers now is kind of insane.”
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Permission granted by McCormick & Co.
‘Everyone’s best friend’
Before McCormick started consolidating nine buildings inside the new plant, it would run multiple shuttles between the locations — picking up Frank’s at one place, Stubb’s BBQ Sauce at a second and pepper at another, for example — to complete an order.
McCormick estimates it’s driving 150,000 fewer miles annually with the operations under one roof, saving time and money on fuel, while reducing its environmental footprint. The company also is touching pallets and cases of product 28 million fewer times each year because there isn’t as much of a need to move them between warehouses.
The logistics center, situated on the site of an old Bethlehem Steel facility, also creates dozens of other advantages that make their way down to McCormick’s bottom line and increase its ability to service its customers more effectively.
In addition to fewer miles being driven and less money being spent on costly leases, McCormick has more room to purchase and store ingredients or packaging material until they are needed by some of its facilities 30 minutes away where the products are made — a valuable option given the recent supply chain disruptions in the marketplace.
“This is the flagship and mothership for McCormick. We are truly a logistical site here and we are helping to solve a lot more problems … than just distribution.”
Varsha Patel
Engineering director, McCormick Logistics Center
A recent visit to the logistics center in October found large containers of pepper, cinnamon and cumin and drums of vanilla on the floor waiting to be deployed.
The extra floor space and efficiently designed storage capacity allow McCormick to not only have extra product on hand to meet an uptick in demand, such as around the holidays, or an unexpected supply disruption, but it also provides benefits to other facilities nearby.
If a production plant needs to make equipment improvements, for example, it’s less risky for McCormick to shut down a line if it knows it already has enough product stockpiled at the logistics center.
Recently, the building had dozens of pallets loaded with French’s mustard in shrink wrap while construction was taking place at a French’s facility in Missouri that manufactures the condiment. In the past, the smaller facility would package it and store it whenever they could; now they just depend on the logistics center.
“We’ve become everyone’s best friend,” said Patel, who previously was the project manager for the McCormick Logistics Center. “This is the flagship and mothership for McCormick Logistics Center. We are truly a logistical site here and we are helping to solve a lot more problems … than just distribution.”
The logistics center has 244 bays where trucks can pull in to pick up their loads. The multiple slots mean truckers don’t have to idle as they wait for a spot to open, and McCormick can get deliveries out to its customers faster and on time. The process has the added benefit of fostering goodwill with truckers whose services are in high demand with other businesses.
Inside the facility, McCormick also has room to assemble the order as much as 24 hours ahead of time so when the truck does arrive it can start loading immediately and get the order on the road — often in as little as 90 minutes.
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Permission granted by McCormick & Co.
Thinking green
The logistics center is a big part of McCormick’s company-wide effort to reduce its environmental footprint. The Maryland-based company has committed to achieving net zero greenhouse gas emissions by 2050.
Employees breaking down store displays work adjacent to a conveyor belt where they can deposit the cardboard that takes the material to a compactor before it is taken away to be recycled.
McCormick is testing out a pilot program at the facility to rebuild unusable wooden pallets, a costly expense for the company. And the white-painted roof, which helps to deflect the sun now, is primed for the installation of solar panels in the next few years when it will look to attract the energy source.
McCormick said the facility has the capacity to expand. The center of the building has room that could eventually be used to build more shelves or store raw materials to meet growing demand. The company has devoted 50,000 square feet of real estate that sits empty on a second floor to handle an expected uptick in e-commerce shipments.
“We future-proofed for growth,” Patel said. “As our customers grow, we need to keep up.”
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