Food Business News - July 10, 2018 - 41
continue as a lever to manage price."
Net income in the fourth quarter
ended April 30 was $185.9 million, equal
to $1.64 per share, up 68% from $110.4
million, or 96c, in the prior-year period.
On an adjusted basis, earnings per share
increased 7% in the quarter. Net sales for
the quarter were $1,781.3 million, which
compared with year-ago fourth-quarter
sales of $1,783.8 million.
Still, the changes aimed at enhancing
results were meaningful, Mr. Smucker
said. The moves included appointing
new leadership in all strategic business
areas and creating centers of excellence to
improve speed to market.
"We brought to market two of our
most important innovations in recent
years, 1850 premium coffee and Jif Power
Ups snacks," he said. "We bolstered our
premium pet food offerings with the acquisition of Ainsworth, which adds the
fast-growing Rachael Ray Nutrish brand
to the right segment of our portfolio. We
moved forward aggressively with plans
to explore a divestiture of a nonstrategic asset, our U.S. baking business. We
recently communicated with employees
our intention to consolidate our West
coast pet food offices into our Orrville
corporate location to manage our largest
business seamlessly with our centers of
excellence. We enhanced our partnership with Keurig to be more competitive
in the market and open the door to
expanded distribution. And finally, we
launched Right Spend, our zero-based
budgeting program at the beginning of
"These actions are significant and
directly aligned with our consumer-led
In May, Smucker introduced Jif Power Ups, a
line of granola bars and creamy clusters.
J.M. SMUCKER CO.
J.M. SMUCKER CO.
Taking action to improve results
July 10, 2018
strategy to be a food and beverage leader
focused on high growth on-trend categories."
In August 2017, Joseph Stanziono
was named senior vice-president and
general manager, coffee, and Kevin G.
Jackson was named senior vice-president of U.S. Retail Sales and Marketing
Services. The two executives have 20
years and 15 years, respectively, experience at Smucker. More recently, Smucker
promoted David J. Lemmon to president
of U.S. Pet Foods. Mr. Lemmon has been
with Smucker for 24 years, most recently
as president of Smucker Canada, International and Away from Home.
In May the company completed its
$1.7 billion acquisition of Ainsworth
Pet Nutrition, Meadville, Pa., a maker of
pet foods and pet snacks. Ainsworth's
Rachael Ray Nutrish is its leading brand.
Mr. Smucker also discussed at some
length progress the company has made
toward the four pillars on its strategic
roadmap: innovation, investments, cost
savings and acquisitions.
Beginning with innovation, he said
products introduced within the past
three years generated $500 million of
fiscal 2018 net sales, or about 7% of total
"As we begin 2019, initial reads on
the introduction of our 1850 premium
coffee brand are strong," Mr. Smucker
said. "The product, which was developed
through our new approach innovation,
tested well with not only traditional Folgers drinkers but also a younger generation of consumers who prefer bolder coffee blend. The initial 1850 launch spans 17
s.k.u.s (stock-keeping units), and retailer
interest has been strong, with customer
acceptance rates and the number of shelf
facings exceeding our expectations."
Mark Smucker, J.M. Smucker Co.
Also new is Smucker's Jif Power
Ups, a line of granola bars and creamy
clusters introduced in May. The granola
bars are available in three varieties -
salted caramel, strawberry and banana.
The creamy clusters are available in
creamy peanut butter, apple cinnamon
"This on-trend product extends the
power of the Jif brand into the fast-growing snacking category while tapping
continued interest in protein-based
snacks," Mr. Smucker said. He described
a robust new product pipeline in the
company's pet food business, including
products targeting the natural meat
In terms of investments, the second
strategic pillar, Mr. Smucker held up the
company's Uncrustables sandwiches as a
prime example. Sales in fiscal 2018 rose
15%, the fourth straight year of double-digit growth, he said.
"In 2018, the brand surpassed the
$250 million level in annual net sales,
as we produced and sold more than 500
million sandwiches over the course of
the year," he said. "With construction of
our new facility in Longmont, Colo., on
track for completion in fiscal 2020, this
will provide capacity to further accelerate growth as we expect to double net
sales for Uncrustables to more than $500
million over the next five years."
A more modest example of investments offered by Mr. Smucker was in
e-commerce, which he described as a "significant area of strategic focus." Only 2% of
2018 retail sales, the e-commerce channel
at the company grew by 71% in fiscal 2018,
including a 64% jump for pet food.
Regarding the cost saving pillar, Mr. Smucker said $200 million in
synergies were harvested in fiscal 2018
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