Food Business News - July 10, 2018 - 42
J.M. Smucker worldwide sales
Is more change ahead?
Source: J.M. Smucker Co.
from earlier pet food acquisitions. A new
K-Cup agreement has been a positive for
the company's economics, distribution
and building additional s.k.u.s.
"As a result, net sales for our U.S.
K-Cup portfolio grew 11% for the year,
with Dunkin' Donuts and Cafe Bustelo
K-Cups both up over 20%," Mr. Smucker
said. "Due to the improved profitability of
K-Cups, margins are now consistent across
all of our coffee segments, which is critical
given our strategic focus on growing our
baking ingredient business.
"While growth through acquisitions plays a key role in our strategy, we
have also demonstrated a willingness
to divest businesses that are no longer
consistent with our strategic focus and
direction," he said. "Given our focus
on growing our coffee, pet and snack
food businesses, in April of this year,
we announced our intent to explore a
divestiture of our U.S. baking brand and
business. We are moving forward in the
process and anticipate providing future
updates in the coming months."
premium and one cup segments."
The Right Spend program of cost reduction was Mr. Smucker's final example
of cost savings. While he said the program
will enhance cost discipline across the
organization, he cited the relocation of
Smucker's pet foods offices in San Francisco and Burbank, Calif., to the company's
Orrville headquarters as an example.
The acquisition discussion offered Mr. Smucker an opportunity to
elaborate on plans for the company's
In questions and answers following
prepared presentations, analysts posed
tough questions about the challenges
Smucker was facing, with a particularly
direct question from an analyst who asked
why Mr. Smucker seemed so confident in
the outlook given the performance of the
share price and in the aftermath of a "big
fourth-quarter miss and guidance well off
the company's CAGNY comments."
Mr. Smucker said he was taking
the long view given the company's
121-year history of success. Over this
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Food Business News
July 10, 2018