ORRVILLE, Ohio — J.M. Smucker Co. has gone to the dogs.
Pet food is now the biggest selling segment of this northeast Ohio 122-year-old packaged food company.
Mark Smucker, the fifth-generation leader of the Orrville company, is confidently steering the company into the future with pet food and coffee, in addition to jelly, jams and preserves — the jarred food it built its fortune on.
The company — known for its slogan "With a name like Smucker’s it has to be good” — has homed in on the categories of pet food, "snacking" and coffee because "they are growing and we can lead in them," Smucker said.
"All three put together are 25 percent bigger [in terms of sales] than they were five years ago,” he said.
A recent interview with Smucker, the great-great grandson of of company founder Jerome Monroe Smucker, revealed no news that Wall Street isn’t already aware of.
But this Smucker, who became CEO in May 2016, wanted Ohioans to know about significant changes and the future direction of the company that employs more than 2,000 people in Orrville. Smucker took over the top job from his uncle, Richard Smucker.
The company entered the pet-food market in 2015, buying Big Heart Pet Brands (Milk Bone, Meow Mix and other brands) in a $5.8 billion deal.
Then in 2018, Smucker purchased Ainsworth Pet Nutrition, maker of the Rachael Ray Nutrish brand. The brand accounted for about two-thirds of Ainsworth’s sales.
Is the company done picking up brands?
Smucker said that with the company paying down debt it took on with the two big pet-food acquisitions, "you won’t see any significant acquisitions in the next — call it twoish years."
But, he said, "after we’ve delivered a bit, we’ll be in a position to acquire."
Now the company is focused on continuing to grow what it has — "lead in the best categories… build brands that consumers love… be everywhere… have our products and brands available wherever the consumer wants to buy them," Smucker said.
Last year, the company sold its U.S. baking business — "a declining category," Smucker noted, meaning it let go of Pillsbury, Hungry Jack, Martha White and Lilly White for $375 million to subsidiaries of Connecticut buyout fund Brynwood Partners.
Leading in the "best categories" of pet food, coffee and snacking, Smucker said, means having "depth and breadth" in those categories.
Take coffee, for example. Smucker offers packaged mainstream, premium and single-serving cups. Coffee sales increased 4 percent for the fourth quarter that ended June 6, the company reported earlier. The increase was primarily driven by sales of Dunkin and Café Bustelo brands. They each had double-digit growth in K-cups, as sell as roast and ground formulas. Coffee is Smucker’s most profitable segment.
The company also has been innovating in its snacking category, focusing on portable products. Last year, it introduced Jif Power-Ups, available in bars and clusters. Net sales for Jif increased 4 percent for the fourth quarter, primarily reflecting the contribution from Power-Ups snacks, the company reported earlier.
Also included in snacking are Uncrustables — the frozen peanut butter-and-jelly sandwiches that are so popular the company is building another Uncrustables plant, in Longmont, Colorado. It’s expected to be in production this fall. The other Uncrustables facility, in Kentucky, cranks out about 650 million sandwiches a year, bringing in about $250 million in sales.
Along with transforming its product portfolio, the company has transformed its marketing, with the goal of boosting its connections to consumers.
Later this summer and early fall, new advertising for more than ten of the company’s brands will start to show up on air and in social media, Smucker said, adding, “I believe you will feel a difference.”
With the influence that millennials have, even on their parents, and the impact of social media, he said, “keeping up with the culture and maintaining our brands as relevant, and how we speak to consumers, is really what’s in the process of changing.”
Through all the change, Smucker said, the company has maintained its culture.
"We say thank you for a job well done," Smucker said. "We listen with our full attention and we look for the good in others so we assume positive intent."
The company also has continued to support local nonprofits, including the I Promise School, a partnership between Akron Public Schools and the LeBron James Family Foundation; Akron Children’s Hospital; and the Akron-Canton Regional Foodbank.
The company expects sales for fiscal 2020 to increase 1 to 2 percent. Adjusted earnings per share are expected to range from $8.45 to $8.65.
"We've had some really nice momentum" in the the past two quarters, Smucker said. "Our priority is to continue that momentum ... is to use what we've built to generate growth."
