The J.M. Smucker Co. is in the midst of “the most robust period of innovation” in the company’s history, Richard Smucker, chief executive officer, told participants at the Consumer Analyst Group of New York conference held Feb. 19 in Boca Raton.
The Orrville, Ohio-based company launched more than 60 new items in fiscal 2012, and plans call for an additional 90 new product launches in fiscal 2013. New products are expected to deliver more than $550 million, or nearly 10%, of fiscal 2013 net sales. The totals include the company’s K-Cup offering, which is expected to generate nearly $300 million in sales, Mr. Smucker said.
He said the company will launch a new line of flavored coffees for Dunkin’ Donuts, a gourmet line of coffee under a licensing agreement utilizing “The Life is Good” brand, an expansion of the company’s specialty nut butters and a natural fruit spreads product line.
Vince Byrd, president and chief operating officer, said K-Cups and their nearly $300 million in sales have exceeded most expectations. The product debuted in six varieties in fiscal 2011, and Smucker has expanded the line to include 10 varieties, with plans to add two more in fiscal 2014. But single-serve innovation is not limited to K-Cups, he said, adding that Folgers Fresh Breaks, a premium instant coffee with more roast and ground-like taste was introduced earlier this year.
Elsewhere in coffee, Smucker expects the premium segment to remain a key growth engine. Mr. Byrd said innovation efforts have contributed significantly to the growth of the Dunkin’ Donuts brand, and include the success of seasonal offerings where fiscal 2012 sales more than doubled over the previous year. The company also plans to launch a new year-round platform for the Dunkin’ Donuts Bakery brand inspired by the Dunkin’ Donuts franchise.
“We will introduce five new and unique flavors to the premium coffee segment later this summer,” Mr. Byrd said. “This initiative represents the latest effort in expanding the breadth of our overall Dunkin’ Donuts offerings, which has increased from six varieties launched in 2007 to nearly 20 sold today.”
Smucker later this year plans to add a fourth premium coffee brand: Life is Good.
“Our ability to forge strong relationships enabled us to license the brand from the Boston-based apparel company whose brand continues to gain popularity with its simple message of the power of optimism,” Mr. Byrd said. “Furthering our sustainability initiative, this launch represents our first line with 100% certified coffee. Additionally, a portion of the royalty payments will benefit kids in need through Life is Good’s Playmakers’ public charity. We believe this brand will resonate with consumers in the growing premium segment.”
Prospects for peanut butter
Mr. Byrd was equally upbeat about the prospects for the company’s peanut butter business. Led by Jif, the company’s peanut butter sales have grown at a 7% compound annual growth rate since 2008, and Smucker has a 46% share of the $2 billion category. The launch of Jif to Go has been a success, with volume for the product doubling in fiscal 2012 and up more than 75% through the first nine months of fiscal 2013.
“Jif to Go capitalizes on innovative ways to liberate peanut butter from the jar providing consumers added convenience and a snacking alternative,” Mr. Byrd said. “Furthering these efforts, we are introducing (Jif Whips) later this spring. Jif Whips expands the breadth of our peanut butter offerings and furthers our role as the only company participating in all peanut butter segments.”
The company plans to take the Jif brand beyond peanut butter as well. Earlier this year Smucker launched Jif Hazelnut, the first expansion of the brand into the fast growing specialty nut spreads.
“This is a $250 million segment growing in excess of 50% this past year,” Mr. Byrd said. “We are pleased with the launch with the product line being incremental to the Jif business and remain enthusiastic about its growth potential. The next phase in expanding into specialty nut comes later this spring when we launch Jif Almond and Jif Cashew Butters. While representing smaller segments, almond and cashew butter are also increasing at rates well in excess of traditional peanut butter. These Jif offerings will represent the first national brand within these segments. We look forward to the opportunities they present.”
