Dive Brief:
- In The J.M. Smucker Company's recent earnings report, the company saw comparable sales decrease by 2% excluding acquisitions and foreign exchange factors.
- Smucker's consumer foods segment posted an 8.2% decrease in sales for the quarter, according to The Wall Street Journal. The U.S. retail coffee segment's sales volume fell 15% but was saved by higher prices for a total of only a 1% decline in sales for the quarter.
- Smucker's $3 billion acquisition of Big Heart Pet Foods added $244.5 million in sales for the quarter, which gave Smucker a total sales of $1.45 billion.
Dive Insight:
Smucker has been trying to respond to consumer demands in recent months with a variety of simpler, more natural products, including Crisco organic coconut oil, Pillsbury Purely Simple baking mixes, and fruit spreads sweetened with honey.
"In every given year, it’s not about the number of new products that we want to launch, it’s about making sure that we launch the right new products," Mark Smucker, president of the consumer and natural foods segment, said on a conference call with analysts.
Diversifying its portfolio by expanding into the pet foods category appears to have been a good idea for Smucker as other segments fall due to changing consumer perceptions on processed foods. After the cost of the acquisition itself is taken out of earnings, Big Heart could be even more of a contributor to sales and profits in the future.