Dive Brief:
- J.M. Smucker Co. announced better-than-expected profits with 18% growth for the first quarter, due in large part to a boost in U.S. coffee sales, which improved for the first time in 11 quarters.
- Coffee sales increased 12% for the quarter, which came mainly from the successful retail launch of Dunkin' Donuts K-Cup pods and a 6% price cut for most of its Folgers and Dunkin Donuts coffee brands in July.
- Total sales for the company soared 47% to $1.95 billion, though sales for consumer foods, including its namebrand fruit spreads, Crisco oils, and Pillsbury products, remained flat for the quarter, attributed to lower prices for Jif peanut butter.
Dive Insight:
Coffee had previously weighed down Smucker in previous earnings, as the segment saw a 15% decrease in volume last quarter, though sales declined only 1% due to the higher prices still in place at the time. This year's price cuts help offset the backlash from the 9% price increase instituted last year, which the company later called a "misstep."
As single-serving pods became all the rage in recent years, it's not surprising that Smucker jumped on the chance to release K-Cups for its Dunkin' Donuts brand.
Smucker has been following in the footsteps of companies like General Mills and Nestle to offer more of the simpler and natural products consumers demand, including its Pillsbury Purely Simple baking mixes, which contain no colors, preservatives, or artificial flavors.
Snacking is another category Smucker is advancing on, including its new line of Jif bars and more products to come.
Smucker "plans to launch more than 100 new products to meet consumer demand for simple ingredients, healthy snacks and convenience," Food Business News reported.