- The J.M. Smucker Co. will discontinue its Jif Power Ups peanut butter-based snack line. CEO Mark Smucker said during a presentation at the annual Consumer Analyst Group of New York conference in Florida that it was a "difficult decision," but the Ohio-based company needs to reallocate resources to portfolio areas more likely to generate greater financial returns.
- Smucker debuted Power Ups in May 2018 in both crunchy granola bars and creamy granola clusters. The legacy CPG firm called them a wholesome snack choice with peanuts as the first ingredient, no high fructose corn syrup and 6 grams of protein per serving.
- Mark Smucker also said at the CAGNY conference that two new Jif products, a creamy peanut butter spread with no added sugar and creamy peanut butter in a 13-ounce squeezable container, would be coming to market in the company's next fiscal year, which begins in May.
Even though Jif Power Ups apparently didn't resonate enough with kids and parents to drive large revenues, CEO Mark Smucker said the platform was successful in attracting new consumers to the brand. Jif has a 40% market share in the peanut butter segment, according to the company's CAGNY presentation, so the new products coming out later this year could help maintain that position, even without peanut butter-based snacks.
Still, it's hard to understand why the lineup failed to gain enough traction with consumers for Smucker to keep it around. The company announced in October more than 2.5 million households had bought Jif Power Ups as of December 2018, and two versions of the bars were being launched in convenience stores.
The popularity of the snack segment continues to grow, so competition is fierce for shelf space and brand loyalty, especially in the bars category. Other food manufacturers such as Hershey, Kellogg and Mondelez have been buying up bar brands and emphasizing their better-for-you snacking portfolios as the category grows increasingly popular with consumers. But considering the competition flooding the space, now could be a good time for Smucker to bow out, instead focusing its efforts in categories that are not so hotly contested.
For legacy CPG companies such as Smucker, it often isn't enough to rely on core brands to enhance sales, so it needs to constantly innovate and reposition products to keep up with the trends. As Smucker pulls back on its Jif Power Ups, the company will be investing in other innovations, including one that has been a resounding success: Smucker's Uncrustables.
In its CAGNY presentation, the company said Uncrustables was "the fastest-growing brand in frozen snacking" with a 19% increase in annual net sales between fiscal year 2001 and 2019. Smucker's new $340-million, 430,000-square-foot plant in Longmont, Colorado — which started up last summer — can turn out 2 million Uncrustables daily, the company said.
Moving forward, a focusing on more productive investments and enhanced marketing support could help revitalize Smucker's flagging revenue picture, but it could take time. The company has relied mainly on pet foods to boost sales, followed by its coffee segment. While sales bumped up slightly in fiscal year 2019, its second quarter revenue dropped 3% to $1.96 billion compared to $2.02 billion for the year before. The company is projecting a 3% decrease in net sales for the full fiscal year.
If dropping Jif Power Ups can help improve the company's bottom line and better streamline its portfolio, then it could prove to be a smart strategy. Since Smucker is expected to release third quarter earnings on February 26, it should soon become clear whether its strategies for achieving more sustainable top-line growth are beginning to have a positive effect.