ORRVILLE, OHIO — Executives at J.M. Smucker Co. believe the Orrville-based company has the blueprint in place for two $1 billion brands over the next five years: Uncrustables and Dunkin’.
Since its debut 20 years ago, Uncrustables has been a steady performer for Smucker. Despite accounting for only 9% of the category in which it competes, Uncrustables drove 40% of retail category growth over the past year, Mark T. Smucker, president and chief executive officer, said during a Feb. 22 presentation at the Consumer Analyst Group of New York virtual conference.
Retail sales of Uncrustables grew 32% over the past year, putting the brand on pace to deliver approximately $500 million in net sales this fiscal year and setting the stage for the brand to grow to a $1 billion brand over the next five years, Mr. Smucker said.
“Despite being capacity constrained over the years, Uncrustables net sales experienced a 10-year CAGR of 14%,” he explained. “We are confident in delivering continued double-digit growth for Uncrustables over the next several years as we continue to add capacity. We expect to double household penetration as expanded capacity allows us to unlock more demand drivers, including broader distribution, new channels and geographies, expanded consumption with existing and new consumers and increased investment in marketing. We will complement volume growth with net revenue optimization, price pack architecture and innovation.”
To accommodate Uncrustables growth, Mr. Smucker said the company has made significant capital investments. The second phase of construction at its Longmont, Colo., plant is expected to be complete by the end of next fiscal year, while construction on a third production plant in McCalla, Ala., is underway, with operations expected to begin in 2025. The company also plans to build a new R&D facility at its Orrville corporate campus to support the brand, Mr. Smucker said.
Mr. Smucker also for the first time indicated that the Dunkin’ brand is on a similar path as Uncrustables and should reach $1 billion in sales within the next five years.
Mr. Smucker’s optimism surrounding the $2.4 billion coffee segment reflects the company’s anticipation that at-home coffee habits formed during the COVID-19 pandemic will persist.
“At-home coffee consumption now represents 73% of all coffee drinking occasions compared to two-thirds pre-pandemic,” he said. “Consumers have also upgraded their at-home coffee experience by investing in new home coffee equipment, and they have been more willing to trade up to premium offerings.
“Our portfolio benefits significantly from these trends as we are the No. 1 brand manufacturer with three of the top 10 brands in the category, including the iconic Folgers brand and the fast-growing Dunkin' and Café Bustelo brands.”
Mr. Smucker said Dunkin’ is one of the fastest-growing brands in the category, delivering 8% retail sales growth over the past year. And with sales expected to reach $800 million this fiscal year, the possibility of Dunkin’ becoming a $1 billion brand within the next five years is definitely in reach, he said.“Dunkin’ continues to benefit from crossover cafe consumers,” he said.