ORRVILLE, OHIO — The introduction of Uncrustables Thaw and Eat items over a year ago should not be taken as an indication that the J.M. Smucker Co. plans to deviate from its core Uncrustables strategy, which, in a nutshell, boils down to producing as many peanut butter and jelly-flavored sandwiches as possible.
“Those (Thaw and Eat) have done reasonably well,” said Mark T.Smucker, chairman, president and chief executive officer, during a Sept. 6 virtual presentation to the Barclays Consumer Staples Conference. “In fact, we're very pleased with the performance of those products, which validates that the platform can live outside of PB&J.
“That said, there is a ton of runway in PB&J. And, so, if you think about the production footprint of Scottsville, Ky., Longmont, Colo., which is almost finished, and then this very large facility in (McCalla, Ala.), all of those facilities are all dedicated to PB&J. There is a possibility down the road of expanding the third site into other mediums, other Thaw and Eat products like meat and cheese, but at the moment it's really focused on peanut butter and jelly.”
Tucker H. Marshall, Smucker’s chief financial officer, added, “Our $1 billion ambition comes from the traditional format of peanut butter and jelly.”
During the first quarter of fiscal 2023, ended July 31, Uncrustables sales rose to $160 million, 30% over the same period of the year before.
“We would envision that on a full-year basis, it would have that level of growth,” Mr. Marshall said. “However, as you think about the second and third quarters, it will trend a little bit lower as we bring on the final stage of capacity in our Longmont facility, which is phase 2. It's an additional bakery and three additional sandwich lines that then will continue to support the growth for this fiscal year and then beyond.”
This past November, the company said it planned to build a plant dedicated to Uncrustables in Alabama. The plant is expected to be operational by 2025.
During the presentation, Mr. Smucker also announced that the company has established a “transformation office” that will focus on continuous improvement strategies to ensure a pipeline of productivity initiatives and profit growth opportunities.
“This initiative includes multiple teams and each team will have the responsibility over discrete areas and activities of the business to help establish new ways of working, along with sustainable efficiencies and cost reduction,” Mr. Marshall said.Later in the presentation he added, “We have experienced material inflation over the last two years, just like everyone else has. And we believe that it's important to get out ahead of whatever a deflationary environment may or may not look like and important to get out ahead of new ways of working, particularly as you think about automation, as you think about your employee base, as you think about supply chain and partners. And, so, this is very much a multiyear comprehensive look at the ways that we work together as an organization to deliver value.”