ORRVILLE, OHIO – The J.M. Smucker Co.’s performance is being hindered by many of the same issues plaguing other consumer packaged goods companies, most notably consumers trading down to private label and volatile commodity markets. But company management sees the Uncrustables brand as a significant tailwind in the year ahead to counter the headwinds the company is currently facing.

In fiscal 2025, Smucker is guiding company sales growth of 9.5% to 10.5% on sales of $8.53 billion in fiscal 2024 to a range of $9.34 billion to $9.43 billion. Net sales growth is expected to be 2% and inclusive of a 1% headwind from reduced contract manufacturing sales related to some divested pet food brands. Primarily supporting the growth will be a full year of sales from the Hostess Brands acquisition and added capacity and marketing investments in Uncrustables.

“… We have called out about a 9% contribution from Hostess to our FY25 top-line outlook,” said Tucker Marshall, chief financial officer, during a June 6 conference call with securities analysts. “And when you do the math, it’s going to imply that Hostess is going to (have) around $1.4 billion of top-line sales in fiscal 2025.  And, so, as we see that in our first couple of quarters (of the fiscal year), it will be sort of around flattish to slightly up. And then as we get into the third and fourth quarters, you’ll see some continued growth year-over-year or quarter-over-quarter.”

The optimism around Uncrustables stems from additional capacity coming online as the company starts operations at its new plant in McCalla, Ala., and marketing investments.

Marshall declined to say what the company’s marketing budget will be in fiscal 2025 but did say it will be up $50 million year-over-year at the company level with about $20 million of that increase going to Smucker’s “base business,” largely led by investment in Uncrustables.

“ … We are moving from a supply-driven growth to demand-driven growth, which requires brand building,” said Mark T. Smucker, chairman, president and chief executive officer. “And, so, we are now fortunate to be able to turn on brand building and those investments in Uncrustables are largely supporting the brand through marketing, which is a national television and digital campaign to really drive household penetration and trial.”

Uncrustables had sales of approximately $800 million in fiscal 2024 and management expects it to reach $1 billion by the end of fiscal 2026.

“… Our view is that it will be relatively steady,” Smucker said. “We have brought on capacity, and we'll continue to do so, which will support largely in line with our demand growth. And then our investments in the brand are really aimed at again increasing awareness and household penetration.

“There still has runway there. You know, it’s always surprising to us to hear that some consumers still don’t know what an Uncrustable is, and so there is opportunity continuing to reach new consumers through some of the traditional brand building and merchandising tactics. And that’s really what we're aiming to do.”

Coffee is Smucker’s largest business, generating $2.7 billion in sales during fiscal 2024, but it has been challenged by volatility in the market for green coffee beans. In response to recent higher green coffee costs the company raised prices on some products in early June.

“We expect the coffee category to remain resilient, despite recent inflationary pressures and volume declines, given consumers’ love of daily coffee rituals and continued strength in at-home consumption,” Smucker said. “Seventy percent of all coffee drinking occasions continue to be at home. This trend largely benefits us as the No. 1 at-home manufacturer in the US retail coffee market, with three of the top seven brands in the category.”