ORRVILLE, OHIO — The J.M. Smucker Co. continues to search for ways to get the Hostess business back on track. How will they do it? If recent comments from company executives are any indication it will come down to one thing: focus.

In a February presentation at the Consumer Analyst Group of New York Conference in Orlando, Fla., Mark Smucker, president and chief executive officer of J.M. Smucker Co., outlined five pillars expected to serve as the foundation for the company’s strategy to return the Hostess brand to growth: delivering the base portfolio; expanding distribution; driving innovation; continuing portfolio evolution; and establishing revenue synergies.

Now, less than four months later, the company has pared down its pillars from five to three.

In pre-recorded comments related to the June 10 release of its fiscal 2025 earnings, Smucker said the company is narrowing its priorities for the Hostess brand to strengthening the portfolio, elevating execution and reigniting sustainable growth.

“We are taking decisive actions to improve the results of our Sweet Baked Snacks segment, which has not met our expectations,” Smucker said. “The business was impacted by two primary factors, which ultimately led to underperformance in the segment.

“First, consumers continue to be selective in their spending, largely driven by inflationary pressures and diminished discretionary income, causing the sweet baked goods category to recover slower than we anticipated. These trends are causing a reduction in all channels, inclusive of convenience, where traffic and spend has been broadly challenged.

“Second, we did not perform with excellence from a distribution, merchandising and competitive standpoint. We are addressing these challenges and are committed to returning the Hostess brand to growth. With that said, the environment and our assumptions have evolved since we acquired the Hostess business.”

In the fourth quarter ended April 30, segment profit in the Sweet Baked Snacks business fell 72% to $20 million from $70.2 million, while sales declined 16% to $251 million from $337 million. The most recent quarter included charges related to the divestiture of certain Sweet Baked Snacks value brands to JTM Foods, LLC, as well as divestiture of the Voortman business.

The narrowing of priorities comes as the company onboards a new leader for the Sweet Baked Snacks business. Judd Freitag was promoted to senior vice president and general manager of Pet and Sweet Baked Snacks in late February. He succeeded Dan O’Leary.

Smucker in the earnings call remarks said new leadership has provided a “current perspective” of the Hostess business, and as a result has led to the new focus as well as new expectations, specifically 3% long-term net sales growth (down from 4%) for the Sweet Baked Snacks segment.

The foundation for the Hostess growth plan, though, lies in the three key drivers, Smucker said.

Donettes is one of the core products that Hostess plans to focus on going forward.

| Photo: ©JAMMY JEAN – STOCK.ADOBE.COM

“First, we are strengthening our portfolio to stabilize the Hostess brand’s performance and deliver margin expansion,” he said. “This includes optimizing our assortment, executing portfolio simplification tied to fixed cost reductions, and improving competitiveness through key price points. Actions we are taking include improving core velocities through brand building, media investment, and breakthrough activations. We are currently launching a portfolio redesign across all consumer touchpoints and optimizing our assortment of product offerings through SKU and display rationalization.”

In addition to improving core velocities, Smucker said the company is taking steps to rebuild the margin profile of the Sweet Baked Snacks segment through a streamlined bakery footprint and performance enhancement. To that end, the company recently announced the closing of a plant in Indianapolis that manufactures sweet baked goods for its Hostess business. J.M. Smucker plans to close and pursue a sale of the plant by the end of 2026, according to the company.

The company also is evolving its promotion and trade optimization strategy to meet the needs of today’s consumer, Smucker said.

“Our second strategic driver for the Sweet Baked Snacks segment is to elevate our execution by improving our supply chain efficiency, streamlining commercial processes, and redeploying resources,” Smucker said. “To start we are creating a dedicated Sweet Baked Snacks sales organization to enable greater focus and are reorganizing marketing resources to improve accountability and prioritization within the segment.

“Our third driver is to refocus our strategy to reignite sustainable growth. Hostess remains an iconic brand, with strong awareness, category-leading household penetration, and beloved products with the No. 1 brand of packaged donuts in the category in Donettes, the No. 1 cupcake in the category, and a leading snack cakes brand in Twinkies. We are focusing on the unique areas of strength for the brand by evolving our demand creation strategy to meet the expectations of today’s sweet snacking consumer and shifting our innovation strategy to ensure we are strengthening the iconic parts of the portfolio.

“We will continue to apply our proven brand building model to the Hostess brand and through these actions we are confident we can build back momentum and profitability for the Sweet Baked Snacks segment, while positioning it for sustainable long-term growth. Altogether, our key platforms, including the Hostess brand, represent our largest growth opportunities. We anticipate these brands will deliver over 80% of the company’s growth over the next five years.”