J.M. Smucker is banking on boosting sales from its sluggish US consumer foods division through the launch of a range of snacks, part of plans to double the company’s snacks sales in five years.
The US jam-to-coffee group revealed its new snacking ”platform”, Jif Power Ups, at the Consumer Analyst Group of New York (CAGNY) investor conference in Boca Raton in Florida.
The company is looking to improve the sales performance of its US Retail Consumer Foods division, now the smallest of its three domestic businesses, the others focusing on coffee and pet food.
In the nine months to 31 January, the net sales of Smucker’s US Retail Consumer Foods arm stood at $1.54bn, down from $1.61bn a year earlier.
CEO Mark Smucker is hoping to address this, partly, through the rapid expansion of its snacks division.
“We anticipate doubling the size of our US$300m snacks portfolio in the next five years,” he said. “This growth will be supported by innovation and capacity expansion.”
The emphasis of the new product – available as granola bars and creamy clusters – is on healthy snacking.
Jif Power Ups are described as healthy snacks for kids and Smucker said they should appeal to both parents worried about their children’s health and kids who love tasty snacks.
“Innovation is critical to our growth strategy and it must encompass larger product platforms which will drive growth for years to come,” he said.
The company is also hoping to see online sales continue to accelerate. It revealed e-commerce sales are up 78% year-to-date across its US businesses and is predicting 5% of its sales will be online by fiscal year 2020.
Analyst Andrew Lazar at Barclays responded positively to the presentation.
“Overall, we found JM Smucker’s CAGNY presentation to be one of the more compelling amongst packaged food peers that have presented this week,” he said.
“In our view, the company focused on some very specific and tangible big idea, platform innovations which are meant to fill what are some key voids in its product offering within coffee, snacking, and ultimately pet.”
Lazar added: “Frankly, we don’t believe J.M. Smucker has put out platform innovation of this scale since it launched Uncrustables many years ago.”
Another analyst in attendance, Sanford Bernstein’s Alexia Howard, noted the plans for Jif Power Ups but added: “Jif Power Ups were introduced as another new platform, although these seemed somewhat less differentiated from existing snack bar products.”