The coffee, food and pet food manufacturer says it continues to navigate a ‘challenging and dynamic’ trading environment due to rising costs, supply chain disruption and the continued impact of Covid-19
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J.M. Smucker’s US retail coffee business achieved third quarter sales of $661.8m | Photo credit: via Shutterstock
Coffee continues to be one of J.M. Smucker’s strongest business divisions amid rising costs, supply chain disruption and market volatility.
Reporting its third quarter results to 31 January 2022, the US coffee, food and pet food manufacturer said net sales decreased by $19.6m, or 1%, to $2.06bn compared to the same period in 2021.
The company attributed the fall to the divesture of several of its businesses over the past year, including its Crisco vegetable oil brand and its Natural Balance and private label pet food businesses.
J.M. Smucker’s US retail coffee business, however, performed more favourably, with net sales increasing $35.9m, or 6%, to $661.8m compared to the same period in 2021.
Coffee segment profits increased $2.7m, or 1%, to $99.5m, with the company highlighting growth of its Cafe Bustelo brand. Sales by volume of the Folgers brand, however, decreased by 1%, with J.M. Smucker noting price increases across its coffee brand portfolio and a reduction in promotional spend with retailers.
Coffee products and portion control spreads also drove growth in the company’s out-of-home business, which saw net sales increase 13% to $265.6m and profits rise 40% to $34.2m.
The mixed results, which also saw sales decrease at J.M. Smucker’s retail consumer foods and pet foods businesses, reflected cost inflation, supply chain volatility and ongoing market uncertainty, the company said.
“We continue to drive long-term growth by focusing on our key growth platforms of pet, coffee, and snacking, including the completion of two divestitures this quarter,” said Mark Smucker, President and CEO, J.M. Smucker.
"Looking ahead, we are navigating a dynamic environment led by cost inflation and supply chain disruptions. We expect these pressures to continue in the fourth quarter. We are confident in our ability to work through these ongoing challenges, deliver on our fiscal year guidance, and support long-term shareholder value creation,” Smucker added.
J.M. Smuckers promotes that its products are present in 90% of US homes. Its prominent brands include the Folgers, Café Bustelo and licensed Dunkin’ at-home coffee ranges, Smuckers spreads and Milk Bone pet food.