What’s in Your Bag or Briefcase? Smucker CFO Wants It to Include Uncrustables Sandwiches

As shoppers battle rising costs, Smucker has seen lifted sales with continued demand for coffee and at-home foods. Uncrustables sandwiches are among Smucker’s products that consumers are buying more of, and they have a wider appeal than just in lunchboxes, according to Chief Financial Officer Tucker Marshall. “Where it wins initially is through the lunchbox, through the parent that is buying the product as a lunch item or as a snacking item,” he said of Uncrustables. “But then all of a sudden you realize that it’s in a briefcase, it’s in a handbag, it’s in a golf bag, it’s in, you know, the car for the road trip.”

“So all of a sudden, you’re finding them everywhere,” Marshall said.  

CFO Journal talked to Marshall about the Uncrustables brand, overall price increases and the recent sale of certain pet food brands. His responses have been edited for length and clarity. 

WSJ: Demand for Uncrustables sandwiches has increased over several quarters. Are you expecting that will continue? 

Marshall: Currently we have about a 10-plus percent household penetration. And we feel we can double that over the next several years, as we continue to round out the U.S. retail channel, which is your traditional Walmart environment, or your grocery environment, which is the Krogers and the Targets of the world, and then you have more of your environments around your dollar channels, such as dollar stores. 

Then we’ll be able to focus on two additional channels. One is the international area, which we just launched in Canada. So the Uncrustable sandwich headed into the Canadian marketplace. And then also in the away-from-home channel, which is not only convenience or hospitality or lodging, but it’s also the school environment as well, where we sell these products. 

We have been building capacity through three manufacturing facilities in order to meet the demand. The original factory is in Scottsville, Ky. It was built years ago as the initial mass production manufacturing facility. We’ve built a facility in Longmont, Colo. And then we’re in the early phases of a third facility in McCalla, Ala. 

WSJ: Where else are you seeing higher demand? 

Marshall: Our coffee portfolio has demonstrated growth primarily through our Folgers, Dunkin’ and Café Bustelo brands. In the most recent quarter, that portfolio demonstrated some nice growth of high single digits, at approximately 7%. 

We have seen an increase in at-home coffee consumption since the beginning of the pandemic, and that’s because consumers have begun to establish new habits at home in terms of coffee consumption. It’s also because of a flexible, hybrid working model. 

At the same time, it’s a very affordable cup of coffee. The cost of a cup of coffee at home is much less than a cup of coffee away from home. 

WSJ: As things stand now, are you thinking you can hold the pricing for Smucker brands?

Marshall: We over the last several years, like everyone, have experienced cost inflation. We’re still in an inflationary environment. We have not seen a reduction in inflation, but we’re not seeing continued increases, so we’ve plateaued. 

Over the last several years, we’ve had to take pricing to recover that cost increase. In our last fiscal year, and even in the fiscal year prior, we’ve had to take pricing across our entire portfolio to recover those inflationary-based increases. [Smucker hasn’t disclosed specifics around its pricing increases.]

As we move forward, we want to continue to be prudent in our pricing actions, so that we’re recovering justified cost increases or potential cost decreases, and we’re doing that appropriately for the retailer and the consumer. And we want to also acknowledge that it’s important for us to have a portfolio of products and brands that go from mainstream or value to premium, in order to ensure that we have a full spectrum of products for all of our consumers. 

WSJ: Smucker in April completed a deal valued at around $1.2 billion, selling pet food brands including 9Lives, Kibbles ‘n Bits and Nature’s Recipe to Post Holdings. How will this allow Smucker to focus on remaining pet brands such as Milk-Bone and Meow Mix?

Marshall: In the pet category that we participate in, you have pet snacks, cat food and dog food. Where we as a company have the right to win in the pet category is with dog snacks and mainstream cat food. The competitive intensity in dog food was pretty intense. You have really strong competitors with Mars, Nestlé and .

So we decided to allocate resources to the higher-growth areas of pet snacks and cat food in order to support being higher growing and more profitable in the pet category. And so it made sense for us to divest certain pet food brands, which are primarily dog food brands.

WSJ: Going back to the Uncrustables brand, sandwich options currently include grape jelly, strawberry jam and honey spread varieties, all with peanut butter. There’s also a hazelnut spread option and choices with ham, turkey and cheese. What’s next, is there an emphasis on reaching new demographics? 

Marshall: We really are focused right now on the core peanut butter and jelly, where there’s the unmet need against the demand across age demographics. 

But is there life beyond peanut butter and jelly? Potentially. And we’re exploring what that might be and what those formats might be. Is it a grilled cheese? We’ll see. Is it a meat, egg and cheese? We’ll figure out what that looks like, but right now we can’t make enough of the peanut butter and jelly for our consumers. 

Write to Jennifer Williams-Alvarez at [email protected]