Smucker ‘sticking to its guns’ on marketing spend

The company says it can increase its investment when it needs to, but its current approach is working for now.
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J.M. Smucker Co. provided a look into its approach to marketing alongside its Q2 2022 results on Tuesday – which has been scaled back but shows it has options if it wants to pursue more growth. 

The Ohio-based maker of the Smucker’s, Jif, Bick’s, Milk Bone and Folgers brands posted revenue of $2.05 billion in the period, which topped analysts’ expectations. 

In its conference call, Mark Smucker, president and CEO, conceded that household penetration is still low, at about 11%. However, he says the CPG has not “turned on any significant consumer spend,” specifically mentioning Canada as an area where that could still increase.

But it may be some time before the company pulls that lever. The company is forecasting that its SG&A expenses will decrease by approximately 7% for the 2022 fiscal year.

We are actually moving forward and basically sticking to our guns on our marketing plans,” Smucker says.

The company is, for now, content to let its current performance ride, thanks to strong spend it previously had in Q4 of last year. According to Smucker, the Q2 numbers are also strong despite it not having done any meaningful innovation or tapped opportunities in convenience channels, which shows there is runway for growth.

We’ve had some world-class marketing campaigns, notably Jif most recently, as well as just the store level execution to make sure that we do our best work, trying to keep our brands in stock,” Smucker says.

When it comes to media spend, he says that while it varies by category, it’s approximately 60-40 to the digital side in terms of ad spend allocation, as it’s more targeted. That’s part of a company effort to maintain its marketing effectiveness, despite cutting costs, which has also impacted its number of agency relationships.

“We needed to fundamentally think about how we partnered with our external partners,” Smucker says. “We had many, many agencies [and] essentially consolidated down to one,” he says, partnering primarily with Publicis on consumer marketing.

“In doing so, it afforded us the opportunity to restructure how we are organized and line up with them and maybe most importantly, really making sure that we were giving our partners the license…to create very bold and consumer relevant creative,” Smucker says.

He cited a Jif Peanut Butter TikTok rap challenge with artists Ludacris and Gunna, which was a record-breaker for the CPG in terms of views and influence.