Smucker is reporting a net income of nearly USD $195 million, reflecting “the positive impact of ongoing and incremental marketing investments” in its brands.
For the company’s Q2, Smucker pulled back its ad spend relative to the same period the year prior by approximately 3.5% to USD $109 million. However, Smucker is promising “increased marketing investments planned for the second half of the year,” and expressed confidence in “continued momentum with upcoming marketing and merchandising activities.”
Smucker, the maker of Milk Bone, Jif peanut butter, Folgers coffee, and Uncrustables, reports that net sales for its international business (which includes Canada), increased 6% on a comparable basis. This was primarily driven by the launch of Uncrustables sandwiches in Canada, brought to life recently through a bickering brothers fall campaign, and Jif peanut butter, partially offset by pet food and snacks.
Smucker says that in conjunction with the portfolio optimization in Canada – which includes the closing and divestiture of its condiments business – the CPG is assessing its operating model and restructuring to support its Canadian operations more efficiently. This will further focus resources in support of its highest-growth and margin expansion opportunities, including the recent launch of Uncrustables.
In the U.S., Smucker says it anticipates continued household penetration growth for Uncrustables with new demand drivers, including advertising and in-store activations. The company also recently launched the brand’s first national advertising campaign that debuted on Monday Night Football.
Smucker also announced it had completed its acquisition of Hostess Brands, which the company claims will contribute approximately $1.5 billion in net sales, representing approximately 15% of the total Smucker portfolio going forward.
According to the company, the Hostess portfolio of brands will benefit from Smucker’s Brand Growth Flywheel, which includes marketing investments, what it calls “intelligent media,” innovation, net revenue optimization, strategic customer partnerships and sales execution.
“We will leverage this model to expand distribution in retail channels, specifically grocery, mass and club,” president and CEO Mark Smucker said in the company’s prepared remarks. He also noted that he sees growth opportunities in away from home channels beyond convenience stores, including colleges and universities, travel, lodging, and entertainment venues.