Smucker on course to double net sales of Uncrustables to $500m+ in five years

Premium coffee brand 1850 is wooing younger drinkers, says JM Smucker

By Elaine Watson contact

- Last updated on GMT

New brand 1850 "tested well with not only traditional Folgers drinkers but also a younger generation of consumers"
New brand 1850 "tested well with not only traditional Folgers drinkers but also a younger generation of consumers"

Related tags: JM Smucker

Initial demand for JM Smucker’s new premium coffee brand 1850 has been stronger than expected, with research suggesting sales could be “highly incremental,” company execs told analysts this week in a Q4 earnings call dominated by questions about the lackluster performance of some of its legacy brands.

While sales missed Wall Street expectations, falling to $1.781bn from $1.784bn, CEO Mark Smucker said sales declines at Crisco, Jif and Pillsbury were partially offset by growth at the Folgers and Dunkin' Donuts brands, which benefited from lower coffee prices.

The new 1850 coffee line - 'inspired by the consumer insight that the authenticity and nearly 170 years of heritage of the Folgers brand, which originated in San Francisco during the Gold Rush' - meanwhile, had had strong feedback from the trade, he said.

 “The product… tested well with not only traditional Folgers drinkers but also a younger generation of consumers …The initial launch spans 17 SKUs and retail interest has been strong with customer acceptance rates and the number of shelf facings exceeding our expectations… We expect 1850 to be a growth platform for years to come.”

Marketing VP Joe Stanziano added that the brand - which features imagery inspired by some of Folgers’ early packaging (which featured a wax seal)  - was not expected to cannibalise sales of Dunkin Donuts coffee. 

It is a very different positioning than the Dunkin’ brands. It will slide into that entry-level premium segment. And the work we've done prior to launch shows that it is highly incremental.

jif power ups

"The positioning, the way we talk to the consumer, the product is very different and I think when you start to see some of our consumer communication, you will see the differences there. So we are not concerned about cannibalization with the Dunkin’ Donuts brand.”

Smucker said he was “similarly optimistic about Jif PowerUps, our new line snack bars and peanut butter clusters that began shipping in May.

"This on trend product extends the power of the Jif brand into the fast-growing snacking category, while tapping continued interest in protein-based snacks.”

Uncrustables

Smucker on course to double net sales of Uncrustables to $500m+ in five years

Sales of the Uncrustables brand, which is also fueled by Jif peanut butter, were up 15% this year, “marking the fourth consecutive year of double-digit growth,”​ said Smucker.

In 2018, the brand surpassed the $250m level in annual net sales ... With construction of our new facility in Longmont, Colorado, on track for completion in fiscal 2020, this will provide capacity to further accelerate growth as we expect to double net sales for Uncrustables to more than $500m over the next five years.”​ 

E-COMMERCE SALES:​ “While still a small base with just over 2% of 2018 US retail sales coming from the e-commerce channel, sales were up 71% this year with pet food brands up 64% and coffee sales in the channel more than doubling. We expect 5% of our net sales will come from the pure play e-commerce channel by fiscal 2020 and an even greater percentage when factoring in click and collect models.” JM Smucker president and CEO Mark Smucker

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