The rolling heartland of Orrville, Ohio, is home to a $13 billion international business comprised of spreads, snacks, coffee, and pet food.
For 127 years, the J.M. Smucker Company (SJM) has operated a business built on family values and stewarded by descendants of Jerome Monroe Smucker. A long line of Smuckers have managed to turn the business into a publicly traded company and amass a family of products that reach freezers, pantries, and cabinets around the world.
“Continuing to evolve the brands while still being true to their authentic heritage is really important,” J.M. Smucker CEO Mark Smucker told Yahoo Finance (video above).
Contemporary marketing and consumer-oriented product messaging have taken center stage as Smucker positions cross-generational brands like Jif, Folgers, and the namesake Smucker’s products.
“One interesting shift that took place is as we went about modernizing these brands, we had some very restrictive rules,” Smucker said. “We were very conservative in terms of the types of brand taglines or slogans that we would use. Taking off those shackles was something that I think we struggled with as a family, but ultimately it was my decision and the decision of this team, and again, pushing these brands and connecting them to culture is really what catalyzed the growth over the last several years.”
Coffee and Uncrustables pay dividends
To the delight of executives and investors, Smuckers has struck peanut butter and jelly gold with its ever-popular Uncrustables frozen sandwiches.
The business formerly known as Incredible Uncrustables was purchased by Smucker in 1998, and 25 years later, the frozen handheld snack represents nearly $1 billion in sales.
“After 20-plus years, it's the first time that we've advertised because it's been all word of mouth and we were just trying to keep up with demand,” Smucker told Yahoo Finance.
“The other brand that is going gangbusters is Café Bustelo,” Smucker said. “So Café Bustelo is true to its roots as an authentic Latino coffee, and all of the advertising is always bilingual. It's the fastest-growing coffee brand in the coffee category right now.”
While frozen handhelds and beverages prove to be well-oiled machines, the 2023 acquisition of Hostess brands is anticipated to activate a new growth engine for the business.
"We had been studying Hostess for a couple of years and just really were impressed with the growth that they had achieved and wanted to understand why the consumer continued to look for indulgent treats and there continued to be a long runway," Smucker said.
Steering the family business through variable consumer forces
Smucker's forefathers may not have envisioned a world where its products would have to co-exist with low-cost store-brand alternatives from retailers and weight-loss drugs that dash appetites.
The company's share price has been pressured most recently by an inflation-riddled environment that has affected consumer spending, leading to trade-downs in some of the company's categories.
While revenue is up under Mark Smucker’s tenure, the growth hasn’t translated into share price appreciation the same way it did during the previous generation’s leadership. Smucker's stock is down 10% in the last year and over 7% since Smucker took over the CEO role in May 2016.
Smucker is not alone in facing this problem in the massive consumer packaged goods market, with Nestle (NSRGY), General Mills (GIS), Kraft-Heinz (KHC), and generic store-brand alternatives competing elbow-to-elbow for space on retail shelves and in customers' shopping carts.
In any case, the great-great-grandson Mark Smucker has been taking the new-age challenge head-on by building a team around him with diverse perspectives and skill sets.
"The one adage that you hear all the time is surround yourself with people that are smarter than you — that is 100% true," Smucker said. "Everybody on my leadership team is smarter than me. They know things that I don't know. They all come from a different place with different expertise and they all see the world differently. And so that diversity of thought creates an outstanding environment where we get much more out of each other because we're offering different points of view."
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance