Planned offerings include a new line of "Life is Good" branded premium coffee, peanut butter in tubs and an expanded lineup of specialty nut butters. In total, Smucker projected that products introduced in the past three years are forecast to contribute $550 million in net sales, or 10% of total sales, "representing the most robust period of innovation in our company's history," CEO Richard Smucker said in a presentation on Tuesday at a meeting of the Consumer Analyst Group of New York held in Florida.
And the traditionally North America-focused, family-run company is also eyeing new expansion opportunities in China, following last year's minority investment in a Chinese company known as Seamild that makes oat products. "That was a great first step," Mr. Smucker said. In researching that deal "we also ... found several other categories that we thought would fit Smucker's. We're still pursuing those." Still, he cautioned that the China play is "a long-term" strategy, noting that his company takes "a generational approach."
He would know. Mr. Smucker is the great-grandson of company founder Jerome Smucker, who got his start pressing cider at a mill he opened in 1897. The company's flagship fruit spread business hasn't strayed far from its roots. The tagline "With a name like Smucker's, it has to be good" has been in use since the mid-1950s, including recent spots depicting Richard Smucker as a boy.
But a good chunk of the company's innovation plans center around large-scale acquisitions it has made in recent years, including taking on Jif from Procter & Gamble in 2002, which was followed up by the 2008 Folgers acquisition. Jif -- the largest peanut butter brand in the U.S. by a wide margin – is increasingly moving into new formats and varieties, and even away from peanut butter. Last year's launch of Jif Hazelnut spread will be followed this year by Jif Cashew Butter and Jif Almond Butter. The trio of offerings represent Jif's first move into the $250 million "specialty nut" segment that Smucker executives said has grown 50% in the past year.
In its coffee business, Smucker is putting an emphasis on convenience and premium offerings, two trends that are driving coffee category growth. For instance, new Folgers Fresh Breaks come in single-serve packets and premium flavors, such as Black Silk, that seem to resemble Starbucks' Via brand packets. Meanwhile, Smucker plans to continue growing its K-cup business, which includes Folgers and Millstone branded cups geared for Keurig machines.
In its Dunkin Donuts bagged coffee line-up, Smucker is planning a new "bakery series" that includes flavors such as blueberry, jelly and chocolate. Also planned is a new premium coffee that will be sold under the Life is Good label, which is licensed from the Boston-based lifestyle brand company whose mantra is "spreading the power of optimism" and whose other co-branded relationships include one with Hallmark Cards.
Also coming is "Jif Whips," which was mentioned briefly in the CAGNY presentation that showed an image of the brand packaged in tubs that appear to be meant for convenient dipping. (An early package design shows apples and strawberries covered in peanut butter.)
Innovation has emerged as an early theme at the week-long meeting, which features appearances by some of the largest packaged-goods players in the nation.
Kraft Foods Group, for instance, spent nearly its entire hour-long presentation touting its new philosophy of shifting from countless smaller line extensions to so-called "big bets" that are backed with significant marketing. Kraft a few years ago developed a reputation where "good ideas go to die," said Barry Calpino, the company's VP-breakthrough innovation. New products, he said, were poorly supported, "and the reality is, in innovation, when you build it and don't spend behind it, [consumers] don't come and those innovations don't stick."
The new approach features fewer –but bigger – innovations, such as the Mio water flavoring brand, which debuted in 2011 and was supported by a $50 million launch investment. "Instead of going small, we went really big and we went just as big in year two as we did in year one," Mr. Calpino said, noting that Mio grew 67% in its second year.