ORRVILLE, OHIO — Sales of Uncrustables frozen sandwiches surged by 33% in the second quarter of J.M. Smucker Co. The torrid growth rate was announced days after the company said it would spend more than $1 billion on a new Uncrustables plant in Alabama.
Smucker net income for the quarter ended Oct. 31 was $206 million, equal to $1.90 per share on the common stock, down from $231 million, or $2.02 per share, the year before.
Quarterly sales were $2.05 billion versus $2.03 billion in fiscal 2020.
In the company’s US Retail Consumer Foods segment, net sales for the quarter were down 8% but up 9% if the divested Crisco business were excluded.
“This was driven by volume/mix growth of 6% and 3 percentage points from higher net pricing,” the company said. “Growth was led by Uncrustables frozen sandwiches, which grew 33%. The Jif brand grew 5%, and Smucker’s Fruit Spreads grew 3%.”
Away From Home business was up 25% on a comparable basis, driven by double-digit growth for coffee, Uncrustables frozen sandwiches and portion control spreads.
Several investment analysts asked about Uncrustables in a conference call Nov. 23.
Mark T. Smucker, president and chief executive officer, said the decision to build the new plant in Alabama is a case of “investing where the growth is.”
Sales are on track to reach $500 million per year, and the end to potential growth for Uncrustables is nowhere in sight, Mr. Smucker said, adding that the brand’s household penetration remains modest.
“The investment in the Alabama facility, which we will break ground on in the next couple of months, will support, obviously, further growth to what we believe could be north of $1 billion,” he said. “And so the reason to believe is there’s just a ton of runway on this brand. Household penetration, No. 1, is still low. It’s only about 11%. There’s significant room for growth in household penetration. No. 2, we have not invested significantly in marketing. And so we have not turned on any significant consumer spend. And then there is runway even just on our core peanut butter and jelly offerings, whether that’s in particular places in US Retail, certain locations and Away From Home. We have not turned on Canada yet. And then there’s opportunities in the convenience channel. So if you think about all of those plus the fact that we haven’t done any really meaningful innovation, we just think there’s a ton of growth opportunities and momentum for that brand.”
Tucker H. Marshall, chief financial officer, Smucker said the Phase 2 expansion of the company’s Longmont, Colo., Uncrustables plant will be completed by the end of fiscal 2023.
“That will enable the ongoing expansion above $500 million sales target,” he said. “And so therefore, we do not see a constraint in the near term associated with continued growth of that brand and that business.”