Why Smucker's Isn't Worried About Increasing Its Prices
With a name like Smucker's, you've got to be confident in the future of your business. And why is that? Regardless of your thoughts on the quality of their jam and other products, according to Case Western Reserve University, Smucker's has been on Fortune magazine's 100 best Companies to Work For list annually since 1998. What's more, Food Navigator notes that the company saw a strong rise in sales and per-share values that is expected to continue.
But, like any company in today's market, they are dealing with the scourge of inflation that is driving down the value of the dollar and making consumers consider every purchase a bit closer. CNET reports that as prices on groceries and fuel continue to climb, the average American family is spending around $311 more per month for these everyday items. So, it may have come as a surprise to some that Smucker's CEO Mark T. Smucker, on a June 7 conference call, expressed confidence in the company's position in regards to possible price hikes in the latter half of 2022 and beyond, says Food Business News.
The secret to Smucker's success
Smucker's strong position owes to the solid relationships they foster with their retail partners and the forethought they put into upward adjustments in pricing, said Smucker, according to Food Business News. He also pointed to the resilience of the company's product sectors and elasticity models that have helped Smucker's anticipate changes in the commercial landscape.
While sales did modestly lag for Smucker's U.S. Pet Foods and U.S. Retail Foods divisions, the numbers increased for their U.S. Retail Coffee business, buoyed by a pandemic-driven change in consumption habits. Smucker's owns two popular coffee brands, Folgers and Dunkin'.
The secret to the confidence felt by Smucker's and its leadership might be linked to the impressive growth the company has undertaken in recent years. Founded in 1897 in Orrville, Ohio, the company — whose original product was apple butter — is still a family-run business, though it is publicly traded. Their product line includes an impressive array of name brands, from the aforementioned Dunkin' to Jif Peanut Butter to Carnation, states the company's website.
Today an estimated 92% of households use at least one Smucker's product, according to a Stout interview with CFO Mark Belgya. He credits the company's success to a host of factors, such as an aggressive growth strategy since 2000, future-focused strategic thinking, flexible management from the Smucker family, and a culture that values employees' wellbeing.