Coffee continues to drive J.M. Smucker’s revenues, contributing to the US coffee, food and pet food manufacturer’s $1.8bn first quarter, but the impact of product recalls and supply chain disruption are expected to hinder growth
J.M. Smucker promotes that its products are present in over 80% of homes in the US | Photo credit: J.M. Smucker
J.M. Smucker has reported strong retail packaged coffee sales in the US for the three months ended 31 July 2022, with the business unit achieving 10% revenue growth to $598m.
Overall company sales increased 1% to $1.8bn, broadly consistent with J.M. Smucker’s previous three years of trading, which averaged annual sales of $8bn.
"We delivered another quarter that exceeded our expectations, as consumers' demand for our iconic brands continued in a rising cost environment, driving robust organic top-line growth for our key focus platforms of pet, coffee, and snacking,” said Mark Smucker, CEO.
However, Smucker cited cost inflation, supply chain challenges and a Jif peanut butter product recall as key headwinds, the latter of which had a 9% unfavourable impact on net sales in the period.
The product recall is forecast to further impact J.M. Smucker’s financial results for the remainder of 2023, with the company also expecting ongoing cost inflation and supply chain volatility to narrow profit margins. Nonetheless, net sales are expected to increase 4-5% compared to 2022.
J.M. Smucker promotes that its products are present in over 80% of homes in the US. Its prominent brands include the Folgers, Café Bustelo and licensed Dunkin’ at-home coffee ranges, Smuckers spreads and Milk Bone pet food.