Coffee remains one of J.M. Smucker’s strongest business divisions, helping the US coffee, food and pet food manufacturer sustain sales throughout a turbulent 12 months of product recalls and supply chain disruption
Net sales in US retail coffee rose by $64.1m, or 11%, in the final quarter of 2022 | Photo credit: J.M. Smucker Co
Strong retail packaged coffee sales have offset a turbulent year of trading for J.M. Smucker, which has grappled with a challenging trading environment and a $125m product recall.
Announcing its fourth quarter and 2022 fiscal year results ending 30 April 2022, the Ohio-based company reported net sales of $647.2m for US retail coffee division an 11% increase compared to the same period in 2021.
Overall company sales increased six percent to $2bn, with J.M. Smucker Co. reporting net sales of $8bn for the full year, the same figure achieved in 2021.
However, reflecting rising costs and a challenging trading environment globally, full year profit decreased 14% to $2.7bn and gross profit for the quarter decreased $69m, or nine percent, including a seven percent unfavourable impact of unsaleable inventory and estimated customer returns related to a salmonella contaminated recall of Jif peanut butter products. .
Net sales in US retail coffee rose by $64.1m, or 11%, in the final quarter of 2022, which helped to offset a sales decrease of $22.5m in the company’s US retail consumer foods business.
International sales increased 12% to $271.2m, driven by increased demand for coffee products, as well as flour, baking and fruit spreads.
Pandemic-related implications, coupled with cost inflation and supply chain volatility, were cited by J.M. Smucker Co. as likely to impact future financial results and cause uncertainty for its 2023 outlook.
The company also highlighted the recent Jif peanut butter product recall as impacting financial results for the fiscal year. Nonetheless, net sales are expected to increase 3.5 to 4.5 percent compared to the prior year.
"Our fourth quarter and full-year results demonstrate the continued execution of our strategy and momentum of the business, amid a challenging and dynamic environment. Our strong financial results reflect sustained consumer demand for at-home food and coffee and consumers' desire for our trusted and iconic brands," said CEO Mark Smucker.
J.M. Smucker promotes that its products are present in 90% 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.