Food Business News - June 28, 2016 - (Page 24)

Smucker earnings soar on coffee sales, pet food acquisition I'd like to use Caramel Colors in my formulation, but my customers will only use non-GMO ingredients. How can I do both? 24 FOODBUSINESS NEWS ® ORRVILLE, OHIO - The J.M. Smucker Co. finished fiscal 2016 on a high note. Net income in the year ended April 30 rose 100% to $688.7 million, equal to $5.77 per share on the common stock, from $344.9 million, or $3.33 per share. Sales for the year rose 37% to $7,811.2 million. Year earlier results include a charge against income of $173.3 million related to the early redemption of debt. Key drivers behind the performance were the acquisition and integration of Big Heart Pet Brands in 2015 and a dramatic turnaround in its U.S. Retail Coffee business unit. In late October 2015, Steve Oakland, president of U.S. food and beverage for the company, said during the company's annual investor day in New York that Smucker's U.S. Retail Coffee segment had peaked in fiscal 2014 with an operating profit of $640 million. He forecast then that it would take the company until fiscal 2019 to achieve that level of profitability again in the coffee business. In fiscal 2016, the coffee segment generated $645.9 million in profit on sales of $2,239.2 million. "Net sales were up 8% and segment profit increased 18% to $646 million, representing a full recovery of the segment profit decline in the prior year," said Mark Smucker, president and chief executive officer, during a conference call with financial analysts on June 9. "This outperformance was driven by several factors, including the successful launch of Dunkin' Donuts K-cups, the implementation of the planned Folgers canister downsize, a moderation in competitive activities, and the net benefit of lower commodity costs and pricing. "Providing lower pricing on Folgers roast and ground coffee resulted in improved performance for our mainstream coffee business in 2016. Tonnage for our mainstream brands was up 3%, while units shipped were up even more, given the canister downsize early in the fiscal year. In addition, our dollar share within the mainstream segment of the coffee category increased nearly 2 share points to 55% for the latest 52-week period." On the commodity front, Mr. Smucker said the company had experienced a 9-month to 12-month decline in prices. "So, you have seen this very consistent sustained lower coffee cost, and that has allowed us to behave properly, or responsibly if you will, because we have had consistency in our underlying cost structure," he said. Looking ahead to fiscal 2017, Mr. Smucker said the momentum in coffee should continue. In May, the company lowered list prices in its coffee portfolio 6%, reflecting lower green coffee costs. "Dunkin' K-Cups achieved nearly $220 million in retail sales for the latest 52-week scan period and gained a 6% dollar share of the K-Cup market, giving us an overall share of nearly 15% June 28, 2016

Table of Contents for the Digital Edition of Food Business News - June 28, 2016

Food Business News - June 28, 2016
What will Brexit mean for U.K. food and agriculture?
Obesity rate rises as sweetener use declines
Beverage Business News - Protein on trend in R.-T.-D. beverages
Table of Contents
Web Contents
Editorial - Market fragmentation intensifies C.P.G., retail competition
Coca-Cola invests in organic aloe water beverage maker
Dunkin’ Donuts evolves with expansion of beverage portfolio
Philadelphia passes tax on caloric, diet beverages
Post said to be considering combining with Lamb Weston
Teasdale adds to private label portfolio with purchase of Mesa Foods
CVS to expand selection of healthier foods, will add to private label line
Monster moving beyond energy beverages with debut of Mutant, Hydro
Coca-Cola changing its soft drink strategy to focus on ‘shaping choice
McDonald’s to relocate corporate headquarters
Smucker earnings soar on coffee sales, pet food acquisition
A squeeze on pectin
Picking out pectin alternatives
Kellogg launches $100 million venture capital fund
Kellogg adds Pure Organic to Kashi portfolio
TreeHouse Foods profiles the changing private label consumer
Martha Stewart enters meal kit market with delivery subscription service
B&G Foods ready to ‘fight back’ in frozen food aisle
Washington - Audit finds F.D.A. must improve food recall process
Snack Trends - Key trends unveiled at Sweets & Snacks 2016
Crispy, convenient and gluten-free
When gluten-free orders get serious
Company profile - WhiteWave Foods eyeing $3 billion in additional U.S. plant-based foods sales
WhiteWave’s Earthbound Farm brand set to soar in fresh and frozen
Industry Images - Record attendance at 2016 Purchasing Seminar
New Food Products
Ingredient Market Trends - Post-eleventh hour compromise on G.M.O. labeling
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - June 28, 2016