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JM Smucker CEO: Americans still drinking coffee at home helps our bottom line

·Reporter, Booking Producer
·3 min read
In this article:
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  • SJM
  • SBUX

Starbucks (SBUX) and Dunkin' beware.

One of the biggest COVID-19 era trends were people spending more time at home, and adjusting their consumption habits accordingly. With a large share of workers still operating remotely — and a new variant sparking fears around the globe — big consumer brands like J.M. Smucker (SJM) are still reaping the rewards.

Coffee brands at J.M. Smucker, such as Dunkin' and Cafe Bustelo, saw an 8% increase in sales compared to this time last year, the company said in its recent quarterly report

J.M. Smucker, which primarily has products consumed at breakfast or lunch, is still seeing a benefit from the at-home trend, but "coffee specifically" is seeing significant upside, according to CEO Mark Smucker, who believes the boost "absolutely" comes from home-bound customers.

"In fact, our entire business benefits from folks having stayed at home and continuing to stay at home as we go back to a new normal, where folks will probably work more time from home than away from home or in the office," he told Yahoo Finance in an interview this week.

According to Smucker, 72% of coffee consumption takes place at home, compared to 65% prior to the pandemic. Coffee brands within the J.M. Smucker are "helped by that dynamic."

SAN RAFAEL, CA - JUNE 05:  Packages Dunkin' Donuts and Folgers coffee are displayed on a shelf at a grocery store on June 5, 2014 in San Rafael, California.  Ohio-based J.M.Smucker announced that the increase in coffee bean prices due to severe drought in Brazil is prompting them to raise the price of Folgers and Dunkin' Donuts coffee by 9 percent. J.M. Smucker's fourth quarter earnings slipped 9 percent with profits of $118.5 million, or $1.16 a share, compared to$130.3 million, or $1.22 a share, one year ago.  (Photo by Justin Sullivan/Getty Images)
SAN RAFAEL, CA - JUNE 05: Packages Dunkin' Donuts and Folgers coffee are displayed on a shelf at a grocery store on June 5, 2014 in San Rafael, California. Ohio-based J.M.Smucker announced that the increase in coffee bean prices due to severe drought in Brazil is prompting them to raise the price of Folgers and Dunkin' Donuts coffee by 9 percent. J.M. Smucker's fourth quarter earnings slipped 9 percent with profits of $118.5 million, or $1.16 a share, compared to$130.3 million, or $1.22 a share, one year ago. (Photo by Justin Sullivan/Getty Images)

Back in August, the company announced plans to raise prices on coffee among other products. Meanwhile, this past week coffee prices surged to 7-year high.

Other brands within J.M. Smucker's portfolio that are benefitting from the at-home trend include pet brand Milk-Bone and Uncrustables. 

Smucker considered the latter a "truly...shining star," and one of the most important growth engines for the company in its 30 consecutive quarter of growth. 

Uncrustables was invented in 1995, and Smucker's bought the patent in 1999. Smucker said the brand has "a lot of runway." Recently, the company announced plans to open a third production facility in McCalla, Alabama to meet the demand for the grab-and-go lunch. 

"We are still building out our second plant, which once that is complete and it is up and running, we will have exceeded our initial goal of a half a billion dollars in sales," the CEO told Yahoo Finance. 

A planned third plant in Alabama, expected to open within a few months "will eventually get us over to a billion dollars," he added. 

Shares of the J. M. Smucker Company are up 14.7 percent this year.

Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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