The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Investor Day (October 2018)
23 slides from The J.m. Smucker's investor day presentation, Oct 9, 2018
Slide 1: U.S. Retail Coffee
U.S. Retail Coffee Joe Stanziano Senior Vice President and General Manager, Coffee 1
Slide 2: Our Coffee Vision
Our Coffee Vision Build BELOVED COFFEE BRANDS that ignite the senses and inspire passions every day. OUR STRATEGIC PRIORITIES IDENTIFY & INVEST IN DEVELOP OFFER DRIVE COST SOLVE UNMET OUR BRANDS WORLD-CLASS DIFFERENTIATED EFFICIENCY & CONSUMER MARKETING TASTE & QUALITY AGILITY NEEDS 2
Slide 3: Why We Coffee
Why We Coffee 80% OF AMERICANS Drink Coffee 4 OUT OF 5 Cups are Consumed At-Home vs. Away $13.5 BILLION Spent Annually in the Retail Coffee, Tea and Complements Aisle 10TH LARGEST Edible Category in Retail 70% OF DOLLARS In the Coffee, Tea and Complements Aisle come from Coffee GROWING CATEGORY With
Slide 4: Coffee Consumer Segments
Coffee Consumer Segments LOYAL, Using INSIGHTS to understand the ADVENTUROUS, HIGH CONSUMPTION LOW CONSUMPTION DIVERSE HABITS of coffee consumers PREMIUMIZATION OF COFFEE BRINGING THE CAFÉ HOME ONE CUP OF THE FUTURE 4
Slide 5: Total At-Home Coffee Category
Total At-Home Coffee Category CY14 CY19 RTD 16% RTD Mainstream Mainstream 24% 19% 26% Instant 8% Instant Premium 6% 19% One Cup 25% Premium 25% One Cup 32% Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended April 30, 2014 and September 23, 2018 5
Slide 6: Smucker Coffee Portfolio
Smucker Coffee Portfolio FY14 FY19E Instant Instant 10% 8% One Cup 15% One Cup 26% Mainstream Mainstream 59% 51% Premium 16% Premium 15% 6
Slide 7: Coffee Segment Roles
Coffee Segment Roles MAINSTREAM ROAST AND GROUND 50M ✓ ✓ Highest Buyer Count Strongest Loyalty ✓ ✓ HOUSEHOLDS ✓ Brewed in Most Popular Machine (ADC) 40M PREMIUM ✓ Offers Gourmet Brands in a Roast and Ground Form ✓ ✓ ✓ ✓ HOUSEHOLDS ✓ Brewed in Most Popular Machine (ADC) 40M ONE CUP ✓ Highest Dollar S
Slide 8: Our Leading Coffee Brands
Our Leading Coffee Brands Folgers® 1850™ Dunkin’ Donuts® Café Bustelo® $1.5 BILLION ~$50 MILLION* $580 MILLION $150 MILLION ANNUAL SALES ANNUAL SALES ANNUAL SALES ANNUAL SALES Note: Retail Sales *Sales estimated based on current velocities Source: Smucker Internal Multi-Outlet Share Report 52 weeks
Slide 9: Importance of Folgers
Importance of Folgers ® #1 POSITION IN COFFEE With 26% volume share MOST TRUSTED BRAND in the entire category HIGHEST TOP OF MIND in Brand Awareness 1 in 3 COFFEE HOUSEHOLDS Purchase Folgers® Mainstream Coffee 6 MILLION of these buyers are exclusive to the brand (2x more than competition) Sources: :
Slide 10: Folgers Winning Strategy
Folgers Winning Strategy ® CELEBRATE EXPAND ACCELERATE CONSUMER THE CORE “COMPLEMENTS” ONE CUP COMMUNICATION #1 Roast & Ground Growth in all Share #1 Colombian Item #1 Instant Periods 53% OF SALES 47% OF SALES Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended September 9, 2018 10
Slide 11: 1st Folgers 1850
1850 ™ 1ST FOLGERS® MAJOR OVER-INDEXING WITH HIGHLY EFFECTIVE LAUNCH IN PREMIUM MILLENNIALS MARKETING Source: IRI Panel Data; Smucker Internal Multi-Outlet Share Report 52 weeks ended September 9, 2018; 8451 Data ended September 8, 2018; AceMetrix August 13, 2018 Ace Score (latest 2 yrs Coffee and T
Slide 12: Dunkin' At-Home Growth Continues
Dunkin’ At-Home Growth Continues $700 $600 $500 $ in millions $400 $300 $200 $100 $- FY10 FY11 FY15 FY16 FY17 FY18 FY19E Launch Launch Launch Launch Bakery Seasonals K-Cups® Cold Brew Series Note: Retail Sales Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended September 9, 2018 13
Slide 13: Dunkin' Premium Coffee
Dunkin’ Premium Coffee NIELSEN 2018 INNOVATION BREAKTHROUGH WINNER #1 SELLING #1 SELLING #1 SELLING #1 SELLING Premium Bag K-Cup® Pod Item in 5 Flavor Spaces Cold Brew Kit across 3 sizes Source: IRI Equity Tracker – May 2018; Smucker Internal Multi-Outlet Share Report 52 week dollar sales ended Sept
Slide 14: The Dunkin' Consumer
The Dunkin’ Consumer GOAL: INCREASE DUAL SHOP AND RETAIL CONSUMERS DUAL USERS ARE LOYAL & VALUABLE • More frequent trips • Higher basket/tickets, $ multiple items AT-HOME SHOP USER Households Households RETAIL AT-HOME COFFEE BUYERS 15
Slide 15: Dunkin' Breakthrough Marketing
Dunkin’ Breakthrough Marketing FIRST TINY HOME FUELED BY SPENT COFFEE GROUNDS 16
Slide 16: Dunkin' Regional Expansion
Dunkin’ Regional Expansion AT HOME PRODUCT DEVELOPMENT INDEX IS DIRECTLY CORRELATED TO SHOP PRESENCE SHOPS AT HOME • 90% of next 1,000 Shop openings outside NE • 68% of At-Home $ Sales in Northeast & South • South & West expansion focus in next • South (+12% $ sales) decade • West (+4% $ sales) Sour
Slide 17: Café Bustelo Momentum
® Café Bustelo Momentum $160 $140 $120 $100 $ in millions $80 $60 DOUBLED size of business $40 since FY14 $20 $- FY14 FY15 FY16 FY17 FY18 FY19E Note: Retail Sales Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended September 9, 2018 19
Slide 18: Café Bustelo Growth Drivers
® Café Bustelo Growth Drivers CONSUMER DISTRIBUTION & ENGAGEMENT & ASSORTMENT INNOVATION EXPERIENCES EXPANSION 20
Slide 19: Café Bustelo Brand Building
® Café Bustelo Brand Building ECOMMERCE & DIRECT TO CONSUMER LIFESTYLE ITEMS CONSUMER DIGITAL, SOCIAL MEDIA, & EXPERIENCES INFLUENCER MARKETING AWAY FROM HOME LIMITED EDITION ITEMS TIED TO ACTIVATIONS COMMUNITY SCHOLARSHIP ENGAGEMENT 21
Slide 20: Deep Coffee Expertise
Deep Coffee Expertise GREEN COFFEE RESEARCH & AGILITY IN SUPPLY CHAIN DEVELOPMENT MANUFACTURING 22
Slide 21: Green Coffee Sustainability Strategy
Green Coffee Sustainability Strategy RESPONSIBLE SMALLHOLDER ENVIRONMENTAL SOURCING SUPPORT EFFORTS 23
Slide 22: We Are Evolving to Meet Growth Areas
We Are Evolving to Meet Growth Areas GROWTH AREAS INNOVATION CONSUMER ENGAGEMENT Premium One Cup RTD 24
Slide 23: Result…Deliver on our Strategy
Result…Deliver on our Strategy PROJECTED COFFEE NET SALES GROWTH OF 2% BASE BUSINESS ACCELERATE DEVELOP PLATFORM FUNDAMENTALS & GROWTH BRANDS WORLD-CLASS INNOVATION AGILITY MARKETING 25
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