J.M. Smucker also warned coffee sales will cause overall sales to fall in the full fiscal year. Fred Katayama reports.
Coffee has become acidic for J.M. Smucker. Its retail coffee sales, primarily its Folgers brand, fell again in the latest quarter. As a result, the company's sales and profit fell. It hiked prices last year as costs for its raw coffee rose, but that pushed some customers to shift to private-label brands. Smucker dominates the U.S. market for roast and ground coffee with supermarket brands like Folgers and Dunkin' Donuts. But that segment has been shrinking. Customers are shifting to single-serve coffee because they find that more convenient and economical. Smucker doesn't see the outlook for coffee perking up any time soon. It projects softer coffee sales will cause overall sales to fall nearly three percent in the fiscal year ended April. Smucker's consumer foods didn't fare well, either, with sales of Jif peanut butter and Crisco shortening slipping. The company is now in the midst of moving in to the fast growing pet food market by acquiring the maker of Meow Mix and Milk Bone, Big Heart. Smucker's stock, which has outperformed the broader market over the last 12 months, fell in early trading. Smucker's not the only food maker reporting a tough quarter. Kraft and Kellogg lost money, and ConAgra cut its profit forecast for the year.