Morningstar Rating

Stock Research and Analysis

by Erin Lash, CFA

Bulls Say

Smucker's strong market shares in coffee, peanut butter, and fruit spreads, among others, give retailers a strong incentive to stock Smucker products to increase traffic.
Improved employment and confidence could prompt consumers to trade back up to name brands, allowing Smucker to generate higher volume and increase prices.
Folgers' mainstream coffee business generated sales growth for several years after the recession while the premium segments have taken share and may benefit as the growing popularity of high-end and coffeehouses brings new consumers into the market. Read more 

Bears Say

Retail industry consolidation gives big-box retailers more buying power to negotiate lower prices for limited shelf-space, to the detriment of food suppliers.
Economic weakness in the U.S. could prompt more cost-conscious consumers to trade down to lower-priced private-label products.
Higher-end brands are rapidly growing in both the coffee (K-Cups, for instance) and consumer food categories, which could pigeonhole Smucker's offerings as lower end, damaging the value of the firm's intangible assets. Read more 

Management

We have assigned Smucker a Standard Stewardship Rating. Smucker has put capital to work through a number of acquisitions over the years, including its notable acquisition of the Folgers brand from Procter & Gamble in 2008. This acquisition was transformational,  Read more 

Profile

J.M. Smucker manufactures and distributes a number of category-leading consumer packaged food brands in North America, including pet food (which is expected to represent   Read more 

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