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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News for more on JM.

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Speaker 2: Smucker's results were joined by the man himself, Mark Smucker.

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Speaker 2: He is the chairman, president and CEO of the company. Mark,

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Speaker 2: it's great to have you with me, and of course JM.

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Speaker 2: Smucker has been busy as we discussed. Of course, you

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Speaker 2: bought Hostess, you divested the company's Canadian condiment business, you

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Speaker 2: sold one of the snack lines, and also certain pet

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Speaker 2: food brands. When you take a look at the portfolio

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Speaker 2: right now, is it set or should we expect more

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Speaker 2: news from you?

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Speaker 3: Well, we're always evolving, Katie, Thanks for having me. We

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Speaker 3: have done a tremendous amount of work over the last

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Speaker 3: three years to reshape our portfolio to really get focused

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Speaker 3: on the brands that are going.

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Speaker 1: To drive growth.

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Speaker 3: We were very fortunate to have the opportunity to add

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Speaker 3: Hostess through acquisition. So we are very very pleased with

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Speaker 3: our portfolio right now because, as you just heard from Diana,

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Speaker 3: we are growing across all of our metrics, across all

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Speaker 3: of our categories. We have very a lot of optimism

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Speaker 3: for Hostess, and of course if you look at uncrustables, that's.

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Speaker 1: A key growth driver.

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Speaker 3: So very pleased with our portfolio, but as always, we

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Speaker 3: will continue to evolve over time.

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Speaker 2: Well, Mark, let's actually rewind a bit and talk about

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Speaker 2: the catalyst for acquiring Hostess. What was the logic there originally?

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Speaker 3: So our strategy is to lead in growing categories. We

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Speaker 3: have done very well where we've been able to acquire

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Speaker 3: leading brands in categories that are growing. Hostess is one

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Speaker 3: of those. If you think about snacking, snacking has continued

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Speaker 3: to grow. Indulgent snacking which obviously sweet baked snacks are

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Speaker 3: grows at a faster clip than other types of snacking.

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Speaker 3: So adding to our uncrustables business, which obviously has you know,

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Speaker 3: it's a higher protein offering. Adding the Hostess brand is

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Speaker 3: a perfect compliment to our snacking portfolio.

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Speaker 1: And so what else is in the pipeline for host this?

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Speaker 2: Of course, this is your first learning support since you

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Speaker 2: acquired it pretty early in the process there, But how

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Speaker 2: will you keep the pace of innovation going forward when

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Speaker 2: it comes to host this.

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Speaker 3: We've been so impressed by the Hostess innovation cycle. They

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Speaker 3: have a great team, They are able to innovate relatively quickly.

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Speaker 3: They launched a new product last year called kas Bars,

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Speaker 3: which is like a chocolate dipped sandwich type offering which

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Speaker 3: has done exceptionally well, and they really excel at seasonal

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Speaker 3: and new flavors. So is our job is to combine

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Speaker 3: the complementary natures of our business and continue to innovate

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Speaker 3: in the way that they have already demonstrated that they can.

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Speaker 2: And I do want to talk a little bit more

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Speaker 2: about pricing here because especially for a lot of the

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Speaker 2: food companies, pricing is still a big issue. Actually spoke

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Speaker 2: to the CEO of Mandalize last week and they're going

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Speaker 2: to have to continue raising prices on some of the products.

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Speaker 1: Because you just take a look at the price.

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Speaker 2: Of Coco, It's been going up for quite a while

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Speaker 2: right now. When you look across your portfolio, are you

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Speaker 2: having to increase prices still at this point or what's

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Speaker 2: the strategy?

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Speaker 3: So, first of all, we take a very prudent approach

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Speaker 3: to pricing, and our portfolio across our categories offers a

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Speaker 3: spectrum of value. So we have brands that are more affordable,

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Speaker 3: brands that are premium, so we really have something in

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Speaker 3: each category for all of our consumers. And although we

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Speaker 3: view that we are generally in an inflationary environment. Still

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Speaker 3: we pass along price declines as well, which we did

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Speaker 3: in the last six months on coffee. So we want

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Speaker 3: to just make sure that we're listening to the consumer,

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Speaker 3: focusing on their consumer needs, and being thoughtful when we

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Speaker 3: do need to take pricing actions.

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Speaker 2: So that's a really interesting point on coffee. Would you

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Speaker 2: expect to pass along more price declines on some of

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Speaker 2: your other products as well in the future.

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Speaker 3: Commodities are still volatile, so it's hard to say at

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Speaker 3: this moment in time what is going to happen. But

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Speaker 3: we really think about what our hedge position is, what

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Speaker 3: our physical costs are, and we we will move only

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Speaker 3: when we need to and in a very thoughtful and

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Speaker 3: measured way.

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Speaker 1: Let's talk about price versus volume.

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Speaker 2: As I was discussing with Diana, I mean, you're kind

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Speaker 2: of in hell higher in that you've actually been able

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Speaker 2: to increase volume here in terms of continuing that growth

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Speaker 2: that momentum. When it comes to volume, do you view

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Speaker 2: price declines as a necessary ingredient of that?

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Speaker 3: You know, I think you know the volume growth has

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Speaker 3: been driven by a couple factors. Number One, we continue

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Speaker 3: to invest in our brands. We believe very strongly that

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Speaker 3: Marketing is a key tool communicating with the consumer. We

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Speaker 3: recently turned on advertising on Encrossables, had some great partnerships

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Speaker 3: with professional athletes, and so marketing is key, but just

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Speaker 3: as important as offering that entire spectrum of value to

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Speaker 3: the consumer, whether that it's a basic milk bone biscuit

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Speaker 3: or a more premium milk bone long lasting chew. Again,

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Speaker 3: making sure that we have offerings for all types of

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Speaker 3: consumers is really key to driving that volume growth.

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Speaker 2: Well, when it comes to volume growth, I mean this

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Speaker 2: is a topic I'm really interested in.

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Speaker 1: How do you actually increase this?

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Speaker 2: How do you actually make consumers buy your product more,

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Speaker 2: which is of course always the goal. How big is

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Speaker 2: marketing spend in that push?

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Speaker 3: You know?

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Speaker 1: We it varies by category.

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Speaker 3: We generally target about six to seven percent of net sales.

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Speaker 3: And we want to make sure that our brands are

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Speaker 3: relevant in today's culture. Last year we had a great

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Speaker 3: campaign on Jiff where we involved Ludacrous, who was obviously

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Speaker 3: very hot right now with his participation in some films

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Speaker 3: and other obviously in the super Bowl recently. So making

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Speaker 3: sure that our brands can live in the contemporary vibe

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Speaker 3: that is today's culture really helps to bring those brands

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Speaker 3: top of mind for consumer and they think about that

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Speaker 3: when they go to the grocery store and they buy

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Speaker 3: our products.

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Speaker 2: I got to say, Ludacros coming out on stage during

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Speaker 2: the halftime performance, that.

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Speaker 1: Was a pretty good moment.

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Speaker 2: But let's talk a little bit more about your brands, because,

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Speaker 2: like you mentioned, it's quite a portfolio. We're talking about

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Speaker 2: Folgers to Smuckers itself to Jeff Peanut butter. As you mentioned,

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Speaker 2: where do you see the most growth going forward? When

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Speaker 2: it comes to again that offering.

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Speaker 3: The fastest growing brands are uncrustables, we can we will

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Speaker 3: continue to see double digit growth on incrustables, lots of

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Speaker 3: innovation coming a new plant in Alabama coming online this year,

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Speaker 3: Bustello will continue to grow significantly. And if you look

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Speaker 3: at our pet portfolio, double digit growth on both Meo

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Speaker 3: Mix and Milkbone in this last quarter. So there's a

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Speaker 3: lot of bright spots. And then as we've been public,

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Speaker 3: we've modeled Hostess on an ongoing rate over time at

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Speaker 3: about a four percent rate, So we really see great opportunity.

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Speaker 3: Coming back to my initial comments that we are focusing

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Speaker 3: on brands that we know we can grow and we've

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Speaker 3: shed assets that we thought would be more challenging to

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Speaker 3: grow well.

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Speaker 2: I want to talk about how distribution plays into that,

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Speaker 2: because you have mentioned, of course being able to expand

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Speaker 2: in convenience stores. In particular, which of your brands and

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Speaker 2: products do you think would work particularly well in that channel.

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Speaker 3: So with the Hostess acquisition, we inherited great capability in

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Speaker 3: convenience stores, which we have had not as much impact

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Speaker 3: in that channel in the past. We recently developed an

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Speaker 3: uncrustable that actually has a slightly longer shelf life over time,

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Speaker 3: we think there's opportunity to leverage the Hostess model and

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Speaker 3: insert products like uncrustables, like some ready to drink coffee

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Speaker 3: in the convenience channel, and likewise with Hostess, there are

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Speaker 3: plenty of opportunities to expand the footprint of Hostess in

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Speaker 3: a traditional grocery channel as well. So that again that

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Speaker 3: complementary nature and learning from each other is going to

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Speaker 3: be key to growth in the future.

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Speaker 2: And Mark, I'm sure you've been asked this question quite

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Speaker 2: a lot in the past few months. I'm going to

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Speaker 2: ask you about GLP ones. Of course, those weight loss

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Speaker 2: drugs really in the center of most conversations.

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Speaker 1: Happening right now.

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Speaker 2: How are you viewing that potential risk to your business

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Speaker 2: going forward?

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Speaker 3: So it's interesting, very The most important thing is that

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Speaker 3: we're going to listen to our consumer, right and we're

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Speaker 3: going to pay attention to what the consumer wants and needs.

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Speaker 3: We have not seen any meaningful impact from these drugs

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Speaker 3: on our business. As I pointed out earlier, the growth

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Speaker 3: of snacking broadly and more specifically, the way that indulgent

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Speaker 3: snacking is outpacing other types of snacking continues to bode

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Speaker 3: well for us.

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Speaker 1: We will always listen.

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Speaker 3: To the consumer. We have options that are smaller portion sizes,

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Speaker 3: we have options that have reduced sugar, and that's across

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Speaker 3: our portfolio, whether it's uncrustables or even in our coffee portfolio.

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Speaker 3: Making sure that we have the options available to the

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Speaker 3: consumer and that we're ultimately meeting their needs.

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Speaker 2: All right, Mark really enjoyed this conversation. Hope to speak

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Speaker 2: with you again soon. That, of course, is Mark Smucker

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Speaker 2: of JM.

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Speaker 1: Smucker