Robust sales of Folgers Coffee and Dunkin’ Donuts bagged coffee handed the J.M. Smucker Co. its most profitable fourth quarter and year.
Quarterly profit at the Orrville-based peanut butter-and-jelly maker soared 154 percent, to $94.2 million, compared with $37.1 million the previous year. That works out to 80 cents per diluted share, compared with last year’s 67 cents per share.
Not only did more consumers buy coffee at the supermarket, they bought more Folgers, America’s best-selling brand of packaged coffee.
Smucker, which acquired the Folger Coffee business from Procter & Gamble Co. in November, sold $412.6 million worth of its Folgers, Millstone and Dunkin’ Donuts coffees in the three months that ended April 30.
During that same period, Smucker sold $257.1 million worth of its namesake Smucker’s, Jif and Hungry Jack products and $185.2 million worth of Crisco, Pillsbury, Eagle Brand and Martha White products.
Tim Smucker, chairman of the board and co-chief executive, said that while more families eating meals at home helped all the company’s brands, Folger’s performance “exceeded expectations.”
The coffee category has become more crowded lately, with McDonald’s recent launch of its McCafe line of cappucinos, lattes, mochas and iced coffees.
Meanwhile, at Starbucks Corp., which is closing 961 stores around the world, profit fell 77 percent for the first three months of 2009, with fewer customers spending less per trip.
Smucker expects coffee sales to contribute $800 million to $850 million to the current year and raised its overall sales projections for the year to $4.5 billion, compared with this year’s $3.76 billion.
It’s not surprising that Smucker would benefit from fewer people dining out, said Eugene Fram, emeritus professor of marketing from the Rochester Institute of Technology.
He said that even before the recession, pollster John Zogby noticed that affluent consumers were scaling back on extra food purchases such as pricey coffee-shop coffee.
When people are worried about their jobs, they’re less likely to splurge on things they deem expendable, Fram said.
Shares of Smucker closed at a 52-week high of $47.86 on Thursday, up $4.22, or 9.7 percent, from the previous day’s trading on the New York Stock Exchange. More than four times the normal volume of shares changed hands.