Dive Brief:
- J.M. Smucker has created a Transformation Office to focus on continuous improvement strategies, helping it create a pipeline of productivity initiatives and profit growth opportunities.
- Amy Held will lead the office as chief transformation officer. Held previously served as chief strategy and international officer at Smucker. She will continue to oversee strategy while the company finds her replacement.
- The maker of Folgers, Jif and Uncrustables is targeting profit growth as it seeks to move beyond ongoing supply chain struggles, inflationary pressures and a massive product recall that have battered margins.
Dive Insight:
The creation of the Transformation Office is the latest effort by the CPG to get ahead of what President and CEO Mark Smucker has called “a challenging and dynamic environment.”
This past June, Smucker reported that fourth-quarter gross profits had fallen 9%, weighed down by its voluntary recall this summer of Jif peanut butter. The company estimated the recall would cost $125 million in product recovery, manufacturing downtime and consumer refunds.
Smucker has also been wrestling with rising ingredient, packaging and manufacturing costs, although price increases have helped offset much of these in the most recent quarter, the company said.
At a presentation during the recent Barclays Global Consumer Staples conference, Smucker CFO Tucker Marshall said the company had worked through most of the Jif recall impact “and the balance is now beginning to shift in favor of some tailwinds.” Smucker’s recent portfolio optimization, with four recent divestitures, including its natural beverages and grain business, has allowed the company to focus on and invest in core brands with massive growth opportunity, such as Uncrustables. The Transformation Office gives Smucker an opportunity to supercharge its comeback efforts and bake in accountability.
Held will lead a cross-functional team to develop “new ways of working” and “sustainable efficiencies,” maximize cost reduction and establish the ability to track, measure and report on the efforts, according to Smucker. The Transformation Office was in the initial stages of identifying and evaluating these opportunities, and would share more details at its Investor Day in December, Marshall said.
“Our teams have done an incredible job of navigating sustained external pressures. As these challenges endure, we must be proactive in addressing their impact to support both near-term performance and long-term growth potential,” Mark Smucker said in a statement. “The introduction of the Transformation Office will help ensure the continued momentum of our strategy, which has supported the tremendous results our business has delivered, by sharpening our focus on driving productivity and unlocking cost savings.”
