J.M. Smucker plans to build a third manufacturing facility for its Uncrustables snack sandwiches as the US firm seeks to double sales of the brand over the next five years.
The Ohio-based business is investing US$1.1bn in the production and distribution site in McCalla, Alabama, with construction set to begin in January ahead of an expected completion date in 2025.
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By GlobalDataJ.M. Smucker said sales of the Uncrustables brand featuring frozen spread-filled sandwiches and snacks have increased double-digits a year over the past decade and now stand at around $500m. The business is aiming to reach $1bn in sales in the next five years. The project will create 750 jobs over a three-year time span.
The group, which also includes brands such as Jif peanut butter and Sahale Snacks, generated sales of a tad over $8bn in the year ended 30 April.
President and CEO Mark Smucker said: “Our Smucker’s Uncrustables brand continues to be one of the fastest-growing in our portfolio and in the food sector more broadly. Not only will the company’s growth project create a large number of jobs in McCalla, but it will also permit us to build a long-standing relationship with a top consumer brand.”
J.M. Smucker’s two other Uncrustables production facilities are located in Scottsville, Kentucky, and Longmont, Colorado.
Last year’s sales growth represented an increase of 3%, while net income was up 12% at $876.3m. The company cut its forecast for underlying annual earnings in August when it reported first-quarter results for the new financial year.
Adjusted earnings per share are expected between $8.25 and $8.65, versus a June estimate of $8.70-$9.10. The metric fell 20% in the quarter to $1.90.
Sales were revised with a more positive tone. Smucker forecasts a drop of 1.5% to 2.5%, compared with a June estimate of a 2-3% decline. They were down 6% in the three months to 31 July at $1.86bn.
Operating income dropped 28% to $259.4m and was down 20% on an adjusted basis at $323.4m.
