Smucker Is Ready for a Second Round of Pantry Stockpiling
(Bloomberg) -- The maker of Jif peanut butter and Folgers Coffee says it’s ready to meet another wave of grocery demand amid a new spike of Covid-19 cases.
JM Smucker Co. has shifted production to its most in-demand items while expanding operating hours and re-purposing facilities that were being underutilized. New measures to promote social distancing and stop the pandemic’s spread have sparked consumers’ renewed stockpiling.
The company and the industry are “better prepared for this second or third wave,” Chief Executive Officer Mark Smucker said in an interview. “We have been very closely monitoring our supply chain to make sure that we can meet demand. My expectation is it probably won’t be as drastic as the first wave, but we definitely see a surge in orders.”
Smucker isn’t the only company reporting growing demand. Over the last three weeks, demand for non-perishable items such as paper goods, canned goods, spices, broths and canned vegetables jumped 60% to 70%, according to Centricity Inc., a platform that tracks online activity like searches and e-commerce. Data from Adobe Analytics, which also tracks online orders, also shows a rise in purchases of items like paper products and first-aid kits.
However, many food companies now have bolstered manufacturing capacity to meet that demand. General Mills Inc., for example, added 45 external production lines through contractors this year, while Campbell Soup Co. spent $40 million to expand production of it Goldfish crackers.
This has also led to some some less popular items being harder to find than before.
Earlier Tuesday, Smucker increased its full-year sales outlook due to elevated at-home consumption of packaged food. The company now sees net sales growing as much as 2% for fiscal 2021, up from a maximum gain of 1% growth it previously predicted.
Smucker shares rose 1.6% at 10:42 a.m. in New York trading. The stock has advanced about 13% so far this year.
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