J.M. Smucker Co. Retools Brand Strategy for Natural Balance
J.M. Smucker Co. is in the midst of creating a new brand strategy for its Natural Balance pet food that will include a focus on building business in the independent channel. The move is a response to the brand’s performance results, reported Mark Belgya, vice chair and CFO of the Orrville, Ohio-based company, during a conference call with investors last week.
The company reported an 8 percent year-over-year decrease in Natural Balance sales for fiscal 2019 fourth quarter ending April 30, which was consistent with the rest of the year, Belgya said.
“The main elements [of the new strategy are] the relaunch of Ultra [and] the refocus on e-com,” said Belgya, adding that a new brand communication strategy will come later in the year.
“We are focused on in-store, a program that focuses on regaining in-store recommendations in the independent trade, and then promotion programs that bring the focus to the brand, such as our 30th year anniversary,” he added.
Despite “competitive noise” within the overall pet segment, Mark Smucker, president and CEO, said during the conference call that he is optimistic about the company’s ability to continue to “win in pet.”
“Clearly, there’s competition, but because of the breadth of the category, there is plenty of room for all of these brands to play,” Smucker said, noting that the company has fared much better than the rest of the market in terms of maintaining shelf presence.
Ainsworth, which the company acquired in 2018, contributed $200 million in net sales. The Nutrish and Nature’s Recipe brands, which showed year-over-year sales growth of 20 percent and 9 percent, respectively, contributed strongly to sales growth, according to J.M. Smucker officials.
“So, we don’t really see any reason to be pessimistic about the business,” Smucker said. “We think it’s got an incredible amount of potential.”
Within the pet food segment, net sales increased $188.7 million, reflecting the $200.8 million contribution from Ainsworth. Excluding Ainsworth, net sales declined $12.1 million, which included a $16.4 million impact related to the exit of certain private label businesses and the remaining impact from the discontinuation of Gravy Train wet dog food products.
Pet food segment profit increased 29 percent compared to the prior year, driven by the profit contributions from Ainsworth. Excluding the acquisition, segment profit declined 5 percent due to the net impact of price and cost, and increased marketing, offset slightly by lower selling and distribution, Belgya said.