JM Smucker announced on Friday the sale of its packaged pastries brand, Cloverhill, and its cinnamon rolls label, Big Texas, to packaged food manufacturer JTM Foods for approximately $40 million. This strategic move aims to reduce costs within Smucker’s sweet baked snacks segment and streamline its portfolio.
The divestiture also includes some of Smucker’s private-label products, further solidifying the company’s focus on the growth of Hostess Brands, acquired in 2023. This decision aligns with Smucker’s broader strategy of optimizing its manufacturing network for cost efficiency and reduced complexity.
Dan O’Leary, senior vice president and general manager of Smucker’s sweet baked snacks and pet products unit, emphasized that this divestiture is part of an ongoing effort to optimize the company’s manufacturing operations. By streamlining production and focusing on key brands, Smucker aims to enhance its competitive position in the market.
This move comes as packaged food companies face fluctuating consumer demand, with spending on snacks and sweets tempered by economic uncertainty and a growing preference for healthier alternatives. Adapting to these shifts in consumer behavior requires strategic portfolio adjustments and a focus on cost management.
In the second quarter of fiscal 2025, reported in November, the sweet baked snacks segment contributed 13.9% to Smucker’s total net sales. The divested brands are projected to generate approximately $60 million in full-year net sales. The transaction is anticipated to conclude in the fourth quarter, ending April 30. This divestiture allows Smucker to reallocate resources towards higher-growth areas within its portfolio. By shedding these brands, Smucker can concentrate on strengthening its core offerings and capitalizing on emerging market trends. The sale to JTM Foods positions these brands for continued growth under new ownership while allowing Smucker to sharpen its strategic focus. The transaction underscores Smucker’s proactive approach to portfolio management in a dynamic consumer landscape.
In conclusion, JM Smucker’s divestiture of Cloverhill and Big Texas to JTM Foods for $40 million reflects a strategic decision to optimize its portfolio, reduce costs, and enhance its focus on core brands like Hostess. The move comes amidst evolving consumer preferences and economic conditions within the packaged food industry. The transaction is expected to close by the end of April.
