According to the U.S. Census Bureau, a record 46.2 million Americans are now living below the poverty line, as more and more people fall out of the middle class. For many companies, a shrinking middle class means a shrinking top line, as their traditional consumer base migrates to the lower end of the market.
But not for the J.M. Smucker Company.
The 114-year-old outfit, based in Orville, Ohio, now sits at #2 on this year’s Barron’s 500, which ranks publicly traded companies purely according to growth metrics — not revenue itself but changes in sales, profits, and return on investment. This accomplishment is even more impressive when you consider that Apple is #4 on the list.
Smucker’s? That’s right — the outfit best known for selling peanut butter and those iconic jars of jam that haven’t changed much since the company was founded in 1897. How did such an old-school consumer brand company make it near the top of a list of hot growth firms?
The numbers are there. Smucker’s impressive annual results cap a decade in which the 4,500-employee firm achieved compound annual revenue growth of 23% and per-share earnings growth of 14%. Shareholder returns matched profits exactly, at a compound 14%. For 2011, it all added up to $4.8 billion in sales. That’s a lot of PB&J.
According to chairman and CEO Timothy Smucker, 67, who is now stepping down to hand the jars to his younger brother Richard, 63, “Volume gains in the fruit spreads category were supported by investments in advertising and product innovation.” This is a company where synergy really matters, as jelly growth led to “strong peanut butter performance.”
But a closer look at Smucker’s reveals a powerful set of growth strategies driving these results.
Robyn M. Bolton is a principal at Innosight.