CREATING MEMORABLE MEALS & MOMENTS Caitlin Carrick Caroline Hantman Chris Harcourt Phu Son Le Jenny Robertson Huy Tran Michelle Toth November 29, 2011

CREATING MEMORABLE MEALS & MOMENTS PRESENTATION OVERVIEW Company Background Enterprise Analysis Industry Analysis Competitive Analysis Customer Analysis Enterprise Growth Strategy Options

CREATING MEMORABLE MEALS & MOMENTS COMPANY BACKGROUND The J. M. Smucker Company was established in 1897 and was incorporated in Ohio in The Company has four reportable segments: U.S. Retail Coffee Market, U.S. Retail Consumer Market, U.S. Retail Oils and Baking Market, and Special Markets. – The Company's three U.S. retail market segments in total comprised over 80 percent of the Company's net sales in – The Special Markets segment represents sales outside of the U.S. retail market Principal products of the Company are coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to- spread frostings, canned milk, flour and baking ingredients, juices and beverages, frozen sandwiches, toppings, syrups, and pickles and condiments.

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS U.S. Retail Coffee U.S. Retail Consumer Foods/Oils & Baking Special Markets International SegmentBrands

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS: U.S. Retail Coffee 35% Market Share Smucker Internal Share Report 52 Weeks Ended 1/23/11

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS: Fruit Spreads 45% Market Share Smucker Internal Share Report 52 Weeks Ended 1/23/11

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS: Peanut Butter 45% Market Share Smucker Internal Share Report 52 Weeks Ended 1/23/11

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS: Segment Performance TTM Ended January 31, 2011

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE ANALYSIS: Financial Performance

CREATING MEMORABLE MEALS & MOMENTS INDUSTRY ANALYSIS INDUSTRY TRENDS: 1.The rising cost of inputs 2.Trading down to less expensive products -generic or store brands 3.Healthy Eating & Environmental Concerns 4.Increasing demand for pre-packaged foods

CREATING MEMORABLE MEALS & MOMENTS COMPETITOR ANALYSIS

CREATING MEMORABLE MEALS & MOMENTS COMPETITOR ANALYSIS Smucker’s is better than the competition in terms of R/E, GPM, and P/E ratio. Smucker’s is behind competition in terms of ROE, and Net Income Growth. Although Smucker’s 12 month Revenue Growth is positive, 12 month Net Income Growth is negative suggesting cost management issues when compared to competition.

CREATING MEMORABLE MEALS & MOMENTS CUSTOMER ANALYSIS Largest customer is currently Wal-mart and its subsidiaries – accounted for 27% net sales in 2010 Major supermarkets within the U.S. and Canada ― representing 22% and 2% respectively Family oriented/long standing tradition End user – families and their children – “Pester power” of children

CREATING MEMORABLE MEALS & MOMENTS INNOVATION SCREENER Innovation ProductServiceChannel Business Model Branding Customer Experience ProcessPlatformMarketing Idea Market towards kids; Introduce a fun foody mascot NoYes No Yes Online suite; Ramp up online presence; ecookbooks, online ordering Yes NoYesNo Yes Leverage existing brands No Yes/No No Yes Cut out unpopular products YesNoYesNoYesNoYesNo Redesign package to hold less YesNo Yes No Reduce the size/number in a package; possibly market as “lower calories” YesNo Yes No

CREATING MEMORABLE MEALS & MOMENTS INNOVATION HEURISTIC InnovationCompany Competitive Advantage Customer Demand Mgt Support Def. of Success CanPursue IdeaFitExecuteHow* Market towards kids; Introduce a fun foody mascot Yes MaybeYes Internal Online suite; Ramp up online presence; ecookbooks, online ordering NoYes MaybeYes Internal Leverage existing brands Yes Internal Cut out unpopular products NoMaybe YesInternal Redesign package to hold less Maybe/NoYesMaybe Yes Internal Reduce the size/number in a package; possibly market as “lower calories” Maybe/NoYesMaybe/NoMaybeYes Internal

CREATING MEMORABLE MEALS & MOMENTS ENTERPRISE GROWTH STRATEGY Innovation Portfolio for Smuckers: 1)Mascot Creation & Advertising Campaign 2)Leveraging Existing Brands 3)Expanding Online Presence

CREATING MEMORABLE MEALS & MOMENTS

CREATING MEMORABLE MEALS & MOMENTS MASCOT ADVERTISING CAMPAIGN Pilot campaign will target MA, CT, and NY school buses. Advertisement revenue will narrow public school system’s budget deficits and provide Smucker’s access to target audience: Children.

CREATING MEMORABLE MEALS & MOMENTS MASCOT ADVERTISING CAMPAIGN: Outline of Expenses

CREATING MEMORABLE MEALS & MOMENTS MASCOT ADVERTISING CAMPAIGN: Financial Analysis Assumption: Year 1 sales revenue is 10% of FY 2011 Net sales Sales Revenue growth rate at 5% YOY

CREATING MEMORABLE MEALS & MOMENTS LEVERAGING EXISTING BRANDS Advertising brands on other brands – New labels that offer: Coupons for other brands in the Smucker’s family Recipes for complementary Smucker’s products Bundle as meal solutions in grocery stores – Target Stop & Stop, Market Basket, Shaw’s for dedicated space Online order management system: special occasion gift baskets

CREATING MEMORABLE MEALS & MOMENTS LEVERAGING EXISTING BRANDS: Outline of Expenses

CREATING MEMORABLE MEALS & MOMENTS LEVERAGING EXISTING BRANDS: Financial Analysis Assumption: Year 1 sales revenue is 10% of FY 2011 Net sales Sales Revenue growth rate at 5% YOY

CREATING MEMORABLE MEALS & MOMENTS EXPANDING ONLINE PRESENCE Revamp Smucker’s website to make it for fun and interactive for children – Incorporate “fun and foody” mascot – Games containing Smucker’s products/logo Online consumer panel – Allow both users and nonusers to give feedback and share ideas Recipes/cookbooks – E-cookbooks, e-recipes – Create “apps” for Smucker’s for use on smartphones and tablets

CREATING MEMORABLE MEALS & MOMENTS EXPANDING ONLINE PRESENCE: Outline of Expenses

CREATING MEMORABLE MEALS & MOMENTS EXPANDING ONLINE PRESENCE: Financial Analysis Assumption: Year 1 sales revenue is 1% of FY 2011 Net sales Sales Revenue growth rate at 1% YOY

CREATING MEMORABLE MEALS & MOMENTS ENTERRPISE GROWTH STRATEGY: Summary & Conclusion Innovation Portfolio for Smuckers: 1)Mascot Creation and Advertising Campaign — Cost = $19.75M — NPV = $11.4M 2)Leveraging Existing Brands — Cost = $21.8M — NPV = $8.8M 3)Increasing Online Presence — Cost = $115K — NPV = $2.6M

CREATING MEMORABLE MEALS & MOMENTS QUESTIONS?? Thank You