Business Philosophy at the J.M. Smucker Company

„With a name like Smucker’s, it has to be good”. Based on Smucker’s recent success and growth in the jam, jelly, preserves and marmalade industry, it would be hard for anyone to doubt that statement. The total jam and jelly sales for Smucker’s is over $1billion a year. By first chasing and then surpassing jelly giants Kraft, Inc. and Welch’s, Smucker’s now has a 37 percent share of the total jam and jelly market and is the leading manufacturer in the industry.

The J.M.Smucker Company, based in Orrville, Ohio, is a family-run operation. In 1897 Jerome Monroe Smucker decided to bring in extra income by making apple cider and apple butter from old family recipes. On the same property where today’s modern factory now stands, Jerome carefully monitored the quality of his products, personally signing the paper tied over each container of apple butter. Now, at all of Smucker’s ten plants around the country, a devotion to quality remains a key element of Smucker’s business.

Soon after Jerome began his business, other members of the Smucker family became involved. They took most of their earnings and poured them back into the company. In 1969 the Smucker family decided to take their company public. They retained 30% of the stock, selling 25% to institutions and pension funds and the rest to individual investors.

Paul Smucker (the chief executive and grandson of the founder) and his sons are not taking their number-one position in the jam and jelly market for granted. They know they must fend off foreign jam companies, as well as variety of domestic competitors. Smucker’s must also respond to the new waves of health awareness and calorie consciousness in the USA, as well as changes in consumers’ tastes.

Part of the Smucker’s strategy for keeping on top is the introduction of new products. Recently, Smucker’s has had a number of successful new entries into the market. „Simply Fruit”, a fruit with no preservatives or artificial flavours and no extra sugar added, has been well received. Smucker’s is also happy with the sales of its Fresh Pack Strawberry Preserves, available for only a few weeks each year.

The Smuckers pride themselves on innovations of all kinds. Smucker’s, sensing the coming of a trend, was the first company in the jam amd jelly industry to print nutritional information on individual product label. It was the first company to use re-sealable lids on its jars. Smucker’ even has a special „invention group” that gets together to discuss ideas. All ideas, no matter how outrageous, are encouraged. All negative comments in these meetings are prohibited.

Quality, integrity, and customer relations make up the foundation of Smucker’s company philosophy. Quality comes first, earnings and sales growth come after. Paul Smucker personally writes thank-you notes to all new shareholders. He also suggests that they tell a friend to try Smucker’s products.

Smucker’s refuses to purchase advertising time during any television show that contains violence or sex scenes. It wants to mantain its wholesome, old-fashioned image. Smucker’s also pays for full-time federal government inspectors to monitor the entire jam and jelly manufacturing process. Because of this, Smucker’s is the only company to carry the Agricultural Department’s top U.S. Grade A designation on all its products.

COMMENTARY:

Preserve (n) = a type of jam made by boilig fruit with a large amount of sugar

To chase = to catch up with sb

To surpass = to become better than sb else

Apple cider = a drink made from the juice of apples that does not contain alcohol

Plant = factory

Earnings = the profit the company makes

To pour sth into sth = to provide a large amount of money for sth

To take the company public = to start selling shares of the company on the stock exchange

To fend off = to defend or protect yourself from competitors who are attacking you

Preservative (n) = a substance used to prevent food from decaying

Outragious (adj) = very unusual and slightly shocking

Integrity = the quality of being honest

Wholesome (adj) = good for your health

Grade A designation = having the status of offering the best quality

Questions:

1. What is the business that the J.M. Smucker Company is in? Can such business be profitable in our country?

2. How many plants of this company function and where are they situated?

3. How much percent of shares did this company sell to individual investors?

4. Economists recognize 4 different degrees of competition. In which type of competitive situation does Smucker’s participate?

5. What is the Smucker’s strategy for mantainig the leading position in the industry?

6. What are the major components of Smucker’s business philosophy that have helped this organization survive for over 90 years?

7. Why has Smucker’s been able to compete against jelly giants such as Kraft and Welch’s?