JM Smucker said it would sell its packaged pastries brand Cloverhill and cinnamon rolls label Big Texas to packaged food maker JTM Foods for about $40 million (€39.1 million), as the company looks to cut costs in its sweet baked snacks segment.
The divestiture, which also includes some of the Jif peanut butter maker's private-label products, would help it focus on growing Twinkies-maker Hostess Brands, which the company acquired in 2023.
"This decision continues the ongoing work to ensure our manufacturing network is optimised to mitigate costs and reduce complexity," said Dan O'Leary, senior vice president and general manager of the company's sweet baked snacks and pet products unit.
Choppy Demand
Like other packaged food firms, JM Smucker has been countering choppy demand from consumers as they temper spending on snacks and sweets and switch to healthier snacking options.
The sweet baked snacks segment formed 13.9% of the company's total net sales in the second quarter of fiscal 2025, reported in November.
JM Smucker expects its full-year net sales from the divested brands to be about $60 million (€58.6 million). The transaction is likely to close in the fourth quarter ending 30 April.
Smucker's US retail coffee business saw sales in the second quarter rise 3% to $704 million (€687.20 million). Overall quarterly margins to rise 39% from 37.4% a year earlier.
The Dunkin' coffee maker's results came in contrast with packaged food peers Kraft Heinz and Conagra Brands, which reported disappointing sales as customers traded down for cheaper alternatives.
The company posted net sales of $2.27 billion (€2.2 billion) for the second quarter, compared with analysts' average estimate of $2.26 billion (€2.2 billion), according to LSEG data.
