J.M. Smucker To Sell Milk Company
J.M. Smucker Co., an umbrella company best known for Smucker’s jam, Folgers coffee, and Jif peanut butter, has announced that it will be selling its U.S. canned milk business, Eagle Foods Co., to Kelso and Co., reportedly due to the declining nature of the industry.
Smucker stated that the manufacturing facilities in El Paso, Texas and in Seneca, Missouri, would both be included in the deal, and the company also owns a canned milk business in Canada, which is expected to close by the end of this year.
Eagle Foods sells both branded and private label sweetened condensed and evaporated milk, and although the selling fee remains undisclosed, Smucker had bought Eagle Foods back in 2007 for a total of $248 million, including debt. Smucker announced:
“Although Eagle Brand fits nicely within our strategy and vision of owning and marketing leading brands, the larger part of the business is private label, which is outside of our strategic direction and scope.”
The announcement comes during the industry-wide drop in dairy sales in the United States. Costs for dairy have been low, with the rising domestic supply in China and Russia’s ban on importing any dairy products from the U.S. contributing to the prices.
According to the report from Reuters, Smucker’s shares went down by 1.3 percent in morning trading, with a 1 percent fall in the broader consumer staples index.
Speculations are being made that the conglomerate opted to sell its dairy holdings as a result of the declining dairy industry, which comes as a result of many factors, such as exaggerated or dishonest health claims, and consumers opting for plant-based alternatives.
From 2009 to 2014, dairy-free milk sales had rose nearly 94 percent. With numbers like that, we may soon see J.M. Smucker deciding to buy in this market instead!