ORRVILLE, OHIO — Mark Smucker, chairman, president and chief executive officer of J.M. Smucker Co., has sketched out the food company’s plan to energize the sluggish Hostess brand during a conference call with analysts to discuss second quarter results.

J.M. Smucker finalized the Hostess Brands Inc. acquisition in November 2023 after announcing the $5.6 billion transaction about two months earlier. The deal firmly planted J.M. Smucker in the sweet baked snacks category, adding a brand roster that includes Hostess Donettes, Twinkies, CupCakes, Ding Dongs, Zingers, Coffee Cakes, HoHos, Mini Muffins and Fruit Pies. The purchase also included the Voortman cookie brand, now set to be sold to Second Nature Brands in a $305 million deal expected to close in the current third quarter.

In reporting fiscal 2025 second-quarter results, Smucker noted that J.M. Smucker was “not satisfied with the current results of the Hostess brand.” That came in the wake of his first-quarter report in which he said sales came in “below our expectations” for the company’s Sweet Baked Snacks business.

“The strategic rationale for the acquisition remains strong, and we continue to be excited about the long-term outlook for the Hostess brand and its leadership position in the sweet baked goods category,” Smucker said. “The decisive actions we are taking reinforces our confidence in 4% net sales growth for the Hostess brand over the long-term.”

Smucker attributed Hostess’ growth struggle to “two primary factors”: a wary consumer and issues with execution.

“First, consumers continue to be selective in their spending, largely driven by inflationary pressures and diminished discretionary income, causing the sweet baked goods category to recover slower than we have anticipated,” he said. “These trends are causing a reduction in all channels, inclusive of convenience. Second, we are not performing with excellence from a distribution, merchandising and competitive standpoint. We have underperformed in the channels where the consumer is shopping, resulting in lost share.”

J.M. Smucker executives have said the Hostess integration remains on track. The company reported it has begun to realize cost synergies earlier than expected and stands to achieve about $100 million in synergies by the end of fiscal 2026.

“With the integration now complete and synergies being realized, we are focusing our plans on ensuring execution in support of growing the Hostess brand,” Smucker said. “These plans include delivering the base portfolio, expanding distribution, driving innovation, continuing our portfolio evolution and establishing revenue synergies. Each of these pillars represents a key strategy to grow the Hostess brand.”

Heading the plan will be a sharper focus on driving displays, which Smucker described as a linchpin in catering to “the impulse nature of the snacking category.”

“We have commercialized several new display vehicles and are starting to gain traction in this important tool for driving consumption,” he said. “Second, we are launching a bold, new marketing campaign, leveraging our proven marketing model at Smucker. This campaign will be aimed at building cultural relevance, particularly among millennials and Gen Z, who represent a tremendous opportunity for growth. Third, as part of the brand modernization, we’re refreshing the Hostess brand packaging to make it more appealing, accessible and impactful in stores, which will increase impulse purchases and reinforce the brand’s distinctiveness in the marketplace.

“Each of these initiatives has been accelerated to begin in the first quarter of calendar 2025,” he said.

On the distribution front for Hostess, J.M. Smucker is “unlocking new channels and opportunities,” namely in food-away-from-home markets, according to Smucker.

“Our focus on distribution includes both closing gaps of our core items in our existing channels and critically entering new channels leveraging the company’s strong away-from-home sales force,” he said. “By dedicating a new sales force and exploring optimal packaging formats, we’re well-positioned to serve the evolving needs of consumers who are increasingly on the go.”

Smucker also shed more light on upcoming innovation for Hostess.

“We are going to be launching a big, fantastic new marketing and advertising campaign in the new year, which we believe will be very relevant to consumers and really speak to the emotional connection to the brand,” he said. “And that would include a packaging refresh, some innovation. We will be looking at launching a $1 pack, so we will bring in different value equations to the consumer. And lastly, we’ve had some early tests on co-promoting Hostess with some of our legacy brands – think coffee and less-discretionary brands – and early reads on those co-promotions are very strong.”

Examples of cross-promotions include a recent execution between Hostess with Jif peanut butter and Smucker’s Fruit Spreads and combining impulse purchases with non-discretionary products, such as Donettes and one of the company’s coffee brands.

“So, over the coming quarters, we would expect to see improvement in the Hostess results and just remain confident in that brand, because overall snacking trends continue to remain positive across multiple categories,” Smucker said.

For the second quarter ended Oct. 31, J.M. Smucker didn’t give year-over-year comparisons for Sweet Baked Snacks because of reporting variations with the former Hostess Brands Inc. The division posted net sales of $315.5 million and operating profit of $70.6 million, compared with $333.7 million and $74.4 million, respectively, in the first quarter. In a 10-Q filing with the Securities and Exchange Commission, Hostess Brands had recorded net revenue of $352.8 million and operating income of $43.5 million for its quarter ended Sept. 30, 2023.

“Hostess sales of $315.5 million were below their expectations,” TD Cowen analyst Robert Moskow said in a Nov. 26 research note. “We estimate a 9% decline on a like-for-like basis. Profit of $70.6 million was above our $66.1 million estimate.”