The J. M. Smucker Company (SJM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the J.M. Smucker Company Investor Day. Please welcome to the stage Mark Smucker, Chair of the Board, President and CEO.

Good morning. How is everyone today? Good. All right. Well, we're excited. And as we go through the day, my hope -- and I think I'm pretty confident about this, is that you all should leave excited as well about the progress that the company has made as well as the path forward. So it's great to be here with you for our 2022 Investor Day. And just wanted to thank everyone for joining us here in New York as well as the many folks that are joining us online. During our comments today, we will make forward-looking statements that reflect the company's expectations about future plans and performance. As you know, these statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. Additionally, please note that the company uses non-GAAP results for the purpose of evaluating performance internally. Further details on these items can be found within today's presentation. Before we begin, I want to provide a brief overview of the agenda. I will provide some comments on our strategy, our continued transformation and the key elements that position us to win over the long term. You will also hear from my outstanding executive leadership team and the leaders of our pet food and pet snacks, coffee, and consumer foods business segments. Finally, we have allocated time for a Q&A session after our prepared remarks, and the leadership team will be available to answer questions during lunch. The team and I are very excited to share our plans for the future of this company and how we will deliver on our vision to engage, delight and inspire consumers by building brands they love and leading in growing categories. Today, we will discuss how we have positioned the J.M. Smucker Company for growth over the long term through our strategic transformation and our unique strengths. Before we look forward, though, let's take a brief look at where we have been and the foundation that we have built for success, as this year marks our 125th anniversary of the company's founding. [Presentation]

It's hard to imagine a business that produced and sold apple butter in a small community 125 years ago would transform into one of the leading consumer packaged goods companies in the world with over $8 billion in annual sales. It's estimated that less than 0.5% of U.S. companies stay in business for 100 years or more. And I'm excited to have the opportunity to lead our company and continue this long history of success. At Smucker, we are powered by our steadfast dedication to the values that define us and a passion for delivering on the needs of all our constituents. Over the years, we made bold acquisitions that added iconic brands to our portfolio. The acquisitions, combined with our ability to capture synergies, build brands consumers love and operate with excellence, has resulted in total shareholder return above the S&P 500 and peer group averages. Looking ahead, we have even higher ambitions for the company and are confident we are well positioned for long-term growth. With that spirit of future forward thinking and continuous improvement, 2 years ago, I challenged my new leadership team to assess the realities of our business performance and our execution. The goal of this work was to ensure we are best positioned to win over the long term. We took a hard look at where we compete and how we can leverage our strengths to win with our customers and consumers across our core categories. We also made the difficult decisions to exit businesses that no longer fit within our key focus areas and growth opportunities while also working to streamline the business and improve profitability. This effort became the springboard for our refreshed strategic plans, and I'm proud to report that we have and are delivering on those plans. We have fundamentally transformed how we execute our strategy, guided by the 4 priorities that we outlined 2 years ago, driving commercial excellence, streamlining our cost infrastructure, reshaping our portfolio and unleashing our organization to win. Since then, we have significantly improved our commercial capabilities to place greater focus on the consumer and customer and truly delivering what they need and want. As a result, we engaged a new agency to transform our advertising creative, increase our consumer reach and reduce our nonworking marketing costs. We also transformed our commercial delivery to improve how we partner with retailers. This included creating 2 distinct sales organizations: One, focused on pet food and another on our human food and beverage businesses. Lastly, we also improved our in-store execution through proprietary digital insights and further evolve our e-commerce model as our percent of sales from this channel grew from mid-single digits to low double digits over the last several years. Most importantly, these efforts have significantly improved our market share performance. Today, 71% of our portfolio is growing or maintaining market share compared to just 39% in 2019. We streamlined our cost infrastructure centered on a pervasive mindset of continuous improvement, a focus on value creation and operational efficiency. We maintained business continuity through the pandemic by demonstrating resilience and agility. Our teams took initial steps to optimize our supply chain and reduce complexity, including the consolidation of production sites, and we have identified significant additional opportunities to maintain and strengthen operating margins. We are on track to achieve the cost reduction goals that we established 2 years ago of $50 million annually from 2021 through 2023, which has helped mitigate the impact of significant cost inflation. We reshaped our portfolio with 4 divestitures over the last 2 fiscal years and reallocated resources to drive faster growth. These decisions reflect our commitment to divesting brands and businesses that are no longer consistent with our long-term strategic focus. In turn, this allowed us to optimize assortment to reduce complexity, maximize productivity and prioritize resources to our fastest growth opportunities, ensuring the strength of our portfolio through both acquisitions and divestitures continues to be a key part of our strategy. Lastly, we unleashed our organization to win. The strength of the Smucker culture has always been a unique differentiator and is a critical component of our successful path forward. We needed to evolve to be more agile and focused on delivering with excellence and winning in the marketplace. Our structure is now leaner and flatter with incentives aligned to the common goal of driving both sales and profit growth. And with changes we have made in key leadership roles, we're confident we have the best team in the industry with exceptional expertise across our categories. Our most valuable asset is our people, and we recognize that we must have the very best talent across our organization to win in the categories, in which we participate. We continue the important work to nurture and invest in our culture to ensure it remains a competitive advantage. We are also making progress on our commitment to improve diversity and foster inclusion and equity. And in addition to strengthening our company, we believe an inclusive environment and diverse organization enables every employee to reach their full potential. While our strategy is still the same, we are further refining the focus for our strategic pillars, which now include driving prioritization and best-in-class execution, improving profitability and cost discipline, transforming our portfolio, nurturing and investing in our culture and improving diversity and fostering inclusion and equity. These strategic priorities will continue to guide the transformation of our business and our strategy of leading in the attractive categories of pet, coffee and snacking is driving results. Critical to appreciating the full scope of our transformation is how we have positioned ourselves for continued growth. This is enabled by several foundational elements, the strength of our categories, our portfolio of leading brands, our commercial capabilities, our supply chain management and our company's purpose. First, our categories. We have positioned ourselves in 3 of the most attractive and resilient categories in the food space. The pet category continues to grow with more pets and pet parents than ever. For context, dog and cat ownership have both increased by 10% since 2019, which equates to approximately 5 million new households for each. The total category has grown at an 8% CAGR over the past 5 years and is projected to grow 4% to 6% annually over the next 5 years. As the pet population has grown, so has the trend of pet parents viewing pets as true members of the family, and consumers are investing in their pets as such. In fact, 67% of pet parents prioritize their pets over themselves. The special bonds between pets and pet parents have driven treating and the continued premiumization of the pet category, which has been a key contributor of growth. Our portfolio provides offerings across the value spectrum, including premium, mainstream and value products. This allows pet parents to cater to their pet's every need at a price point that works for them. As a result, the pet category is one of the largest and fastest-growing center-of-store categories, and we are well positioned to capitalize on the future growth of this category. Next, the coffee category remains incredibly strong, as coffee consumption in the U.S. is at a 2-decade high. On average, 2/3 of Americans over the age of 18 drink coffee. The retail coffee market is positioned for continued growth as macroeconomic conditions and changes in consumer habits all largely benefit at-home coffee brands. With increased consumption of at-home coffee throughout the pandemic, consumers have invested in upgrading their home coffee bars. In fact, 17 million new at-home brewers were sold over the last 3 years. At-home coffee remained strong with consumption now representing 70% of all coffee-drinking occasions. This rise in at-home coffee experimentation, along with the growing influence of social media on coffee culture, underscores that the category is continuing to evolve, centered around greater at-home consumption and new formats, leading into what is considered the fourth wave of coffee. The journey the category has taken will continue to evolve from the first wave in the 1800s with accessible coffee for the masses with brands like Folgers to the rise of coffee shops and craft coffee in the second and third waves in the late 1900s and early 2000s. We are confident in our ability to adapt to this next wave or fourth wave, as we have always done historically. Given our size and expertise as the #1 at-home coffee manufacturer in the U.S., we are well positioned to capitalize on emerging trends with our world-class coffee knowledge and sourcing capabilities. And in consumer food categories, snacking, macro trends and new eating behaviors continue to benefit our business, which is focused on convenient, low preparation and on-the-go options. The culture of snacking in the U.S. has changed dramatically. Around 1/3 of consumers say they snack more often compared to 2019, and approximately half of all food and beverage occasions are snacking occasions. Snacking is now a $150 billion market in the U.S., and it is projected to continue to grow. Diving deeper into frozen snacking and sandwiches, a key focus area for us, the category is expected to reach $9 billion by 2026, reflecting growth of nearly 20% from today. This will be driven by the category's broad reach across multiple eating occasions, the consumers' continuing exploration in flavors and variety and the categories' attributes of versatility and convenience. Consumers turn to frozen to make their lives easier to navigate from options that can be eaten as small meals, as a component of a larger meal or even as a snack. Long-term cultural and macro shifts will continue to significantly shape how American consumers snack for years to come. And we believe our portfolio is well positioned to capture this growth and gain share. Our next foundational element is the strength of our portfolio of leading brands. We are proud to offer brands that consumers rely on for themselves and their families every day. In fact, over 80% of U.S. households buy our brands. The trust and loyalty, we have earned, has allowed us to offer a portfolio of brands, growing or maintaining dollar share at a rate that is well above best-in-class performance. It has also allowed us to continue to lead. Approximately 80% of our U.S. retail sales come from categories where we hold the #1 or #2 branded position. Nearly 90% of consumers say that authenticity is a key factor when deciding which brand to support, and that's what we have developed, a portfolio of trusted and iconic brands. Throughout our history, we have been brand-builders. It's in our core. And our ability has only grown stronger through our third foundational element, our commercial capabilities. We have evolved our brand-building expertise with significant changes. And today, our brands have never been stronger. We have built a model that delivers a consistent and proven approach to building brands and driving profitable growth. Our integrated framework, which we call our brand growth flywheel, is powered by consumer and shopper insights and drives growth through omnichannel marketing, innovation, customer partnerships and revenue optimization strategies and sales execution. Geoff Tanner, our Chief Commercial and Marketing Officer, will discuss this in more detail, but the key is that we have created a proven model that we are able to leverage across our portfolio. This allows us to both successfully reinvigorate mature brands and accelerate growth for newer ones. For example, the iconic Milk-Bone and Meow Mix brands as well as the emerging Café Bustelo brand all grew double digits last fiscal year, benefiting from the full implementation of our consumer-centric brand-building approach. This growth was also supported by our ability to maintain availability on shelf. Despite significant challenges over the past few years, our supply chain management and manufacturing teams have executed with excellence. The size and scale of our supply chain is a competitive advantage in the food industry. And while inflation has driven costs higher across the entire supply chain, we have embarked on an aggressive productivity agenda that will span across the entirety of our businesses and supply chain to support margin expansion. Our new Chief Transformation Officer, Amy Held, will outline details of this initiative later this morning, including how we plan to advance cost management and margin improvement opportunities. Our reach goes beyond our facilities and people. We are committed to responsible sourcing and see competitive advantages in the work we do for the good of the planet. As an example, our coffee sustainability strategy is focused on supporting the small holder coffee farmers, who deliver green coffee and support the healthy expansion of the supply chain. We work with several leading organizations that provide training to small holder farmers on improved agricultural methods. This work helps farmers to improve green coffee quality, average yields, climate resistance and farmer livelihoods, leading into our final foundational element, our people and our purpose, feeding connections that help us thrive. Life tastes better together. We are committed to making a meaningful impact on the lives of those who count on us. This purpose is embedded in our Thriving Together agenda that focuses on issues impacting the quality of life for people and pets, specifically in the areas of quality food, education, equitable and ethical treatment for all, connections to community resources and a healthier planet. As I have often shared, we believe it is our responsibility to support our employees, our consumers, our customers, our communities and our planet. And if we do that, we will deliver the long-term value our shareholders expect. Each of the elements I outlined this morning will be discussed in more detail by my leadership team. And as I stated in my opening remarks, we are excited to share our confidence in our ability to continue delivering results and future growth through our key platforms, including Uncrustables, pet snacks and cat food, our coffee portfolio and its expansion into new formats and continued transformation to restore margins and fund investments for future growth. At the end of the day, I hope you will walk away with an understanding of Smucker as a compelling investment opportunity, belief in the strength of our strategy, vision and culture and trust in our path to sustain long-term growth and increase shareholder value. This past year, like the 124 before it, our success has been defined by our ability to execute not only on our financial goals, but also deliver for those who count on our business. We have become a stronger company, a more agile organization and an even better leader in the communities where we live and work. And together, we will continue to deliver on our commitment to achieve long-term growth while making a meaningful positive impact in the world and on the lives of those who count on us. With that, I'll turn it over to Jill.

Thank you, Mark. Good morning, everyone. I'm Jill Penrose, Chief People and Administrative Officer, and I'm excited to share more details related to our environmental, social and governance or ESG initiatives with you. To begin, I will provide a brief overview of our ESG framework, dive deeper into the social aspects at Smucker and then Jeannette Knudsen, Chief Legal Officer and Secretary, will discuss progress we've made related to our environmental and governance aspects of our ESG program. Our ESG framework illustrates how we can make a meaningful environmental and social impact for those who rely on us and ensure that we are governing our company in a way that is ethical, safe and equitable, guided by our purpose, feeding connections that help us drive life tastes better together. Our ESG efforts are served through our Thriving Together agenda. This focus is on issues impacting the quality of life for people and pets specifically the needs of quality food, education, community resources, equitable and ethical treatment for all and a healthier planet. Today, I would like to highlight some of the progress we've made related to our inclusion, diversity and equity, or ID&E initiatives, our community and philanthropic impact and our employee engagement and workforce. At Smucker, we strive to celebrate the unique aspects of each employee and draw upon a wide range of diverse experiences and perspectives. It is through an inclusive and diverse workforce that we can strengthen our company and enable each employee to realize their full potential. Here is a bit more about our ID&E vision, the work we have undertaken to get us here and the aspirations driving us forward. [Presentation]

At our previous Investor Day, I outlined new efforts we were launching to advance ID&E at Smucker. I am pleased to share that we've made tremendous progress in this area over the past 2 years. First, we formalized our Advocate Alliance, which is a network of employees who champion inclusion, diversity and equity efforts across all our geographic locations. We also introduced 7 employee resource groups to foster inclusion and support underrepresented individuals in our workplace. We are inspired by the passion of the employees leading these groups and are confident that their respective visions make Smucker a stronger organization. These groups have made a significant impact, and we look forward to how their efforts will continue to create positive change within our organization and broader communities. Secondly, we have coordinated more than 8,500 hours of employee programming on IDE education and understanding, hosted panels to reflect the unique experiences of minority groups and shared regular content to celebrate our differences and increase cultural awareness. Lastly, this year, we established clear ID&E aspirations to support continued progress on ID&E and our vision. This includes enhancing workplace diversity, where we have the aspiration to double the representation of people of color and meaningfully improve our representation of women in senior level roles within our U.S. salaried employee community by 2027. These aspirations will build upon the foundation we have already built within our organization, including the Advocate Alliance, employee resource groups and excellent representation of women. Notably, 50% of our total salaried workforce and 40% of our executive leadership team is comprised of women. At Smucker, we are dedicated to fostering a diverse and inclusive workforce to serve our employees, our consumers and build competitive advantage, cultivating a workplace that seeks diversity of thought, integrated thinking and represents the consumers we serve leads to the best decisions, performance and long-term shareholder value. In the U.S., underrepresented populations are rapidly growing and expanding to new parts of the country to help us better understand the needs of our consumers and how we can most effectively engage them through our brands, we must have diverse talent and strategic partners who help us expand awareness across all aspects of our business. We also strive to ensure we create content and use platforms that resonate with our evolving consumer base, ensuring we continue to have culturally relevant brands and understand how to best serve our consumers is key to our future growth. Moving to our impact outside of our company. We remain committed to supporting the communities where we live and work through volunteerism, financial donations and making important connections to necessary resources. The way we support our communities is guided by our Thriving Together agenda, which helps us ensure we are maximizing our resources to support areas we are best equipped to support. We support long-time partners, including the American Red Cross, United Way, Feeding America and Habitat for Humanity. And we've recently renewed donations of $500,000 to organizations who support underrepresented groups. Lastly, our genuine and strong focus on people enables us to be a highly sought-after employer within our communities where we operate and creates a unique competitive advantage for our company. Through our interconnected approach to supporting professional, physical, emotional and financial well-being, we attract and retain the best people. When our people are supported and inspired by the role they play, they go above and beyond for our consumers, customers and communities, making us a stronger company. Like many other companies, we've experienced a challenging labor market over the last 2 years, but we have set ourselves apart by working through these dynamics with executional excellence. We acted with agility and flexibility to mitigate labor shortages in a multitude of ways, and we're able to supply product to our customers when others could not. We did this by swiftly adapting our recruiting and hiring of tactics to be in line with the aggressive and competitive nature of the labor market. At our operating locations, we established a talent surge team that shifted resources within our HR department to provide location-specific resources and on-the-ground support. These changes allowed plant managers to stay focused on manufacturing product, as we experienced unprecedented demand from our customers and consumers. To further support our facilities, we moved experienced leaders to critical manufacturing locations to ensure business continuity and risk mitigation. As a result, all our production sites remained operational throughout the pandemic. We have returned to target staffing levels at almost every manufacturing site and candidate pools are improving in even our most challenged sites. At our corporate office, we have introduced a hybrid workplace model that allows our employees flexibility while retaining face-to-face collaboration with purposeful in-person presence. This balanced approach has allowed us to attract and retain talent across our organization. As I conclude, I would like to thank our people for everything they do to support our company. From the incredible efforts of our operations teams, especially during the pandemic to the dedication from our corporate and sales workforce, it is our employees' passion for the business and genuine care for each other and all our constituents that makes our culture unique. Throughout our organization, we create strong brands that foster teamwork, collaboration, a commitment to quality work and a focus on continuous improvement, all of which creates a competitive industry advantage over the long term. With that, let me turn it over to Jeannette to discuss the environmental and governance elements of ESG. Thank you.

Thank you, Jill. Good morning, everyone. I'm Jeannette Knudsen, and I'm the Chief Legal Officer and Secretary for the company. I'm pleased to be with you today to share a little bit more about our ESG efforts, particularly our environmental and governance practices and how they've evolved over time to enhance our business. Starting with our corporate governance, we have enhanced our Board succession planning process, increased our director diversity, implemented more shareholder-friendly policies and practices and improved our ethics and compliance policies and programs. With respect to environmental activities, we have integrated sustainability considerations and practices throughout our operations. We've increased oversight, and we cultivated deep levels of expertise within our organization. We placed a strong focus on our governance practices and continually evaluate them, taking into account the evolving expectations and perspectives of our shareholders. We consider the skills of individual Directors and overall board makeup to ensure we have the appropriate expertise to fulfill the Board's responsibilities and to help us meet our strategic objectives. This includes the Board's succession planning activities, including our recent Director rotations that we executed, where we rotated several members of our committees and appointed all new committee chairs. We also strive to create Board diversity in a multitude of ways. One way is to ensure that our Directors have a wide range of skill sets and expertise, which offer different perspectives that help us make better decisions within our organization. Another way is that we regularly consider new director candidates. And since 2017, we have added 5 new Directors to our Board. These members bring diverse background and expertise, and they leverage those to provide unique insights to us. We also ensure that we balance the tenure of our Directors to maintain continuity of knowledge on our Board. The expertise of our Board and the strength of its counsel is enhanced by the diversity of its leadership. All of our committee chair positions are currently held by women, and our Compensation Committee Chair and Lead Independent Director positions are held by racially diverse individuals. Additionally, we have evolved our governance practices to be more shareholder friendly. Recent changes include implementing proxy access, eliminating our poison pill and removing preferential tenure voting in favor of 1 share, 1 vote on all matters. And lastly, all of our directors are evaluated and elected on an annual basis. Moving on to the area of ethics and compliance. We continually work to improve and evolve our practices, not only to ensure compliance with laws and regulations but also to ensure we provide consistent and equitable support of our employees. Our compliance improvements have included the expansion of our ESG Governance Council, which is comprised of key leaders across to all areas of our business, who are responsible for evolving our ESG strategy and efforts. Progress on these strategies are reported to the counsel, leadership and the Board. Our executive compensation committee holds our leaders accountable for achieving ESG goals. We recently shared that 10% of fiscal 2023 short-term incentive compensation for all employees above the senior director level is based on the achievement of ESG objectives. In 2021, we conducted an ESG issues assessment to understand how best to prioritize our resources and improve our efforts to create the most meaningful impact. We are proud of our continued operational excellence and commitment to ensuring the sustainability of our supply chain. We have demonstrated this through our strategic investments and our suppliers' ability to continuously deliver the quality ingredients used in our products and our continued commitment to ethical and responsible sourcing. This includes communicating our expectations with regard to labor practices and human rights, business integrity and responsible environmental practices to all of our suppliers. It also includes reinforcing our animal welfare policy to reflect our commitment to not conduct or sponsor any harmful animal testing, ensure the humane treatment of animals in our supply chain and improve the lives of pets in Canada and the United States. And also steadily expanding our global responsible sourcing program to enhance collaboration across the supply chain, streamline processes, engage internal and external stakeholders and launch a training module available to all suppliers. One example of our work in this area is to support developmental programs for coffee farmers. We are a founding member of World Coffee Research, an organization leveraging science to support supply chain sustainability. The group has recently launched a global coffee breeding network to accelerate the pace of genetic improvement to address environmental conditions that impact the availability of different coffee varieties. We continue to make progress on our part by addressing climate change, ensuring responsible stewardship of natural resources and improving the environmental footprint of our operations. We are supporting this with a focus on 4 elements of environmental stewardship: Renewable energy, energy efficiency, water efficiency and landfill avoidance. Thus far, we have expanded our renewable energy commitment in our virtual power purchase agreement with the Plum Creek wind farm in Nebraska. And we've recently joined the first group of suppliers to participate in Walmart's Renewable Energy Accelerator for the Sunflower wind farm to be constructed in Kansas. These projects together are anticipated to match 100% of our total company electricity use once complete. We continue to evaluate and implement more energy and water-efficient production processes across our manufacturing footprint to support our environmental impact goals. And we participated in the Climate Corps program through the Environmental Defense Fund and Reefed to support landfill avoidance and reduce waste in our supply chain. Integrating a sustainability mindset across our operations reduces our impact on the environment, it is also critical to maintaining business continuity and reducing risk and it also serves as a valuable tool for delivering cost savings to our businesses. To enhance transparency on our progress against these key environmental and social objectives, we report annually on our metrics using leading practices such as SASB and TCFD. Our continued progress and achievements are publicly reported in our annual corporate impact report, which is a great resource for individuals seeking to understand more about our commitments to ESG. Lastly, we have a fantastic team. They have deep expertise, passion and dedication to ESG activities. We are well positioned for an environment where ESG is a key contributor to our ongoing success. For additional information regarding some of the items that I've shared with you today, I encourage you to visit our corporate website. In conclusion, I would like to emphasize the importance we place on ESG at Smucker and our passion for making meaningful impact across all of our focus areas. We believe focusing on responsible ESG practices and integrating our efforts cross-functionally throughout our organization provides us with a competitive advantage and supports our long-term growth. With that, I will turn it over to Geoff Tanner, our Chief Commercial and Marketing Officer, who will discuss our continued enhancements we've made to our commercial operating model. We thank you so much for your time today.

Thank you, Jeannette. Good morning. My name is Geoff Tanner. I'm the Chief Commercial and Marketing Officer. As Mark noted in his intro, the Smucker Company has undergone several major transformations. We established leading positions in attractive categories, coffee, pit and frozen snacks, and we have amassed a portfolio of brands with strong #1, 2 and 3 positions. More recently, we have transformed our commercial model to enhance our ability to deliver growth and sustained value, which is what I'll focus on today. This new end-to-end commercial model represents a consistent, repeatable and modernized approach to brand building, synergistic integration across sales and marketing drivers as these levers continue to fuse across data, media and omni-commerce, and it's powered by creativity, advanced analytics and an agile operating model. At our last Investor Day, I presented elements of this new commercial model that we were in the early stages of deploying. The model that we call the brand growth flywheel includes 6 drivers that when executed together delivered accelerated growth and financial results. Today, I'll show 4 brand examples of how this flywheel is successfully powering our business. But first, I'm going to recap the 6 drivers of the flywheel. Number one is marketing. We completely overhauled how we market brands, including a new partnership with the global agency, Publicis. Our creative was a little dated, expected, and our iconic brands were losing relevance, particularly with younger consumers. Our new approach is powered by insights and data, and it pushes the creative edge often starting with what made these brands famous and infusing them into today's culture. A focus of the creative has been to ensure that our brands are relevant and appeal to younger and multicultural consumers. So we have brands built for the fast-changing demographics of today and brands built for tomorrow. We overhauled our media model, too. With a laser focus on driving household penetration, we built a sophisticated media model to optimize reach. We do not constrain our plans by the artificial boundaries of traditional upper and lower funnel media. Instead, our dynamic models consistently adjust to achieve the optimal mix. This has led to our current media mix of 70% digital and 30% traditional media. 50% of the total mix is video. And finally, driven by very strong ROI results and reach capabilities, retail media networks now account for 40% of our media spend. Innovation and design are key components of the brand growth flywheel. We have broadened our definition of innovation beyond just new products, and we are laser-focused on flexing the different types of innovation to brands and to category dynamics, platform innovation, line extensions, value engineering, seasonal items, limited edition and packaging design are all part of the mix. Revenue optimization, it's critical to protect and enhance brand margins. Our approach focuses on 3 pillars of revenue optimization, number one, cost recovery. Over the last 2 years, the team successfully led the recovery of unprecedented cost increases through pricing actions. Number two, optimizing pricing and trade. We analyzed 6,000 annual promotional events to identify the optimal price points, products and numbers of weeks. At one large retailer, for example, we've identified where digital promotions outperformed those at shelf. The third pillar, multiyear revenue growth plans, which we have in place for each of our brands. These brands -- these plans, they include a series of moves to improve profitability inclusive of price pack architecture, channel price slopes, mix, sizes, et cetera. This approach represents a major shift in how we think about revenue growth. Our approach is now much more like product innovation with a multiyear pipeline in place, where ideas are being worked on with some dropping out and some being added. We deployed a new joint customer business planning process that is yielding terrific results. And in partnership with retailers, we have invested heavily in category leadership behind shopper insights and data. Sustained long-term growth requires our categories to grow, which requires creating engaging omni shopping experiences in partnership with retailers and proof that this is working is that, since our last Investor Day, Smucker was awarded 11 category adviserships across coffee, pet snacks, cat food and frozen snacks. For our final driver, we deployed a revamped sales model. Two pillars include perfect store, which is a relentless focus on driving the right assortment at a geographic and store level and a revamped retail execution model with a more dedicated partnership with advantaged sales and marketing, where we have over 1,300 people in over 20,000 stores setting up merchandising, closing distribution voids and fixing out-of-stocks. This new retail model has delivered close to $100 million in incremental retail sales in the past 12 months, driving profitable growth through superior in-store execution. Our brand growth flywheel has powered our growth over the last 3 years. And I'm going to highlight 4 of our largest brands that several years ago were falling a little flat with consumers. Candidly, I'm going to share a lot of executional detail because I want you to see under the hood of this new model. And I want you to see how it's being used across the breadth of our portfolio. And what you're going to see is how these brands responded to the new commercial model. You'll see the results, and you'll see the flywheel effect. Now Meow Mix. It was a bit at risk of becoming forgotten and overlooked. So our ambition was to make Meow Mix famous again, as the brand that cats ask for by name. The ReMix campaign introduced a new generation to the iconic Meow Mix jingle, but in a very fun and culturally relevant way. Take a look. [Presentation]

To amplify the impact, we aligned our musical cats with music media environments, such as the Grammys. Concurrently, we launched the tasty layer subline as a premium extension. And we have a multiyear net revenue growth plan in place for the brand, and we continue to work with customers on opportunities where Meow Mix's size and growth continue to outpace shelf holding power. We have already seen progress, including, but not limited, to increasing distribution by 10% and share of shelf by 17% since 2019. The overall brand results are impressive, 36% growth over the last 3 years and recapturing the #1 share position and the #1 household penetration position in dry cat. Sticking with pet. Milk-Bone was at risk of becoming a little generic rather than the iconic brand it deserves to be. Instead of eliminating its functional benefits like the rest of the category, Milk-Bone planted a flag to own the higher order and motive consumer benefits of love and joy between pets and their parents. The new spot debuted on the season finale of The Bachelorette, a great example of putting our brands in culture. Take a look. [Presentation]

Innovation is the lifeblood of pet snacks, and Milk-Bone has led innovation in the category. Recent launches include a line of premium indulgent products and fun and seasonal items, including for birthdays and Valentine's Day, another example of the brand and culture. We also launched new packaging to give the brand a much needed facelift. Our net revenue playbook identified several pricing and channel opportunities that we've successfully executed with others queued up to come. And as the clear category leader, we're partnering with retailers to test a new shelf architecture and aisle flow with the goal of increasing conversion in the category. Finally, our sales team continues to execute the fundamentals with excellence, driving a 9% increase in distribution and a 21% increase in merchandising since 2019. The brand growth flywheel has powered Milk-Bone's growth, up 27% in retail consumption in the past 3 years and the clear #1 pet snacks brand. Now on Folgers, we needed to reclaim an iconic brand that some had dismissed as mass and we cannot relevant for younger consumers. Rather than ignore these insights, we embraced and we addressed them by overtly acknowledging any negative misperceptions about the brand and then loudly and proudly challenging them. The campaign is unapologetic about the brand's expert craft, deep roots in New Orleans and 35 million drinkers. And as you'll see, the spot leads with Joan Jett's iconic track, "I Don't Give a Damn About My Bad Reputation." Take a look. [Presentation]

Media strategy over indexes with younger consumers, including programming on [indiscernible] as well as reaching cord-cutters and cord-nevers via Hulu, Roku and YouTube Select. We launched the premium blond silk extension as a sister product to the nearly $180 million black silk line, and we launched new packaging across the line to contemporize the brand and highlight our premium offerings. As part of our net revenue playbook, we launched a technology-enabled innovation that reduced the amount of volume in the can with no impact to the consumer experience. An example of our category leadership and customer partnerships is launching a dedicated coffee in-cap in nearly 19,000 Dollar General stores that will roll out this coming February. The in-cap will add 315,000 new points of distribution across our full coffee portfolio. A fundamental sales execution has been strong, too, K-Cup distribution plus 16. We are making excellent progress against Folgers. The brand's growing market share, and we're pleased to have achieved the highest dollar share gains among millennial and Gen X households, which sets the brand up for long-term growth. Finally, Jif. And just to lead off, Jif is very close to recovering sales and share back to pre-recall levels. And we did not lose one single point of distribution during the recall. Now creatively, Jif had become just another peanut butter in a category where brands were starting to blend together. Our goal, boldly claim leadership and superiority, but in a way that makes the brand an epic and enduring part of culture. Our award-winning that Jif'ing Good campaign highlights how the brand's craveable taste makes epically absurd things happen. In this case, giving the rapper, Ludicrous is flowback. [Presentation]

Our media over indexes with younger consumers. For example, our Jif hip-hop challenge on TikTok generated 7.5 billion views. The hashtag challenge actually hit 1 billion views within 24 hours of launch. Jif Squeeze has been a big success, too, bringing in new households through added convenience and, importantly, through new usage occasions. On the revenue side, we've worked to reduce trade spend in a base-driven category investing instead in marketing and in innovation. And we continue to work with retailers to test a new spreads aisle layout that in-market testing shows a significant category lift. Finally, we continue to add points of distribution. I want to stress again, we did not lose one point of distribution during the recall. The brand flywheel is powering our growth. And its power comes not from executing 2 or 3 elements, rather when you execute all 6 in a cohesive and synergistic way. Since we have deployed this new model, we have delivered 10 of 11 consecutive quarters of top line growth, with the only quarter being down where we lapped the COVID stock upsurge. Additionally, when we started the transformation in 2019, only 39% of our portfolio was growing or holding market share; today, 71% even with the impact of the Jif recall. Now the sign of a healthy consumer company is one that is either growing or maintaining market share and 2/3 or more of its business. Our focus is to deliver marketplace and financial results. We do not seek rewards. But I suspect they are an external measure of the quality of our work and our results, and we've won a lot, including recognition by Fast Company magazine as one of the most innovative companies in the world for our brand-building efforts. So I want to leave you with 2 thoughts. First, deep in the DNA of this commercial model, our team and our company is the concept of continuous improvement. Yes, we're proud of the results, but we will never be satisfied. We will always strive to evolve and improve the model, to deliver consistent, profitable growth, from a portfolio of brands that consumers love today and tomorrow. The second closing thought is that these results have been delivered not by the folks in this room but up, down and across our organization by a very talented team, a team that has been on a multiyear journey to create, learn and execute a new playbook, the one I presented to you today. With that, I want to thank you for your time and dismiss everybody for the first break. [Break]

All right. Good morning. I hope everybody got a good cup of coffee and an Uncrustable at break. I'm John Brase, the Chief Operating Officer, and really happy to be with you this morning in person. But also those who couldn't be with us in person, just welcome you again online. I had a chance to meet you virtually 2 years ago when I was just joining the company. And I shared with you at the time why I was so excited to be a part of the Smucker Company: Incredible culture, strong values, outstanding people with a really strong staple of brands that compete in really exciting categories. I sit here today 2 years later, and I can tell you, I'm even more excited about the prospects in front of us. Mark shared, because of our strategy and execution, we're a much stronger company today than we were 2 years ago. And although we continue to be tested by unprecedented supply challenges, inflation, changes in consumer behaviors, we continue to perform incredibly well. We're leveraging our scale and our capabilities that Geoff talked about earlier to really win for our customers and our consumers while generating very strong financial results. While I'm incredibly proud of the progress we've made to date and the strong foundation we are building, I can assure you we are not standing still. We continue empowering our teams to drive continuous improvement to enable top and bottom line sustained growth. Our future is incredibly bright. We have iconic brands in growing and attractive categories and a world-class organization that truly provides a unique advantage for continued strong success. I'd now like to jump into some of the specifics around our 3 key business segments. I want to start with pet, $2.8 billion in net sales business in fiscal '22. Pet food and pet snacks is one of the most attractive center store categories. It's fast growing and incredibly large when compared to the other categories that it competes next to. We project incredibly strong growth that Mark talked about earlier, 4% to 6% over the next 5 years. Our strategy in pet is twofold. First, we want to prioritize and accelerate growth in dog snacks and cat food. Second, we want to improve our overall profit margins across the pet portfolio. We're going to continue to allocate our resources and drive choices that are consistent with this strategy. Let's talk dog snacks. It is the #1 priority for pet, significantly higher margins than food and incredibly strong projected future growth. We're the market leader with a 23% dollar share. Nearly 60% of dog-owning households will purchase one of our treats in a given year. The expectation for growth in pet snacks is that it will be -- it will grow 1.5 to 2x faster than dog food over the long term. We have experienced very strong growth year-on-year. In 16 of the last 18 quarters, we have grown. And we anticipate sales growth to become over $1 billion business for us in the next 2 years. To deliver the growth in pet snacks, we're going to first expand our leadership position in the biscuits and chewy segments -- the soft and chewy segments through core offering optimization but also close in innovation. Second, we really want to build out a meaningful presence in the long-lasting chews and rawhide alternative segments. We're going to do this by driving relevance, awareness and demand with breakthrough marketing, much of which Geoff shared with you earlier, and by engaging younger consumers to build brand loyalty. We're going to expand seasonal and special occasion offerings inspiring shoppers to celebrate with their pets, driving -- also driving impulse purchases and improving household penetration. We want to continue elevating our core offerings by optimizing our assortment. And finally, we're going to ignite innovation through white space opportunities while importantly driving dollars per occasion increases with new premium offerings. The Milk-Bone brand is going to be the -- really the leader in igniting this pet snacks growth across the company. One of the examples that Geoff shared earlier is our more dog campaign, which is focused on cutting through the noise and distractions to deliver what everyone needs, more dog. The campaign is off to an amazing start, and I'd like to share one of the holiday ads that we'll be running with you right now. [Presentation]

Is that not a great example of what we all need more of during the holidays? I love how dynamic this campaign is. It truly provides a ton of opportunity to continue to make this brand be a true love brand with consumers. Milk-Bone is a powerhouse brand. It's #1 in share, #1 in household penetration and #1 in awareness across the category. We have strong momentum on the brand. Milk-Bone has grown over 2x the category average with consumer takeaway of over 17% in the last year. Milk-Bone has brought in 21% of all new treat users in households over the last year. Our key strategy moving forward is really focusing on younger new pet households where they're forming their opinions about the treat category. Today, this segment only represents 25% of the buyers but only 19% of the spend. Milk-Bone is really well positioned to capitalize on the humanization of pets, an opportunity to inspire more purchases by building stronger emotional connections with younger consumers, 85% of whom consider themselves apparent to their pet. Seasonal innovation also will play a critical role. 86% of pet parents believe it is important to celebrate and involve their dogs in special moments, occasions and holidays. Not only is it a fun experience for both the pet and the pet parent, it helps drive incremental sales growth through increased dollars per occasion. As we alluded to earlier, we have treats for all occasions from birthday celebrations to trick or treating to stocking stuffers and more. Simply put, Milk-Bone has truly become the dog treat brand through innovation and culturally relevant marketing. We are incredibly excited about the future growth opportunities for this great brand. Turning to cat food, where we've also experienced tremendous momentum with year-on-year sales growth in 19 of the last 20 quarters, which has been led by Meow Mix, whose growth has been driven by innovation and marketing. Meow Mix has significantly outpaced the category in dry and has catapulted itself back to the #1 position in dry cat food. This momentum gives us tremendous opportunity to leverage this strong position in dry to drive growth in the wet food segment. Dry is still the most penetrated segment in cat and we are going to maintain our leadership position here by retaining our strong distribution foothold by satisfying existing consumers, but also by attracting new ones. We will continue to drive demand, relevance and awareness with breakthrough marketing and engagement with the Meow Mix, ReMix campaign that Geoff shared a great example with you earlier. We will elevate our core offerings by continuing to optimize our assortment on our core. And finally, we will continue to drive smart innovation that will increase dollars per occasion and, more importantly, drive margin per occasion. We have a significant opportunity in wet. Only 20% of Meow Mix today is wet, which compares to a category split of 50-50 between dry and wet. That provides a significant runway for growth for Meow Mix. With our strong brand equity and leadership in dry, we believe this provides tremendous opportunity to have our wet business grow alongside it. As our wet food supply chain continues to improve, we will unlock future growth for this incredible and important segment for the brand. What is the largest segment in terms of retail dollars. Approximately 70% of Meow Mix dry consumers feed wet to their cat today, and over 1/3 don't even know that Meow Mix offers wet varieties. We plan to change that. We're going to shift Meow Mix dry consumers who are today using competitive wet offerings to Meow Mix wet. To do this, we're launching wet 2.0, a revitalization of the brand with a new and improved formula. That will be supported by now tastier messaging and packaging. Finally, in dog food. We continue to optimize our dry assortment consistent with consumer preferences while also expanding our presence in wet. Through the first half of the fiscal year, our dry dog food has been incredibly resilient. Kibbles 'n Bits has seen a strong resurgence, growing net sales over 20%. The Nutrish dog food sales were up double digits. For Nutrish, our plan is very simple: reduce complexity in our assortment, streamline our shelf set, driving top line sales growth while boosting profitability. We will continue to expand the brand in the faster-growing wet segments and pet snacks where we already have a leadership position with an iconic brand in Milk-Bone. We're also upgrading our formulations with improved nutrition credentials in early 2023. We're supporting this innovation through the launch of a new ad campaign that highlights the brand purpose of Nutrish, which is to help provide all dogs with the highest quality of life. Let's take a sneak peek at the new advertiser will hit market in early '23. [Presentation]

Now turning to the $2.5 billion coffee segment, a business experiencing incredible tailwinds. As Mark talked about earlier, 70% of coffee drinking occasions occur at home. The at-home coffee continues to see incredibly strong momentum that really was through habits formed during the pandemic. Our portfolio continues to benefit from these changes, as we are the #1 branded manufacturer with a 26% share of at-home coffee. Our strong portfolio has 3 of the top 8 brands: The fast-growing Dunkin' and Cafe Bustelo brands supported by the iconic Folgers brand. Over the last several years, we have successfully shifted our portfolio towards the faster-growing premium and K-Cup segments. Dunkin' and Cafe Bustelo as well as K-Cups have become the drivers of our portfolio, now accounting for over 50% of our coffee sales. The at-home category continues to evolve though. And we are starting to see consumers experience a shift is how they define what it means to make a cup of coffee. At-home coffee is expanding from a morning cup of Joe to be more about different experiences throughout the day. Just as we were a leader in the fast-growing convenience of One Cup as the first national brand to partner with Keurig, we have bold ambitions to keep pace with the evolving consumer trends where our brands have the opportunity to lead. This includes expanding into no-brew liquid coffee concentrates, multi-serve offerings and increasing our investment in ready-to-drink. To enable this, we will invest in our own manufacturing capabilities, but will also be looking for strategic partnerships. We're going to take a venture approach with liquid coffee. We've got a small dedicated team to enable speed, agility, autonomy to help us accelerate our presence in this critical segment. We will also explore potential acquisitions here to round out our portfolio. Turning to our portfolio, Café Bustelo, one of the fastest-growing brands in the company. Since acquiring this great brand in 2011, we have grown it by over 4x, and we will reach $300 million in sales in Café Bustelo by fiscal year '25. Café Bustelo grew the most dollar share. It was the fastest-growing brand in the at-home coffee category last year with consumer takeaway up 21%. Café Bustelo was now the eighth largest brand in coffee. It's the #1 expresso brand and the #1 Latin coffee. The U.S. Hispanic population is fast growing and is now nearly 20% of the U.S. population. Bustelo will benefit immensely from this changing demographic, as the brand significantly over indexes with Hispanic consumers. Millennials and urban dwellers are also heavy buyers of this brand, as East Coast sales have grown over 60% in 3 years on Café Bustelo. To drive sustained growth on the brand, we are focused on a methodical geographical expansion for all formats of Bustelo. Approximately 75% of Bustelo sales come from the northeast and southeastern states. We will expand from the East Coast to the southern states, on to Texas and then finally, California. Let's take a look at a couple of the new digital spots to support this expansion. [Presentation]

Café Bustelo is well positioned for future growth, and our goal is to become the Latin coffee authority across all coffee formats in the U.S. We believe we're well on our way to doing that. Shifting to Dunkin', which is on track to be the second $1 billion brand in our coffee portfolio over the next 4 years. We continue to see significant runway to grow dual users, those who buy Dunkin' and Dunkin' Coffee shops but also buy Dunkin' for at-home consumption. While we have steadily increased our presence among these dual users, we are still below our benchmark competitors here and have aggressive plans to narrow this gap through innovation and marketing. We also have additional growth potential as we innovate Dunkin' to meet the desire for cold coffee at home. The number of prepared iced coffee drinks at home has doubled in the last 5 years, and we see significant white space opportunity for the Dunkin' brand here. We have launched Dunkin' Cold in both K-Cup and roast and ground formats, and we will be expanding into more flavors next fiscal year. We're also launching a single-serve no-brew Dunkin' Cold coffee powder, which is crafted to dissolve in cold water, and we are expanding into Dunkin' Cold concentrates with much more siding innovation to come. Here's a short video clip highlighting our expansion in the fast-growing cold coffee segment. [Presentation]

As we continue, investments to drive growth for Dunkin' and Café Bustelo, we have an iconic asset in Folgers, which is undergoing a revitalization and will play a key role in the future growth of the portfolio. Earlier this calendar year, we launched a bold new marketing campaign that Geoff shared with you, with several new initiatives to reinvigorate this iconic brand. The momentum with Folgers is incredibly strong. It grew the most dollar share in the at-home coffee category last quarter. The brand continues to benefit from tremendous scale with more than 2x the volume share of any other brand in the coffee segment. In addition to the leading Folgers Classic Roast, we are also driving growth for varieties like Black Silk, a darker, smoother experience. We've shifted our advertising to celebrate Black Silk as the hero of our extended lineup, and our results have been impressive. Black Silk is the #1 dark roast selling canister in terms of sales and dollar share, and it's the fastest growing dark roast among millennials and Gen X consumers. Our K-Cup portfolio continues to experience very strong growth, outpacing the total category in the past year. Dunkin' Original Blend was the #1 pod brewed in a caring machine in 2022. We expect One Cup to continue to grow at a 3.5% CAGR over the next 5 years, and we expect our growth to continue to exceed that of the category. We believe the K-Cup portfolio will be over $1 billion in the next 5 years. As you can see, we are well positioned to benefit from the trends in coffee with a portfolio that provides options from value to premium. Our ability to leverage our powerful brands will enable us to continue to lead this category while delivering on the evolving consumer preferences. Finally, our $1.7 billion consumer foods business, we are focused on the fast-growing snacking segment with no mess, convenient and on-the-go options. Over the last few years, we have significantly reshaped our portfolio to prioritize focus on the fast-growing Uncrustable sandwiches. We expect Uncrustables to make up 50% of net sales for the consumer foods business within the next 5 years, which will also support margin expansion for the consumer foods business but also for the company. Uncrustables has a 9% share of the frozen snacks and sandwiches retail category. It was the largest driver of growth for the category in the last year. Two of the top 7 SKUs in the frozen category -- the entire frozen category are Uncrustables. Uncrustables is #1 in households with kids. So #1 in repeat rate and #1 in velocity growth rate in the frozen segment. Uncrustables is also #1 in the food service prepared sandwiches category with a 41% share and has experienced a 10% CAGR over the last 5 years. Uncrustable Sandwiches have grown at a 15% CAGR across the company over the past 10 years with total brand sales exceeding $500 million, a full year ahead of our original target. This fiscal year, we expect the brand to grow approximately 30% to over $650 million, which would be an acceleration to a CAGR of over 20% over the last 5 years. With the second phase of expansion in our Longmont plant in Colorado now complete, we have capacity to produce approximately 1.5 billion sandwiches annually with our current 2 production facilities. We are confident we can deliver continued double-digit growth over the next several years, generating 1 full point of total company top line growth annually. Although our past growth has been tremendous, there is still significant runway for growth here across several metrics, most notably household penetration, distribution and awareness. We expect to double household penetration, broaden distribution into new channels and geographies and increase awareness by turning on national advertising for the first time. Our strategy is simple, we want to win the lunchbox by making frozen -- the frozen handheld category a destination that expires existing buyers but also attracts new ones. Now let's take a look at how much consumers love this iconic brand. [Presentation]

As you saw in the video, with the extraordinary potential of Uncrustables, we're investing in the third production location in McCalla, Alabama, where operations are expected to begin in calendar '25. The new facility will include production for PB&J but also the ability to expand into new offerings beyond peanut butter and jelly. We are confident Uncrustables can grow to a $1 billion brand and are now accelerating that goal to reach $1 billion in annual net sales by fiscal '26, a full year ahead of our previous expectation. Our aspirations from Uncrustables go beyond just PB&J. We plan to move this brand from an iconic product to an iconic brand. While PB&J will remain the driver of growth for years to come, we are bringing new varieties to the lunchbox with thaw and eat meat and cheese snack bites. These offerings will enable Uncrustables to be in lunch boxes and peanut-free schools. Future plans also include expanding our famous circular no crust, crisp sandwich beyond peanut butter and jelly into a new delicious alternatives. The opportunity beyond PB&J is significant, and we are well positioned to capitalize on it. Turning to our category-leading peanut butter and fruit spreads business. Peter butter and jelly is America's #1 sandwich among households with kids. It's a simple, comforting indulgence that is easy to make and provides delicious balanced nutrition. PB&J is a staple. And our spreads business is in over 40 million households. We have the #1 share for peanut butter and fruit spreads with nearly double the share of the leading competitor. In peanut butter, Jif will continue to grow over the long term, as we drive dollars per occasion through net revenue optimization. In fruit spreads, we have significantly reduced complexity by optimizing our SKU count by approximately 30%, all while achieving a 5-year dollar share high. This is a great example that less is truly more sometimes. We now offer peanut butter fruit spreads in squeezable formats in a variety of options that are now launching on-the-go squeezable formats that are great for snacking occasions. We believe these new formats can expand usage occasions but also bring our brands to new consumers. Our streamlined portfolio and consumer-led strategies are winning, and we are confident they will continue driving consumer foods growth. In closing, I truly believe the actions we are taking across our businesses ensure we can deliver continued top and bottom line growth. We are confident that we are focused on the right categories with the right brands and have the right strategies to succeed. With that, let me turn it over to Aaron for a panel discussion with the leaders of our U.S. retail businesses, who will provide further insight into the growth opportunities for their respective businesses. As we reset the stage, let's hear more from some of our consumers. Thank you very much. [Presentation]

Good morning, and thank you for joining us today. We're now going to transition to a discussion with our business unit leaders. I'm Aaron Broholm, Vice President of Investor Relations for the Smucker Company. And joining us on stage are Joe Stanziano, who leads our coffee business; Rob Ferguson, who heads up our pet business; and Tina Floyd, who leads our consumer foods business.

Let me start out with some of the growth goals that John talked about for our key brands. Tina, let's start with Uncrustables and the goal to reach $1 billion in sales annually. Can you give us more color on that?

I sure can. Good morning, everyone. It's nice to see everybody today. Really excited to talk about Uncrustables and the confidence that we have in building to $1 billion. First, I would probably start with our strategy. It's a sound strategy, really grounded in consumer insights. Our target is really households with kids. So we spend a lot of time talking to the moms and dads that are packing lunches and trying to get families up and running in the mornings. And the one thing they continue to tell us is those mornings are chaotic. Again, try to get everybody up and moving, dressed and out the door, a lunch is packed, they are just asking for help just to make things a little simpler. And that's where Uncrustables comes in, very simple, right, from the freezer right into the lunch box. It allows who's ever packing the lunch to feel really good about what they're feeding their kids for that day, provides balanced nutrition. And they also know that whenever that lunch box comes home, it's going to be empty because the peanut butter and jelly sandwich is the favorite sandwich for kids. And with 6 billion lunches packed every day, we have full confidence that Uncrustables is really going to help solve that problem for them. John also mentioned that this strategy is the gateway to expandable consumption. Once Uncrustables are in the freezer, they become loved by everyone. And I know each and every one of you would probably agree with that. You might not say it, but I think you would agree with it. So we have full confidence that, that expandable consumption piece is really, really meaningful. Second, I would tell you that as we wrap up this fiscal year, as John mentioned, we feel really good about delivering that $650 million in net sales. That means 9 years of double-digit growth. We've delivered it. We delivered the growth of that business, and we're also helping to drive the category. We're the #1 and #2 SKU within frozen handheld and snacks. And as John mentioned, we're in the top 7 SKUs within total frozen, and we've been on allocation and we haven't fully marketed this product yet at all. So we have full confidence that, that $1 billion is definitely within sight. And I think finally, I would mention that, if you think about it, Uncrustables is in a really unique position, really to be part of every stage of life, start with the lunchbox. You start out getting your sandwich in your lunchbox or through the school program. You move into high school, and now you're taking your Uncrustable between classes and football practice. And then you move into college, and after a late night of, I'm sure, studying, you need something simple. So you go directly to the freezer. And then ultimately, you're serving Uncrustables to your kids. So we fully believe that we're moving from an iconic product really into building an iconic brand. So our line of sight and our ambition to $1 billion, we know how we're going to get there.

Thanks, Tina. And then just a follow-up on that. What's the trajectory to that $1 billion look like?

Yes. So we believe we'll be $1 billion by FY '26. So you can expect about $100 million every other year.

All right. Okay. Thanks, Tina. And then Joe, can you talk about -- we talk about the Dunkin' brand growing to $1 billion. What are some key strategies behind that?

Morning, Aaron. Morning, everyone. Well, first, I have to say, Tina's going to get Uncrustables to $1 billion, coffee don't want to be left behind. So it will be a race to see who gets to $1 billion first. But no, in all seriousness, the Dunkin' growth has just been tremendous. Under the Smucker ownership, the brand has more than tripled, and it is accelerating growth. Just in the last 3 years, we've added almost $200 million of revenue. That's the equivalent of adding a top 10 brand in the category. So as we think about the path to $1 billion, we think there's multiple opportunities to get there. Base business, we have core distribution opportunities as well as market share gains, innovation, seasonal flavors and the new cold brew in K-Cups and roast and ground. Hopefully, everybody had a chance to try it. We've been brewing it this morning. And then new formats, John showed -- but we're really excited to launch Dunkin' in liquid concentrates this spring. And then finally, I would say we have such a great partnership with Dunkin' Brands and Inspire. We will continue to work with them to unlock future growth opportunities that allow us to bring the shop experience to the at-home consumer.

And then sticking with the $1 billion growth goals, Rob, dog snacks to $1 billion.

Thanks, Aaron. It's a pleasure to be here today. It's good to see everybody. Let's start with some numbers. So we exited fiscal '22 at just north of $880 million on our dog snacks business. We've grown that business 21% on a 2-year stack. As you heard from John, we have a market-leading position with 23% dollar share in the dog snack category and over 60% of dog-owning households treat with at least 1 of our brands. Our path to $1 billion is rooted in several kind of key components of value creation, elevated marketing spend for demand generation. You've seen our campaigns on Milk-Bone here today. In addition to that, we want to continue our premium innovation launches as well as enter new subcategories, which you'll hear about shortly, and you heard from John on long-lasting chews. And then finally, winning seasons and winning impulse. I'm very confident in our path to $1 billion, I'm not saying anything new today, but I'd like to push well beyond $1 billion on this dog snacks business.

All right. Thanks, Rob. And then going beyond these 3 key targets that we talked about, Geoff talked about the market share gains that we've had across the entire portfolio. And these leaders have been instrumental in translating our strategic priorities into action over the past few years. Let's talk about how do we ensure that the business to continue to drive momentum and deliver on our growth strategies in the future. So with the market share gains that we received, what drove that performance? And how do we sustain that? Joe?

Yes, Aaron, as you heard this morning, at-home coffee consumption really fueled the growth of total coffee consumption. And for us, as the largest manufacturer in the category, it really starts with our portfolio of trusted brands, each with a unique position in the category and, importantly, playing across all segments within the category, iconic Folgers leader in mainstream, Dunkin' with its shop equity and premium and the fastest-growing brand in the category, Café Bustelo, the #1 Latin coffee and fastest growing with younger consumers. But beyond just our brands, I would say key to success over the last couple of years has really been execution. Our teams did a fabulous job managing through a very challenging supply chain environment. We leveraged our manufacturing capabilities and our focus on retail execution to ensure our products were on shelf every day for our consumers and our customers.

Thanks. And Rob, how about in pet with the market share gains we've seen?

Yes, pet, it's such a dynamic category. I can't be certain, but I think I heard Joe and Tina even saying that it's maybe the most exciting category that we play in as the Smucker company.

This is what we deal with...

Maybe not. But the guys, the pet snacks category is the #2 center store category depending upon the time frame you're looking at, it's either growing #1. And #2, it drives 70% of the mission trips for our consumers. Our story in the pet category is knowing who you are. I think the best and most difficult part of the pet category is knowing where you have the right to grow. And there's growth everywhere. There's growth in dry. There's growth in wet, dog, cat, value, mainstream, premium. Our evolution towards market share gains is really knowing who we were as a pet business. And that strategy is rooted in all things, dog snacks and Meow Mix. The good news for those 2 segments and multiple brands is that our continued value creation sits on several major pillars: innovation, brand renovation and strategic pricing, elevated marketing to drive consumer demand, and it's probably good news that it isn't just one thing.

And then sticking with the market share. Tina, let's talk about Jif, which is recovering market share. Can you give a little more color?

Yes, I both excited and proud to say that we're back. Jif is back on shelf. We are producing our entire portfolio of SKUs. We've returned to share leadership in both dollars and in volume. Geoff mentioned it. We did not lose any distribution at all. And the brand is as strong as what it was pre recall. It's really a testament, I believe, to the strength of the brand, what it means to the category but really the importance of what it means to our consumers every day. They are thrilled that we are back on shelf. I do have to say a big thank you to our suppliers and our customers, as we really worked in concert to move product back to the shelf as quickly and as efficiently as possible. But if it weren't for our employees, the determination and the focus, we wouldn't have been able to return as quickly as what we did. But really thrilled to be back on shelf and really looking towards turning back to growth.

All right. And then sticking with market share. We have seen some growth in private label, particularly in coffee. So I wonder, Joe, could you share some more color on what is the competitive moat that we have for our coffee business? And what gives you confidence about maintaining that leading share position that we have?

Well, I mean, it's very dynamic right now, Aaron. But I think if we think about what's going to make us successful in the future, it's a lot of the same things that have made us successful the last couple of years. And we have to continue to invest in our brands. You saw all 3 key brands have new creative this year, really spot on positioning. We have to leverage our scale and breadth in the category, really, really important. Again, we play across mainstream premium, K-Cup instant and soon to be liquid and especially K-Cup. You saw it in John's presentation, K-Cup segment has been driving the category growth the last few years. . Our portfolio, all 3 brands in K-Cups have been growing faster than the category. So we have to continue that momentum. We've got to continue to think about innovation, the right innovation, understanding the consumers' needs and meeting those needs. And then finally, we got to win at shelf. It's about the right assortment, continue to drive core distribution, optimize revenue through price and promotion and leverage our category leadership to bring insights to our retail customers for category growth, portfolio growth, both online and in-store.

Joe, you mentioned innovation, and John gave some examples of innovation across each of the businesses. So I wonder, within each of the business areas, can you give a little more color on the innovation plans for the future?

Yes. We're really excited about this liquid platform, the no brew platform John shared. If you think about the next generation of consumer, and as Mark mentioned, they're really creating this fourth wave of coffee, right? They're taking these cold coffee creations that they're getting in shop and they're bringing them at home. And they're becoming really at home Baristas. But they're looking for convenient solutions to really create and prepare these specialized drinks. And as the leader in at-home coffee, we can play in this space, right? We have the brands. We have deep coffee knowledge and expertise. We're making investments in capabilities and strategic partnerships. And this will really put us in a good position, as this space continues to grow.

And sticking with innovation, Rob, how are you thinking about innovation in the pet business?

Yes. Aaron, I'll bring us back to dog snacks, and I'm really excited to talk about the premium innovation across Milk-Bone premium biscuits as well as our launch into long-lasting chews. We launched Milk-Bone premium biscuits a little over 2 years ago at this point. They've proven to be highly incremental to the category. They retail at nearly 2x the revenue of our base biscuit. And they've proven to be high -- as I said, highly incremental in the category. 41% of the consumers of our Milk-Bone premium were not previous purchasers of our base biscuit business. So as you think about those items stuffed, stacked, dipped, chunked, we're really excited to bring more of that type of premium innovation to the biscuit category and unleash the indulgence that was -- what was there and available to us. As I think about long-lasting chew and our entry into that subcategory, it's relatively underpenetrated for us and for Milk-Bone. I think our confidence comes in 2 different dimensions. First, it starts with the insight that 78% of dog-owning households currently don't purchase that subcategory of long-lasting chews either because of issues with a product or dog rejection, frankly. We've also created a really innovative product there that we're going to significantly invest behind as we look forward to that launch as well.

All right. And then Tina coming back to the Uncrustables brand, we talked about innovation beyond peanut butter and jelly. Can you share a little bit more about that?

Yes. I think John had mentioned the launch of our meat and cheese bites. And again, the intention is to continue to offer a variety for that lunch box need. Again, the whole idea of thaw and eat is really something that consumers are looking for and again, seeking that from Uncrustables because they trust the brand. What I will say, though, is our runway to $1 billion is really focused on our peanut butter and jelly, and that will be our primary focus for the next few years.

All right. We've talked about streamlining our cost structure and optimization. I wonder if each of you -- could you give an example within each one of your businesses of work that's been done there and how that will benefit us moving forward? Joe, start with you in coffee.

Aaron, the coffee business has a demonstrated history of delivering cost savings. We say value engineering is in their DNA. Some of the recent savings projects really center around utilizing new roasting technology, process improvement and sourcing optimization. And the teams will continue to remain focused on consistent delivery, driving out costs, finding efficiencies to help ensure we're rebuilding margins and giving us the ability to reinvest back in our business. .

Rob, how about in pet?

I guess. What a crazy couple of years it's been. I want to take a minute and just recognize and thank our product supply teams in terms of what they've done to make sure that we had product to delight our consumers. What you'll hear from me is attacking complexity. And as we talk about attacking complexity, it comes in a couple of different forms. I think, first and foremost, there's the strategic decision that we made in our divestitures over the last couple of years. The divestiture of Natural Balance and, ultimately, our private label business, reduce the complexity for us. And then on top of that, we've taken a hard look just kind of our -- for our remaining businesses on our assortment and our SKU optimization. And we've taken quite a bit of SKUs out that just ultimately didn't necessarily add anything from consumer experience or from an income statement perspective as well. I think the challenge for us now as we start to see stability come back into those supply chains is making sure that we don't add the complexity back, and we use this as the base that we grow off of.

Then Tina, in the consumer foods business?

Yes. It's similar to Rob's story, but what I will tell you in consumer over the past couple of years, we've been extremely intentional about removing complexity and creating focus also that we can return to growth. And one recent example is we've recently went from 2 production facilities on our fruit spreads business down to 1, all in the spirit of optimizing and fully utilizing our assets. And I think most of you have also heard too, we just reduced our SKU counts within fruit spreads by 30%. And what's happening is the SKUs that are on shelf are working harder. Our productivity is up over 40% and our share is growing. And all in the spirit of reducing complexity, really increasing our focus, we know exactly what we need to get done and returning to growth.

I want to shift to Jif to talk about the brand growth flywheel and the improved marketing and the data insights. Can you talk about how was that impacted relationships with our customers as a result. Joe?

Yes. Geoff talked about it. But specifically in coffee, we've got greater focus and dedication from the commercial side in the coffee business, really has led to an improved retail execution of our coffee strategy and increased strategic conversations with our retail customers. Geoff talked about the category advisory gains. We've gotten 2 key -- critical key category advisers in coffee this past year. And I think we now have 5 of the top 10 in the coffee business. So it's really elevated our conversation with our customers, continue to make it more strategic. And it's led also to some really great opportunities around new aisle work that will help grow the category, engage consumers better in the aisle and really just a deeper partnership with our retail customers.

Rob, same question in pet.

Yes. A little bit of a similar and slightly different story for pet. I think it's nearly 3 years ago, we made the decision to invest in a dedicated pet sales and customer commercialization team. That's been a really big unlock for us, as you think about partnering with our customers in that pet space. We've improved our selling stories. We've improved our focus on the overall category. Our joint customer business plans are better now than they've ever been before. And we've invested with a couple of key strategic customer partners in category adviser and partnerships there in the dog snacks area, which we think positions us for future growth in our dog snacks category.

And then finally, Tina, how about in your business?

Sure. I mean, again, very similar, right? I mean it's just truly elevated the conversation. But in the categories in which we play, in mature categories such as peanut butter and fruit spreads, by working with our customers more strategically, we've really been able to execute against the fundamentals much, much better and just by bringing new breakthrough of marketing, it's really elevated the category and the brands.

As we wrap up this section, one final question, a short one. What's the one thing in your business that you're most excited about as you move forward? Joe?

Well, as you said through this morning, Aaron, there's a lot to be excited about in coffee. The Folgers rebranding work, the growth of Café Bustelo. But I would have to say this liquid no-brew platform is really exciting. To be able to move into this white space, bring leadership and innovation and really unlock growth opportunities for our entire portfolio. That's what I'm most excited about. .

Rob, what are you most excited about?

Yes. I think when you hear me say this, you're going to question how I define the term excitement. But I think what I'm most excited about for this pet business is consistency. We're a little over 2 years into the execution of our articulated strategy. I want to thank the pet team for really buying in. Our focus on pet snacks and Meow Mix has driven the gains that we're delivering, and I am excited to continue the path that we've been on.

Finally, Tina?

I'm not got to have just one, sorry. I'm excited about increased capacity for our Uncrustables and really starting to be able to meet some of that demand, unleashing that expandable consumption and really building an iconic brand for Uncrustables. I think that's what I'm most excited about.

Thank you. We're going to wrap up this section and our business leaders will also be available for the Q&A session we'll have at the end of our program. So right now, we're going to transition. I'd like to introduce Amy Held, our new Chief Transformation Officer.

Thank you. Aaron. As Aaron just said, my name is Amy Held, Smucker's new Chief Transformation Officer. Transformation, however, is nothing new to Smucker. Over the past several years, we have transformed our portfolio by establishing leadership positions in the growing categories of coffee, pet and snacking and also by strategically divesting businesses not aligned to our growth algorithm, such as the recent divestitures of our natural beverages and grains business or our private label pet food business. And as you heard from Geoff earlier, we have also fundamentally transformed almost every element of our commercial model and capabilities. The next chapter in our journey is now to unleash the power of our 7,000 dedicated employees to drive value creation at every level throughout every corner of our organization. This is the heart of transformation, leveraging the power of our collective Smucker organization to execute on a multiyear productivity program that enables us to deliver against our long-term growth algorithm while investing in growth opportunities across our strategic areas of focus, including Uncrustables, pet snacks and coffee. By delivering sustained gross margin improvement and SG&A productivity, we will fund our strategic initiatives while also enhancing profitability. At a high level, we are committed to margin enhancement and expect to reach historical gross margins of 38% over time with initial benefits occurring next fiscal year. This margin enhancement, along with SG&A efficiencies, will support our operating income target of mid-single-digit growth over the long term. Success in transformation will require both the what and the how. The what is setting the boldest productivity ambition in our history, enabled by a new approach to the how to deliver benefits over the next 3 years and beyond. In the past, we deployed cost savings targets in a top-down manner, with specific targets segregated by functional area or business. While we achieved our goals, we solve them in silos. Today, we are taking a fundamentally different approach, one that is bottoms up, fully cross-functional and driven by the ideation of those closest to the work, closest to the value creation opportunities. We are mobilizing the entire organization engaging at a level deeper and broader than ever before to drive change and efficiency every day. More tactically, we have created a new centralized transformation office that is tasked with creating the organizational capability to consistently deliver an elevated level of productivity across both cost and growth levers throughout the company. This transformation team will capture the passion and creative solution of our employees and provide a path to surface resource and execute ideas on an accelerated and ongoing basis, realizing savings that we will either drop to the bottom line or reinvest back in our business for continued growth. Over the past few months and with the expertise and provocation of a leading external partner, we established the future 3-year trajectory of the business. We are initially focusing on 8 areas of value creation: operations, supply chain, procurement, design to value, SG&A, net revenue optimization, sales and marketing. Between now and the end of February, our teams will be developing detailed business cases and implementation plans for the more than 500 initiatives identified to date, examples of which include the following: Within operations, we are investigating opportunities to reduce material and scrap losses. In supply chain, we are evaluating freight mode selection and measuring truckload utilization. In procurement, we are reviewing and challenging our key sourcing strategies. We are studying new design-to-value opportunities across our portfolio in formulation and packaging. To improve SG&A productivity, we are analyzing opportunities to optimize existing technology investments. Geoff walked through several examples earlier in support of our net revenue optimization efforts. Across our sales function, we are equipping our teams with better customer level P&L data than ever before to drive more strategic investment decisions. And finally, in marketing, we will continue to focus on reducing nonworking costs such as production costs. We look forward to sharing additional insights on our transformation journey at our CAGNY presentation in February. In closing, we view our transformation efforts as one key aspect on delivering the near-term and long-term growth ambitions. I am truly inspired by the energy, the enthusiasm and the dedication generated already by teams involved in this transformational work. With that, let me dismiss everyone for our second break of the day. Thank you. [Break]

[Presentation]

Good morning, everyone. It is great to be with you today. My name is Tucker Marshall, and I'm the Chief Financial Officer for the J. M. Smucker Company. So far today, you have heard how our company transformation has positioned us for growth. As Mark noted, we are executing against our strategic priorities to deliver sustained value across our portfolio of leading brands, which are well positioned in attractive and resilient categories. We have excellent growth opportunities detailed by John and our general managers that give us confidence in delivering long-term performance. Our new commercial capabilities have improved the performance of our brands with a proven and repeatable model outlined by Geoff. Our transformation office will enable us to be a more efficient and productive business and as Amy noted, enhance our margins and support future business investments. And as discussed by Jill and Jeannette, we continue our commitment to support our employees in a healthier planet and governing our company a way that is ethical, responsible and aligned with shareholder interest. I'm excited to bring this narrative together to demonstrate how these elements will drive our long-term financial algorithm, delivering sustained growth and increasing shareholder value. I will begin by outlining the expectations for our current fiscal year 2023 and the near-term operating dynamics. I will then transition to our longer-term view of what you have heard today in conjunction with our financial strategy and how that translates to our top line and bottom line growth ambitions. 3 weeks ago, we released our fiscal year 2023 2nd quarter results. I am pleased to report that we delivered another quarter of results that exceeded our expectations with positive momentum in the business. We expect this momentum to continue, and our team continues to navigate a dynamic environment while delivering results. In May, we successfully partnered with retailers to implement additional price increases in response to higher costs. Since then, we have experienced overall modest price elasticity of demand driven by the following: our leading market share positions in great categories, continued investments behind our iconic brands consumers love, a variety of products that span the value spectrum and relative low competition risk from private label. As a result, our top line growth remains strong. The momentum for the business and further visibility in the remainder of the fiscal year gave us the confidence to raise both our top line and bottom line guidance. Our full year as reported net sales to be up 5.5% of net sales compared to the prior year. Comparable net sales are anticipated to increase approximately 8% at the midpoint of our guidance range. This includes an estimated 2 percentage point unfavorable impact from the Jif peanut butter product recall related to manufacturing downtime and customer returns and fees. Our projected full year adjusted earnings per share guidance range is $8.35 to $8.75, including an estimated $0.80 unfavorable impact related to the Jif peanut butter product recall. Free cash flow is anticipated to be $550 million, inclusive of the impact related to the recall. We remain confident in delivering this fiscal year, and we are well positioned to deliver longer-term growth. Before turning to our longer-term financial plans, I would like to reinforce my priorities. We will continue to build on our strength through these financial priorities, which are the building blocks to drive growth and increase shareholder value. Through these priorities, we remain dedicated to our long-term strategy while operating with financial discipline and support of our shared goal of value creation for all of our constituents. These priorities are as follows: active and transparent communication, execution to credible financial targets, prioritization of the highest and best return opportunities, maintaining productivity, focus and cost control and a balanced capital deployment model. These financial priorities, along with our portfolio reshape activities and strong execution have allowed us to outperform our peers in the broader index over the last 3 years. Additionally, we have seen multiple expansion due to underlying business growth and how we have deployed capital. As we move forward, our company has the potential to become a consistent top quartile performer and total shareholder return in the food and beverage industry. Looking ahead, it is important to consider the impact of changing macroeconomic conditions and evolving consumer behaviors to our business. Our focus is on maintaining business momentum and actively responding to consumers as we capitalize on opportunities with our strong portfolio of brands. We will continue our consumer-centric approach by making strategic investments to strengthen our brands and drive growth in attractive categories of pet, coffee and snacking. Additionally, we are advancing cost savings and margin management initiatives through our transformation office as we begin to return profit margin to historical levels while generating cash and deploying capital. While we've experienced elevated organic growth over the past several years, we expect to deliver consistent growth in line with our long-term algorithm going forward. Our strategic framework and financial priorities give us the confidence to achieve our long-term financial objectives. Those objectives include low single-digit net sales growth, mid-single-digit operating income growth, high single-digit adjusted earnings per share growth and total shareholder return of approximately 10% or greater when considering our dividend policy. We see these objectives as a steady, compelling and compounding algorithm achieved through top line and bottom line growth accompanied with margin expansion and a strong commitment to disciplined capital deployment. Long term, we anticipate low single-digit top line growth as a result of our strengthened portfolio and projected growth rates in our respective categories. We also continue to see positive momentum in our brands through improved market share trends and focused growth initiatives within each of our businesses. As we streamline the business with 4 divestitures over the last 2 years, we have reallocated resources to more strategic, faster-growing opportunities. We're focused on the following key enablers of future top line growth. The Uncrustables brand is expected to account for greater than 1 percentage point of the total company's growth rate as it continues on its path to reaching $1 billion in annual net sales and beyond. We expect accelerated growth for our pet snacks driven by Milk-Bone, along with continued momentum of the cat food business led by Meow Mix. We expect continued growth for our coffee portfolio driven by the Dunkin' and Cafe Bustelo brands and expansion into new formats. And lastly, we expect continued growth in our away-from-home business supported by expanding Uncrustables distribution and unlocking coffee growth with new formats and channels. We anticipate operating income growth will outpace sales growth and increase at a mid-single-digit percentage over our strategic horizon. Operating income growth will be achieved through continued volume growth driven by our strategic platforms and benefits from our transformation office initiatives. Additionally, we anticipate gradual margin improvement supported by the following: improved volume mix as we reshaped our portfolio by strategically divesting businesses and are prioritizing resources to our fastest growth opportunities that are margin accretive, including Uncrustables, pet snacks and K-Cups and premium coffee. Moderation of cost inflation and stabilization of our supply chain and manufacturing environment and benefits from our transformation office as we embark on our multiyear productivity program. Additionally, benefits from this office will extend SG&A through the form of productivity savings. These benefits will be partially offset by reinvestment back into our brands, including marketing expense and investments associated with Uncrustable sandwiches to the expansion to a third production site at McCalla, Alabama. Our margin management programs have delivered significant cost savings across the company. Our actions have included minimizing discretionary spend, reducing nonworking marketing dollars, managing sales and brokerage expenses, optimizing our manufacturing and supply chain environments and restructuring our corporate support organization. Looking ahead, we are shifting away from episodic cost programs to a continuous productivity model across commercial, supply chain and corporate activities through the transformation office. This approach will enable us to assure profitability and margin growth while balancing shareholder returns and reinvestment back into the business. Below operating income, we expect our capital deployment model to drive a high single-digit percentage for adjusted earnings per share. We have consistently demonstrated the ability to generate strong cash flow that provides a balanced approach to capital deployment while maintaining an investment-grade debt rating. Over the past 2 fiscal years, we have strategically invested over $700 million in capital expenditures, while returning $2.9 billion in debt repayments, dividends and share repurchases. We anticipate allocating approximately 50% of cash from operations for future growth through capital expenditures and strategic investments, including the ability to pursue acquisitions and returning approximately 50% of cash to shareholders through dividends, reduction of debt and share repurchases. Our long-term goal remains to generate $1 billion in free cash flow annually which can be used to support the growth of our business and create shareholder value. And our long-term strategic target for capital expenditures is approximately 3.5% of net sales. However, capital expenditures remain elevated over the next few years, primarily due to investments related to Uncrustable sandwich capacity expansion. Without this elevated level of capital expenditures, our spend as a percentage of net sales would be in line with our strategic target. Further, our strong cash flow has enabled debt paydown. Over the prior 2 fiscal years, we have paid down approximately $1.1 billion in debt resulting in a debt leverage ratio of approximately 3x. We are well positioned in today's rising rate environment with favorable fixed variable debt structure and no debt maturities until 2025. Our leverage position and debt structure provide the financial flexibility for a balanced approach to capital deployment. This includes maintaining an investment-grade debt rating and having access to capital at preferred rates while also maintaining the flexibility to repurchase shares, increase dividends and pursue strategic investments. Historically, we have used opportunistic share repurchase to deliver cash to our shareholders and to replace divestiture earnings. We will continue to evaluate share repurchases as a lever to increase shareholder value. Last July, we increased our quarterly dividend by 3%, marking 21 consecutive years of dividend growth. On average, our dividend increase has been approximately 7% over the past 10 years. We expect our Board to maintain the company's current dividend policy which is to return approximately 40% to 45% of our annual adjusted earnings per share to shareholders. Finally, acquisitions continue to play an important role in our strategy of driving category leadership and scale through large iconic brands, coupled with smaller emerging growth brands. When evaluating potential transactions, our primary focus is to assess the resulting impact to our return on invested capital for the company, which is why this metric is now tied to long-term incentive compensation. The reasonableness of multiples paid and the strength of financial returns remains critical in every deal we evaluate. In closing, I would like to emphasize the following: we continue to deliver strong results. We've transformed into a stronger company. We are well positioned to continue delivering growth through our key platforms, including Uncrustables, pet snacks, cat food and expanding our coffee portfolio. Our commitment to financial discipline and a balanced approach to capital deployment remains our long-term strategy. And we are confident that we are firmly on the path to delivering consistent, long-term sustainable growth and increasing shareholder value. Before I turn it over to Aaron for our question-and-answer session, I would like to express my appreciation for our employees. They have demonstrated their commitment to executing with excellence and their passion for our company positions us for continued success. Thank you for your time today.

Mark's executive leadership team is now going to join us on stage for our question-and-answer session. Please raise your hand, and we'll bring a microphone to you for your questions, so the folks listening online can hear you. And then for the individuals joining us virtually, you can submit a question through the chat function, and I'll ask those questions. So at this time, we'll start with Ken Goldman.

I wanted to ask about some of the new productivity initiatives that we're going to hear about at CAGNY. First, are we going to get at CAGNY some I think suggesting we're going to get some numbers around that. Is that fair? And then second, are those incremental -- those productivity initiatives to the long-term algorithm that you have of low single-digit sales growth, mid-single-digit EBIT growth -- or is it sort of there to support the algo as it is?

Sure. Thanks for the question. I'll start with that, and then I'll let Tucker add what he cares to specifics about what he'll share at CAGNY. So CAGNY will be one place where we'll share more about the journey that we're embarking on. And so I'll let Tucker tackle that piece of it. And really, I would think about these initiatives as being supportive to and contributing to the operating income mid-single-digit long-term growth algorithm that we stated.

Next question, Jason English.

Two questions or one question and then one follow-up, if I may, please. Tucker, you just -- you said you expect to deliver long-term algo going forward. I think most people in the room will interpret that to mean patio term algo next year. I'm not going to ask you to provide fiscal '24 guidance yet. But you have this $0.80 transitory headwind from the Jif recall. As we think about the near-term numbers, is it fair to think long term algo plus the recoupment of that [indiscernible] next year?

Jason, we're thinking of it as this. We have an active guidance range for this fiscal year of $8.35 to $8.75. Wherever we finished the year, we understand that we have to add back the $0.80 associated with the Jif peanut butter recall and then from there, determine what our growth will be for FY '24.

That makes sense. That's helpful. And then you had -- in terms of your strategic priorities, transform your portfolio remains one of your top 5 strategic priorities. You also gave us a lot of clarity on where your growth focus is, which was focused and appreciative. But there are areas like say, dog food, as an example, where it doesn't seem to be a priority. Should we expect more portfolio reshaping in terms of divestments and is any potential dilution from that also contemplated in your long-term algorithm?

So Jason, thanks for the question. We've been, as you saw today, on a tremendous transformation journey and hope that you all walk away with confidence that it is working. And our -- at the end of the day, our strategy has been exceptionally clear over the last couple of years. And I'm personally very pleased with our ability to execute against it. It's obviously helped us deliver very good results. So it really comes down to focus and execution. Specific to pet, I think Rob did a great job today just talking about how our focus remains squarely on snacks and cat specifically Meow Mix and the stabilization of dog food, which has also gone exceptionally well. We won't speculate on or share anything that might happen in the future, but we always will continue to look at our portfolio and be very responsible as we think about where we should play, where we should invest and where we're going to drive growth.

And Jason, I would add that we acknowledge and we have demonstrated this in the past that when we divest -- we've generated proceeds and we have to replace those earnings in support of our long-term growth. And so that would be consistent that we would use divestiture proceeds for continued growth and reinvestment in the company.

Okay. And then before our next question, just remind everybody, we do have our business unit leaders, Tina, Rob and Joe are here; as well as our Vice President of ESG, [ Peter Farah ], is available for any questions. Next up, let's go to Andrew Lazar.

I'm just curious on the transformation actions that you're laying out. I'm curious if those actions would have been contemplated sort of irrespective of the margin compression the industry has seen over the last couple of years? Or if this is in response to some of that, maybe thinking that some of this could be structural for the industry going forward in terms of the margin pressure.

Maybe I'll start, Andrew. We have -- in our history, we've always had a continuous improvement mindset. And as you have seen over the course of the last several years, we have had different productivity initiatives, which we've talked about publicly. And as we've thought through and working through the pandemic and thinking about the transformation of the portfolio, which I just spoke to that what is going to be required for us to continue to be competitive and to continue to lead in our industry is to ensure that we are thinking about and building a muscle that is permanent, if you will, and that we are putting processes in place under Amy's leadership that are repeatable. If you think about Geoff's presentation, in terms of some of the commercial execution from a brand or sales perspective. One of the themes there was that we put some things in place and we were able to repeat them over and over and over again. The transformation initiatives are -- the philosophy is the same in that building processes and a philosophy and a mentality into the organization that will allow us to continue to generate productivity on a very repeatable basis versus a one-off project.

Next Bryan Spillane.

Two questions on coffee, maybe if we can bring Joe in. The first one, just as we're -- I think in the presentation, you talked a bit about K-Cup expectations and I think a growth CAGR of 3.5% annually over the next 5 years. So can you just break down -- do you -- does that assume that there's still going to be increased household penetration? Any assumptions around like attachment rate or usage. Really just trying to get an understanding of how did COVID actually increase, I guess, attachment rates? Or are we going to fade from kind of what we've seen in the last couple of years? And then I have a follow-up.

Yes, Joe, why don't you ahead and take it?

Okay. Now it's on. Yes, thanks for the question. Yes. I mean, clearly, we saw some -- we saw greater adoption. If you look at brewer sales through the pandemic, we saw greater adoption in the brewer, which drove K-Cup but I think if we look at the future, I think household penetration is still well below where we believe it will be, and there's continued growth there. So we believe that the K-Cup growth rate will be supported by the brewer adoption opportunity as well.

In terms of people using the machines more or less?

I think we talked about it on the last earnings call briefly. Obviously, the last year has been dynamic, and we saw, for the first time, a little bit of leakage from K-Cup back to roast and ground as consumers, I think, manage through inflation across the board. But I think for the long term, we believe that convenience opportunity and that broader adoption will continue to maintain.

Okay. And then just the follow-up is on liquid coffee. If we think about that as an opportunity, you've talked about it a bunch today. Where does that source from? So is it convenience? So it could source from instant or from pods? Or is it incremental, does it expand sort of coffee consumption because now it's a different platform. Just trying to understand kind of -- is it incremental? Or is it sourcing from within the coffee category.

Well, first, I would say it's dynamic, right? It's -- we continue to make early days on how we're seeing the consumer adopt this. But I think there's clearly a component of expansion, right, as we see consumers drinking cold coffee throughout the day. But as we think about format, whether that's liquid, whether it's concentrate, it could be an instant type product that's a no brew. So we think that there's multiple formats into that platform.

Okay. Next, we've got a question that has come in to the chat that I'll read from Peter Galbo. Mark I believe maybe start with this one. You mentioned potential acquisition, bolt-on opportunities in the coffee space. But can you comment a bit on where you see opportunities within snacks, whether frozen or shelf-stable?

Sure. I think we would probably avoid doing is getting real specific on which areas. But I think if you think about at the macro level, and I mean, we've been consistent talking about our acquisition interest is in rounding out our existing categories, and that is particularly coffee and our food business -- excuse me, coffee and our pet snacks business would be the primary focus is of those. Uncrustable, it is clearly -- we've got a tiger by the tail. And so the investment there is going to pay off. So we've got to remain focused on Uncrustables. The other comment we've made about acquisitions is if we were to enter a new category, which we are open to, it very simply has to meet 2 criteria. It has to be a growing category, and we really would need to acquire a leadership position in that category. If you think about uncrustable specifically and why it's so successful, it comes back to this option of low prep, so thaw and eat, although some of the products that you saw are heat and eat but thaw and eat is magic, if you will, and that's why the PB&J format is working so well. So low prep, no mass, on-the-go. I mean those are really the 3 areas that we're thinking about.

Rob Moskow?

Actually, 2 questions. One is on the 38% gross margin number that I think Amy kind of threw out there as the potential where margins can go. Can you give a little construct as to how you get there? It's -- I think margins are -- gross margin is 33% today? And how much of that is the productivity and mix and how much is maybe just kind of a natural evolution of where coffee prices might go. And then speaking of coffee prices, Joe, coffee futures are down a lot. You've raised pricing an awful lot on roast and ground. What should we expect for retail coffee pricing and roast and ground going forward?

Rob, as we consider the gradual improvement to our gross profit margin over time, really what's underpinning that is the favorable volume mix from our key strategic platforms and on Uncrustables, pet snacks and aspects of our coffee portfolio that enables us to start to support that margin restoration. Then the second component becomes an inflationary environment that begins to stabilize and we begin to experience some deflation but also improvement in stability not only within your supply chain environment, but also as we continue to see the benefits coming through our manufacturing environments. And then lastly, we have a continuous improvement mindset at the company. It's been consistent for 125 years. We will use the transformation office benefits not only to support reinvestment in the business, but also to help dollar profit growth and over time, margin percentage growth as well. And so those are the key enablers to that 38% over time.

I'll take a crack at the coffee question, but Joe jump in if there's anything to build. I think the first thing -- Rob, thank you for the question. I think the first thing is we've got a history of navigating a lot of volatility in green coffee very well throughout the time we've had the coffee business at Smucker. And I don't think this was any exception. We view ourselves as the leaders in the category. We want to act like leaders. And so we were aggressive in getting the cost, making sure that we were reflecting our input costs to the consumer on the way up. I also will tell you, this is where we love our portfolio of brands, right? We participate across the value spectrum. We think that gives us a lot of resilience in these times. But I think the last thing I'd leave you with is pricing agility was important on the way up. It will be important on the way down, and that will be the things that Joe will continue to lead us through.

And then maybe just pass the mic from back, Steve Powers. Right behind you, Rob.

So much of what you ran through, really -- it was a little about leveraging existing strength in premiumization and momentum and what one could argue are more discretionary impulse categories, whether it's human or pet snacking. I guess the question is, how do your investments and your strategies potentially change to the extent that the consumer, which has been net strong despite the pandemic, through the pandemic, so except that, that consumer environment weakens in the year or years ahead?

Mark, I'm happy to start. Yes. Thank you for the question. And I think that I'll make a comment that we made on coffee. I think really important as you look at our portfolio, we really participate across the value spectrum in several of the categories we compete in. Dog snacks is a great example, right? We kind of the entry point with Milk-Bone, but we've got a great strategy to participate in several other of the more premium segments in pet snacks, same goes with coffee. And so I think our strategy doesn't change. We want to continue to invest for growth in the categories that we see the opportunity for continued growth, but we're going to leverage a portfolio of brands to make sure that we're meeting all the different value spectrums across the category. Mark, I don't know if you have anything to add?

Good answer.

Chris Growe.

Tucker, you outlined before some of the factors that would help the gross margin recovery over time. One element that we've heard from a lot of companies is the supply chain inefficiency, just what's going on today that's weighing on the gross margin. Do you have a sense of how much your gross margin is sort of brought down by just those factors, things that if you get to a normal supply chain environment, we could get some number -- some benefit to our gross margin from just normal activities.

And maybe I'll begin and then John can support. As we think about that, as you've lost volume through some aspects of your portfolio, you're not seeing the full benefits of volume absorption through the manufacturing environment. So that would be one example. It's specific by each location and business. Another example will just be continued reliability across sort of inputs as that comes into the manufacturing environment. And then lastly is -- our teams are focused on a lot of different directions in this overall dynamic space. And that's one of the excitements about the transformation office. It enables us to really figure out the areas that we need to focus on and how we want to go after those activities or initiatives that ultimately support our manufacturing supply chain environments, but our broader corporate environment as well and the way we engage with other constituents. And so hopefully, a little bit of stability across all of those areas begin to benefit. To your point, we haven't quantified what that impact has been. But you obviously know the amount of inflation that has gone through our P&L over the last 2 years where we've had to deal with it, where we've had to recover through pricing and so the expectation is we need to manage inflation in a deflationary environment, and we begin to see that. And then lastly, is just strengthen the overall manufacturing and supply chain environment.

One of...

If I can -- because I love the question, and it's a great one. First, I'd love to just reinforce how our end-to-end supply chain has performed during the pandemic without standing. One of the reasons we were able to grow share in the early days of the pandemic was because of an incredibly resilient supply chain. And so I think that is a real strength of ours as we think about kind of relative to our competitors. There's no doubt, and I think it's a perfect time to be launching transformation as we're really in the midst of a little bit of stabilization. It's a great opportunity to relook at what have we learned? Where can we optimize? And there's no doubt that we see some all hanging fruit as we get back to stabilization to return some of this gross margin back to company.

I had one other follow-up question, if I could, just -- and perhaps for you, John, just -- it seemed like there's a playbook being developed for the brands. And I heard about optimizing brands, getting more efficient in promotions, reducing SKUs, reducing complexity, those kinds of things. It seems like cut across a lot of different brands. And so my question just would be like where are we in the time line for your major brands to go through one by one, but just in general, have we gone through that SKU rationalization, complexity and now we're on to investing for growth, just a general question there.

Yes. Let me start and I want Geoff to comment here because, honestly, it's been a tremendous partnership with Geoff's organization leading from the front line. But value creation has been a really big theme that we've been on for the last 2.5 years. And you referenced this notion of a playbook. We absolutely have a value creation playbook for every one of our top brands in the portfolio. Geoff and I review it biannually with our teams and ensure that we've got a very, very clear road map. And the levers are different by brand. I think that's really, really critical. And I think at times, you can get very generic with value creation, but how we're going to grow value creation on Milk-Bone, it's very distinct from Bustelo and Uncrustables and so forth. And so getting to that level of granularity and really understanding the path forward is critical. Geoff, I don't want to...

[indiscernible] maybe the only build would be 3, 4-plus years ago, if you looked at our plan, you would see that we were heavily reliant on 1 or 2 drivers. Where -- when John and I several years ago sat down, we needed to build a much more balanced growth plan and where we flex the levers depending on the brand and the category dynamics. So there's a balance to our growth that I think provides a much more confident and risk-adjusted profile to our overall algorithm, and that is markedly different than, say, 4-plus years ago.

Next, Ann?

Ann Gurkin with Davenport . And listening to recent comments at a Walmart presentation. They seem to talk about the stubborn pricing in the dry goods category or the stickiness of pricing in the center of the store and how Walmart was now working with those suppliers to get pricing down. So it just raises the question, which I think overhangs a lot of the segments as to pricing, what are you assuming for promotional environments if we go into an economic slowdown period or a more challenged consumer, how is Smuckers working with key customers like Walmart to ensure that pricing sticks where that margin sticks? And how do you manage pricing, promotion, margin across...

Maybe I'll start and Geoff please add. I think the headline, Ann, is that we have demonstrated consistently over many, many years that we have strong relationships with our customers. Walmart is clearly one of them, have an excellent relationship with them. And our responsibility as a CPG company, and obviously, our responsibility to you, all our shareholders, is to make sure that we're managing pricing cost in a prudent and responsible way, working with our customers to pass along commodity-driven pricing, both up and down. So we have tremendous confidence that we can continue to manage pricing in the way that we have. We do not view the promotional activity that we're seeing, both recently and going forward to be markedly different or the level of intensity to be markedly different from what we've seen in the past. Part of that is driven by the fact that we are in good categories that have a good -- not only the entire value spectrum, but a relatively low incidence of private label. And so we remain very comfortable that the dynamics that we're seeing are relatively normal and not out of the ordinary. So we think we can continue to manage that.

The only build would be -- another change that we made 3 or so years ago was to partner very deliberately with customers like Walmart on growing the category and that's why you saw us invest very heavily in category management. We picked up 11 category adviser ships and many with Walmart. And the conversations are different. The conversation is about how can we invest in media. How do we look at our joint data sources? How do we think about the full suite of growth levers to grow the total category. And it's been a big investment we made, and it's really starting to pay off, and it's changed the conversation with retailers.

Rob Dickerson?

Great. Thanks. Just a quick question for you, Mark, I feel like I have to ask. So in terms of M&A, you did just mention that you would be interested in entering a new category. I feel if you called that out, obviously, you've thought about maybe what that category could be -- so the question is, I think now what we're almost 7 years into the pet food journey, right, with no real change to the overall portfolio on a category basis since then, would you say as you get through maybe a little elevated CapEx period as we're seeing this year, maybe in the next year, that then the appetite for kind of the next step in the category development away from pet and coffee, but maybe still in snacks is there? Or just trying to get a general sense of kind of as you think forward of Smucker in 5 years, will you still be in these 3 specific areas? Or could there be potential for something new and different. That's all.

Yes, Rob, first of all, we've been super focused on what we've got. And it's not that we haven't been interested in looking but as you're well aware, the market has been pretty dynamic. Valuations have been pretty elevated. There has been some consolidation over the past few years. And so the availability of assets, I would tell you, has been somewhat limited. Again, the valuations have been relatively elevated. And so we've -- I think that has contributed to the fact that we haven't been super acquisitive is because we haven't found something that is of extreme interest and we really think we can grow. Meanwhile, we've been on this journey to really reshape our existing portfolio, and it's been working. And so an unintended benefit is that it's allowed us to focus on what we've got and really get crystal clear on whether it's SKU rationalization, which is something we'll continue to do but we've done that very significantly in Tina's business with our fruit spreads, we've gotten -- we eliminated quite a number of SKUs in the long tail and actually have seen growth as consumers have come back to some of the more dominant items in that portfolio. So that's a good example of just SKU rationalization and then, of course, some of the divestiture, the prioritization of where we invest and so forth. So definitely done really great work on what we've got. Yes, we're interested in other stuff, but it has to be the right stuff and we've got to make sure that we're prudent as we move forward in that journey.

Alexia?

So 2 questions. The first one, I think, is for Geoff. It seems to me that the pandemic period and now this period of inflation was a big opportunity to reallocate the marketing and selling expense within the body of the P&L as well as the promotion spending above the line. And I imagine that payments to retailers for e-commerce positioning in online channels might have been a piece of that. Could you just speak to what did shift? How did that spending really reallocate and whether there are any changes that we should expect going forward, particularly picking up on Ann's point about does promotional spending have to come up? And then I have a follow-up.

Yes, it's a really good question. I don't think it was because of the -- it was happening prior to the pandemic, but retailers -- certain retailers have made significant investments in their retail media networks. And they've moved from being, say, traditional shopper marketing to now having incredible capabilities that are grounded in data, rich data but allow us to advertise off-premise. So if we are now doing a media partnership with Walmart, that could show up on Google or Facebook and now when you look at the media -- total media spend, it used to be upper funnel, lower funnel. Now it's just one funnel. We've changed our structures internally to treat it that way. And my advice to the teams is a dollar is a dollar, and I want to invest it where it delivers the highest return. And what we're seeing from those retailers who have made that investment is that their performance in many cases is very, very strong, which is why our mix now is 40% retail media networks. And that's our choice based on the results that we're seeing. So I think media has just become one big bucket. And we will be indifferent to where we spend it as long as it's driving the returns.

Great. And as a follow-up on a very different topic, I'm not sure how to ask this most -- in the best way. But there was a comment about how at the August shareholder meeting, you've got rid of the voting ratio, the 10:1 voting ratio and you've also got rid of the poison pill. Why did that happen now? What was the catalyst that led to that? And does it change your policy on remaining independent?

Well, one of the things that we said earlier is it's really important for us to listen to our shareholders, and we do that. We have a shareholder outreach program, and we want to listen to what they think is important. A lot of those things they don't want and they don't like. So we do balance that with what's in the best interest of our company and what best meets our needs. So we will continue to ensure that we have the appropriate defenses against activism, but we will continue to listen to our shareholders and then try and balance those as best we can.

And at the end of the day, it's our obligation to deliver results. right? And that's the most important thing. So we are laser-focused on making sure that we're executing our strategy, that our strategy remains right and that we're delivering results for the benefit of our shareholders.

Cody?

It looks like you pulled forward the growth for Uncrustables or your target to reach $1 billion. You also are entering the meat and cheese portion or extending your Uncrustable brand into that category. Can you just talk about the role of the meat and cheese to hitting $1 billion? Or is that additive on top of it?

I think we'll let Tina answer.

Tina you want to go ahead.

Am I on now? Yes, I am. Great question. I think I mentioned the roll to $1 billion, almost 96% to 98% of that is peanut butter and jelly. So as we unlock capacity and we start to add on points of distribution and open new channels, PB&J is going to be our focus. But what I would also tell you is 25% of households don't eat peanut butter. So that's where meat and cheese will come in over the next few years and continue to offer a variety. But to meet that $1 billion, it's really PB&J.

Max?

Thanks for the question. It's on Pet for Rob. You've talked about playing across a variety of price tariffs today. And I'm curious in which price or you see the most opportunity going forward? It would seemed to me that premiums still have been driving the growth. I realize there are some near-term data points that would suggest that that's not the case right now. Thanks for the question.

Yes. Great question. Thank you for it. I'll answer the question for snacks and for food and maybe snacks first. I think the majority of our soft and chewy in our biscuit business, you would see that in the kind of the mainstream portion of the category of snacks. I think our opportunities we've articulated is to premiumize dollar per ounce, dollar per treat occasion, and that's what you've seen as we've entered premium biscuits as well as our launch in the long-lasting chewies. On the food business, we haven't talked as much about that outside of Meow Mix. I think we play in a variety of different tiers. We're in an interesting point right now where mainstream food growth, particularly dog is actually eclipsing from a growth perspective, premium. They're both growing, but mainstream is actually growing a little bit more. I think, again, 9Lives, Kibbles 'n Bits, we don't talk about them as a lot people invest actually gaining share right now. They're play important roles in our portfolio. I think we're we feel very confident about the roles that they play for us. And Nutrition is growing share as well in dry dock. So we're an interesting point right now. I think, ultimately, in the long term, you'll continue to see premium particularly in dog outgrowing mainstream. But when that happens, 12, 16 months from now, I think mainstream has a decent run in front of us just given the dynamics of what the consumer is facing.

Okay. We've got one more question that's come through our line, and then I think we'll wrap up this section. Mark, I think you touched on this earlier, but I'll ask it. Can you provide a longer-term perspective on where you see dog food standing in the portfolio as you think about continuous reshaping?

I'm sorry, I didn't quite hear.

So I'll read that again. Sorry. Geoff, can you bring the question back, it disappeared on me.

The role of dog food.

Okay. Can you provide a longer-term perspective on where you see dog foods standing in the portfolio as you think about continuous reshaping.

Well, I think we've already answered that, right? I mean I think as we think about our pet portfolio today, we've been so clear over the last couple of years that we've got to continue to focus on snacks and cat, particularly Meow Mix. And Rob, you said it is that we got crystal clear on knowing where we can win and play. Clearly, dog food does play an anchor role in our portfolio that it provides some stability we have done a good job of stabilizing of optimizing the portfolio, and we will continue to make sure that we're doing that, but really driving growth in those other 2 areas is the focus.

Okay. And with that, I'm going to turn it over to Mark for some closing comments.

Okay. Well, again, it's been a long morning, but at least for me, it's been incredibly exciting. It's been a long time since we've been able to be with all of you in person. I want to thank each and every one of you for being here in person, it really is nice that we can actually be in the same room together. I want to thank our analysts for joining us last night for most of you who have joined us for a cocktail. I know Rob Moskow, you gave me permission to call you out and pointing out that you -- you said that you've run out of holes or nearly run out a hole to poke in our story, and I take that as a huge complement. So I want to just -- I want to thank you for that. And I hope that in all seriousness that what you come away with is the excitement that we have. And I'd like to thank my team. Obviously, my leadership team who is here on stage and all of the Smucker team that is here, many folks behind the scenes that have helped with the preparation and the coordination of the event. I would really like to thank all 7,000 of our Smucker employees for their continued focus and dedication. And I really would like to thank the staff here of 583 Park Avenue for hosting us today. You guys did a fantastic job, everyone that's on the webcast. But if I could just have a round of applause for the staff here because you guys were awesome. Thank you so much. And just a really quick recap, if I could, to some of the key messages that we hope that you all take away from today's presentations, which really differentiates our company as being uniquely positioned for continued growth. The first is our strategy remains focused on a strong portfolio of iconic and leading brands in the attractive categories of pet, coffee and snacking. Second, that we are executing through a consumer-centric lens to account for rapid changes in both the retail and consumer landscapes, Third, our Thriving Together agenda and integrated ESG framework supports our growth and our success while making a positive impact on those who rely on us. Fourth, that we do have a strong and long history of developing strong top and bottom line growth. And with our current initiatives and plans, we are well positioned for future growth. And then finally, just all of these factors supporting strong cash generation and that we have a proven history of deployment of responsible deployment. So in closing, we really hope that you come away from today's event with a renewed appreciation for why Smucker remains a sound investment. To all of our shareholders, we thank you for your support and trust in our company and that we wish all of you a safe and wonderful holiday season. Have a great day.