We have an obligation to make sure we can supply food: The J. M. Smucker Company CEO

The J. M. Smucker Company CEO CEO Mark Smucker joins Yahoo Finance’s On The Move to weigh in on how the company is keeping up with demand as the coronavirus continues to spread across the globe.

Video Transcript

ADAM SHAPIRO: An hour and a half south of Cleveland, Ohio, just west of Canton, you will find Orrville, Ohio, home of the Smucker Company. And CEO and President Mark Smucker joins us now to talk about the steps that company is making not only to help feed the United States, but to keep its employees healthy and employed. One thing you've done is provided a one-time hardship bonus of $1,500 to your manufacturing and service employees. Tell us more about what Smucker's is doing.

MARK SMUCKER: Well, Adam, first of all, thank you for having me. You know, I would point out at the beginning here, this is a humanitarian crisis, and we have got to make sure that we do not give in to the fear. We do have optimism, and we know that the human race can get through this crisis. It is a tremendous opportunity for us, as a company, to step up and serve the consumers of North America, our customers, and then, of course, the communities in which we live, and, as you mentioned, our employees. So although we are seeing unprecedented demand across our entire business for essentially all of our products, obviously, we have an obligation to make sure that we can supply food to North America, particularly Canada and the US.

So, as you pointed out, we are making sure that we're keeping our employees safe. Over 2/3 of our employees actually do have to go to work. We have 25 plants. At every one of those plants, we're doing things like temperature checks. We have to make sure that we provide for those individuals, that they have the flexibility to also care for their loved ones. As you pointed out, $1,500 hardship bonus and then 12 weeks of pay continuation for those individuals who cannot go to work or do their job. We have avoided doing any layoffs whatsoever and are making sure that we take care of those employees and that they feel safe and comfortable in the workplace.

JULIA LA ROCHE: Mark, it's Julia La Roche. I want to talk about the consumer side of the business and how you all are keeping up with demand. I got to tell you, I stopped at my freezer with the Uncrustables, and you're definitely seeing the products on the shelves and falling off the shelves. How are you thinking about keeping up with demand? Are you all changing anything when it comes to the manufacturing to get the right products that folks want on the shelves and in the freezers?

MARK SMUCKER: Well, Julia, yes. As you pointed out, PB&J sandwiches is one of the most consumed sandwiches in the nation. And so between Uncrustables and our Jif brand and Smucker's fruit spreads, we have a responsibility to continue to supply those products. We are adapting. We have adapted significantly by, for example, in our Jif plant, focusing production exclusively on the most important items-- Jif Creamy, a lot of Jif Creamy actually, and, to a lesser extent, Jif Crunchy.

So you'll see some of the peripheral items we're not producing as much. We're delaying some of our innovation launches so that we can really focus on making those items which are most in demand. And we've been able to flex our facilities very quickly in order to accommodate the demand. And that goes across our entire business-- pet food, as well as our coffee business as well.

JULIE HYMAN: Mark, it's Julie Hyman here. I know, as we were talking about, you're giving your employees a decent amount of flexibility in terms of if they need to care for someone. How many people are you down? Have you had a lot of people who have said, listen, I have an underlying condition. I don't feel comfortable coming to work. And are you replacing those folks with temporary workers? Because, as you said, you've got to keep up with the demand that's out there right now.

MARK SMUCKER: We have not had any significant labor shortages at this point. We do have a number of contingency plans in the event that we do see some of that. But up to this point, I would say I am incredibly proud of our employees, because they also recognize that they have a responsibility, but they are very grateful that the company is providing these different opportunities for them to be flexible. But at this point, really no major work shortages.

ADAM SHAPIRO: Mark, as you point out, I don't think there's a cupboard in the United States that doesn't have one of your products in it. But what about getting those products delivered-- the different trucking companies and the men and women who drive those trucks-- are you starting to see any kind of reluctance from those folks to deliver to hot spots say like New York or Chicago, New Orleans?

MARK SMUCKER: We really are not. You do hear isolated cases of, you know, the transportation network feeling some strain. We have been very fortunate in that we have been able to ensure that our products do get delivered to the various markets. And we're working very hard every day, talking to all of our customers to make sure that we allocate the right amount of our brands-- whether it's Rachel Ray Nutrish or Milk-Bone or Folgers Coffee-- ensuring that we at Smucker really do get the right products to the right place at the right time.

JULIA LA ROCHE: Mark, it's Julia again. I want to ask you kind of a two-part question.

MARK SMUCKER: Sure.

JULIA LA ROCHE: I guess, first, we're going to talk about this for years to come. We're going to talk about this event. Everyone will. So I want to get your take on how do you think this will change consumer behavior in the future?

And then the second part of that is, since you are a CEO of a pretty sizable company and you're taking care of your employees here in this time of need, how do you think the responsibility that businesses will have toward their employees-- their stakeholders as well, if you look at what the Business Roundtable signed last fall-- will also change?

MARK SMUCKER: Well, let me start with the first part of your question first. It is very difficult to anticipate how much consumer behavior will change. We do believe that there will be a shift in a couple areas. First of all, core brands like Folgers and Jif, you know, those are categories that are very mature. As we see consumers coming back to those brands, we do believe that some of that shift back to these mainstream brands may stick. I also would point out that, particularly in pet food, we are seeing an acceleration toward more online purchases of pet food, much more than we would have expected. So the tendency to buy pet products online, I also believe that that will be sticky.

The second part of your question, I really think that what this will change-- if you look at what the Business Roundtable did a few months ago-- I think this will just heighten the already important responsibility that we all have to our communities. You know, we just recently deployed additional funds to Feeding America, the United Way, and the Red Cross, in addition to all of the other normal food donations that we would do to food banks around the country. I think it just heightens the fact that we, as corporate citizens, have a responsibility to the communities where we work, and, more broadly, to the human condition. And so I think this just amplifies the need for good corporate citizenship.

ADAM SHAPIRO: We appreciate your being here, Mark Smucker. You're the CEO from the JM Smucker Company. And we should point out that your stock today is trading higher. It's up over 4% at $107 a share. All the best to you and the staff at JM Smucker for keeping us fed.