The J. M. Smucker Company 2016 Annual Report

2016 ANNUAL REPORT 2016 FINANCIAL HIGHLIGHTS OUR BRANDS

The J.M. Smucker Company For nearly 120 years, The J.M. Smucker Company has been committed to offering consumers quality products that help bring families together to share memorable meals and moments.

YEAR ENDED APRIL 30,

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) 2016 2015

Net sales $7,811.2 $5,692.7

NET INCOME AND NET INCOME PER COMMON SHARE

Net income $ 6 88.7 $ 3 44.9

Net income per common share – assuming dilution $ 5.76 $ 3. 33

NON-GAAP INCOME AND INCOME PER COMMON SHARE (A)

Non-GAAP income $ 78 4.6 $402.5

Non-GAAP income per common share – $ 6. 57 $ 3. 8 8 assuming dilution

COMMON SHARES OUTSTANDING AT YEAR END 116,306,894 119,577,333

NUMBER OF EMPLOYEES 6,910 7,370 (A) Refer to “Non-GAAP Measures” in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP ﬁnancial measure. TM

CONTENT

™ U.S. RETAIL COFFEE 4 U.S. RETAIL CONSUMER FOODS 8 U.S. RETAIL PET FOODS 12 INTERNATIONAL AND FOODSERVICE 16 ® SUSTAINABILITY AT SMUCKER 20

Why We Are, Who We Are...Our Culture – Our Purpose Please Open ▸ 2016 FINANCIAL HIGHLIGHTS OUR BRANDS

YEAR ENDED APRIL 30,

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) 2016 2015

Net sales $7,811.2 $5,692.7

NET INCOME AND NET INCOME PER COMMON SHARE

Net income $ 6 88.7 $ 3 44.9

Net income per common share – assuming dilution $ 5.76 $ 3. 33

NON-GAAP INCOME AND INCOME PER COMMON SHARE (A)

Non-GAAP income $ 78 4.6 $402.5

Non-GAAP income per common share – $ 6. 57 $ 3. 8 8 assuming dilution

COMMON SHARES OUTSTANDING AT YEAR END 116,306,894 119,577,333

NUMBER OF EMPLOYEES 6,910 7,370 (A) Refer to “Non-GAAP Measures” in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP ﬁnancial measure. TM

CONTENT

™ U.S. RETAIL COFFEE 4 U.S. RETAIL CONSUMER FOODS 8 U.S. RETAIL PET FOODS 12 INTERNATIONAL AND FOODSERVICE 16 ® SUSTAINABILITY AT SMUCKER 20

Why We Are, Who We Are...Our Culture – Our Purpose Please Open ▸ WHY WE ARE, WHO WE ARE... OUR PURPOSE OUR CULTURE Helping to bring families

A culture of dotting the i’s and crossing the t’s… together to share memorable meals and moments. Of doing the right things and doing things right…

A culture of growth – individual and as a company. Being together with the ones we love isn’t just a pleasant way to spend time — It’s who we are. It’s because of who we are. it’s vital to a healthy, happy, fulﬁlling life. It’s a result of living our Basic Beliefs… In fact, the more family and friends Our Commitment to Each Other. To our consumers spend time with each other, and to our customers. the richer their lives become. As we look to the future of unlimited possibilities, we recognize the principles that are We believe we can help strengthen instrumental to our success… families through the memorable meals and A culture deeply rooted in our Basic Beliefs… moments they share, and we can help Guideposts for decisions at every level… make every day a little more special Why we are who we are. by nurturing the bonds that bring A culture that encourages commitment to each other… people together, as well as people

Clear communication and collaboration… and their pets closer together.

Vision…A culture of appreciation. And the stronger families are today, A family-sense of sharing in a job well done… the stronger our society will be tomorrow.

Where every person makes a diﬀerence. Quite simply, life tastes better together. WHY WE ARE, WHO WE ARE... OUR PURPOSE OUR CULTURE Helping to bring families

A culture of dotting the i’s and crossing the t’s… together to share memorable meals and moments. Of doing the right things and doing things right…

Clear communication and collaboration… and their pets closer together.

Vision…A culture of appreciation. And the stronger families are today, A family-sense of sharing in a job well done… the stronger our society will be tomorrow.

Where every person makes a diﬀerence. Quite simply, life tastes better together. DEAR SHAREHOLDERS AND FRIENDS,

It has been an extraordinary year of growth, innovation, and transformation for The J.M. Smucker Company as we strengthened our portfolio of brands, connected with customers and consumers in new ways, and invested in new capabilities – all while integrating the largest acquisition in our Company’s history.

ith the addition of Big Heart Pet Brands (“Big Heart”), • Cash provided by operating activities of $1.5 billion; and Wwe now have three platforms for growth fueled by a strong portfolio of leading and iconic brands to deliver products • More than $750 million in cash returned to shareholders in that engage, delight, and inspire today’s consumers as we fulfill the form of share repurchases and dividends. pet snacks through the launch of products such as • Delivering the business: The strong performance of our Our Purpose of helping to bring families together to share Meow Mix® Irresistibles® cat treats, which have rapidly core business is the engine that drives our success, and our memorable meals and moments. One year after the acquisition of Big Heart, we have executed gained market share. overall growth will continue to come from an optimal blend a seamless integration of the pet food and pet snacks business of core performance, innovation, and new ventures. As we continue to evolve and transform our Company for and evolved our organizational structure to sustain long-term ENGAGING WITH CONSUMERS the future, we were pleased to announce in fiscal 2016 the growth. We remain committed to achieving $200 million in We believe the ability to develop and nurture emotional • Building new capabilities and enhancing existing capabilities: election of Mark Smucker as President and Chief Executive annual synergies by the end of fiscal 2018, with $37 million bonds between our brands and consumers is one of our core We have a long tradition of industry leadership built upon Officer. Mark represents the fifth generation of the Company’s in realized savings in fiscal 2016. competencies, with digital marketing as a key component meaningful partnerships and best-in-class capabilities. Having founding family and is the sixth Chief Executive Officer in of these efforts. Social media continues to provide an ideal the right systems, processes, and organizations in place our Company’s 119-year history. Mark’s appointment reflects LEADING AND ON-TREND BRANDS platform through which to engage and communicate with allows us to better serve our constituents. our Board of Directors’ thoughtful approach to succession We operate with a consumer-first mentality by bringing new consumers, who often view food as an experience to be planning and underscores our focus on the long term. Mark has products to market that address consumers’ ever-changing shared. Today, we manage more than 100 digital and social • Prioritizing our resources for our big ideas: We will ensure consistently demonstrated a passion for our culture, visionary preferences. Our evolved Vision emphasizes #1 and leading media properties supporting our holistic view of consumer we have appropriate resources to support building both our leadership, and commitment to growth that will help our brands while acknowledging the importance of emerging, engagement and providing valuable insights that can directly Smucker’s and Jif brands to $1 billion, growing our total pet Company continue to flourish in the years to come. on-trend brands to our portfolio. This approach contributed influence future innovations. snacks portfolio to $1 billion, and driving growth in coffee. positive results in fiscal 2016, with net sales from products Richard Smucker transitioned to the role of Executive launched in the past three years representing 10 percent of Our sponsorship of the 2016 U.S. Olympic and Paralympic With these priorities in place, we are well-positioned to Chairman, serving as Chairman of the Board of Directors total net sales. In order to maintain this pace, we are focused Teams provides a unique opportunity to reach multiple leverage our portfolio of leading and emerging brands and providing counsel on major strategic decisions to the on launching the right products with a go-to-market strategy generations of consumers as we prepare to share the while investing in new capabilities and innovations to Executive Leadership Team. Richard will continue to be that allows us to engage with consumers wherever they shop. excitement of the 2016 Rio Olympic Games with our fuel meaningful top-line growth. a cultural steward, enhancing our Company reputation consumers and customers through exclusive retailer and visibility with key customers and the community, in • In our coffee business, we fortified Folgers® leadership in activation, packaging, advertising, digital, and public We extend our deep appreciation to our shareholders for your addition to advancing our government affairs and industry roast and ground coffee and earned positive consumer and relations activities for four leading brands – Smucker’s, continued support of our Company and to our nearly 7,000 leadership efforts. retailer response with the introduction of Dunkin’ Donuts® Folgers, Jif , and Smucker’s Uncrustables®. talented employees, whose diligence and teamwork have K-Cup® pods. In addition, the smaller but fast-growing helped deliver another successful year. We continue to be This leadership transition comes at an exciting time for Café Bustelo® brand posted double-digit sales increases for PRIORITIZING FOR THE FUTURE humbled by their efforts, as well as by their commitment to our Smucker as we continue to deliver record results and with the second consecutive year as we focused on broadening Looking ahead to fiscal 2017, we are confident in continuing Company and each other, as we work together to ensure the our brands leading in key market categories. Our fiscal 2016 the brand’s appeal to millennial consumers. our history of long-term growth and remain committed to “best is yet to come”. performance reflects the contributions of several key growth increasing shareholder value as we fulfill Our Purpose. With a initiatives, including launching on-trend products and • Within consumer foods, we launched new products strong foundation, clear strategy, and the right team in place delivering against our synergy and working capital targets. that address consumers’ desire for authenticity, simple to execute our strategy, we look to accelerate our growth and Sincerely, Highlights for fiscal 2016 include: ingredients, and convenience with Smucker’s® Fruit & Honey™ build on our momentum by focusing on four key priorities: fruit spreads, Jif™ Peanut Powder, and snack bar offerings • A 37 percent increase in net sales to $7.8 billion, reflecting from Jif® and Sahale Snacks® as a few examples of new, on- • Nurturing our culture: Guided by our Basic Beliefs of a full-year contribution from Big Heart; trend products. Quality, People, Ethics, Growth, and Independence, our employees are committed to preserving our unique • An operating income increase of 48 percent to $1.1 billion, • In pet foods, expanding distribution of the Natural Balance® culture, which fosters an environment in which every Tim Smucker Richard Smucker Mark Smucker with the contribution of U.S. Retail Pet Foods and U.S. Retail brand in the pet specialty channel helped drive growth in employee understands our Strategy and collaborates Coffee segment profit as key growth drivers; our premium segment. We also broadened our portfolio in to achieve more for our Company. June 21, 2016

2 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 3 DEAR SHAREHOLDERS AND FRIENDS,

2 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 3 U.S. Retail COFFEE

The U.S. at-home retail coffee category continues to grow, with a compound annual growth rate of 10 percent during the past five years. Smucker remains the clear market leader in the category, led by Folgers and Dunkin’ Donuts and enhanced by our fast-growing Café Bustelo brand. We participate in all key segments of at-home coffee – mainstream roast and ground, one- cup, premium, instant, and the growing ready-to-drink category – at a variety of price points, providing consumers with quality, convenience, value, and choice.

4 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 5 CAPITALIZING ON STRONG AT-HOME COFFEE DEMAND

A daily ritual, an indulgence, a shared experience, an opportunity for flavorful variety – coffee is all this and more to millions of consumers. Our coffee business is growing along with consumer demand – we lead the $9.4 billion at-home coffee category with a 27 percent dollar share. In fiscal 2016, our U.S. Retail Coffee segment net sales totaled $2.2 billion as we drove growth through initiatives that delivered value, convenience, and innovation to consumers. For the year, we achieved record segment profit, which increased 18 percent to $646 million. Consumers embrace at-home coffee across all types and forms. Nearly 80 percent of Americans drink coffee, with four out of five cups consumed in the home. While the one-cup revolution has been a significant growth driver, there is also strong demand across all platforms – from automatic drip to espresso, French press, and instant.

GROWTH FOR AMERICA’S MAINSTREAM The overall premium segment of at-home coffee represents COFFEE LEADER $2.2 billion in annual retail sales, and we are well-positioned he largest coffee segment by retail sales volume, in the segment, with our Dunkin’ Donuts retail bagged Tmainstream roast and ground remains the preferred coffee. In fact, Dunkin’ Donuts Original Blend is the #1 form of coffee in a majority of households, and Folgers item in the premium category. While we discontinued our is the leader in mainstream coffee. To further solidify the smaller Millstone® brand, we are adding new varieties and brand’s leadership position, in fiscal 2016 we transitioned flavors to the Dunkin’ Donuts line in fiscal 2017, including several of our Folgers offerings to a reduced canister size Dunkin’ Donuts Dunkin’ Dark® coffee, which will contain to offer lower price points. This initiative, coupled with an 30 percent Rainforest Alliance Certified™ coffee. The Dunkin’ additional price decline that reflected lower green coffee Donuts brand portfolio is characterized by a wide array of costs, had a positive effect on sales volume and contributed varieties and flavors, including the Dunkin’ Donuts Bakery to meaningful growth in our mainstream roast and ground Series® coffee, and we will continue to offer seasonal flavors unit sales and market position. to help satisfy consumers seeking variety.

POSITIONING OUR COFFEE PORTFOLIO For many consumers, coffee is more than a beverage – it’s FOR THE LONG TERM a way to connect with family and friends, and Café Bustelo Millions of U.S. households enjoy the convenience and is uniquely positioned to help foster those connections. personalization of a one-cup serving. In fiscal 2016, we Our strategy to grow the brand focuses on both the Café significantly expanded our offerings with the launch Bustelo core Hispanic consumer base as well as millennial of Dunkin’ Donuts K-Cup® pods. Consumers responded consumers. In fiscal 2016, we took an experiential marketing positively, as our five Dunkin’ Donuts varieties quickly approach to help build awareness of Café Bustelo with gained a solid following in the competitive one-cup market, millennial consumers through participation in music achieving nearly $220 million in retail sales in its first year festivals, campus initiatives, and pop-up cafés staged in on the market. The success of our Dunkin’ Donuts offerings major cities. This proved highly effective in core markets Our coffee business is growing along strengthened our total K-Cup® pod market position to nearly and contributed to double-digit sales growth last year 15 percent across all our brands. We anticipate continued based on the strong performance of roast and ground as well with consumer demand – we lead the growth, as consumer repeat rates remain strong and as we as K-Cup® pod offerings. anticipate introducing new varieties and seasonal offerings $9.4 billion at-home coffee category to the Dunkin’ Donuts K-Cup® pod line. with a 27 percent dollar share.

SEGMENT AS A PERCENTAGE OF NET SALES 29%

THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 7 U.S. Retail CONSUMER FOODS

From breakfast to lunch and dinner, and snack times in between, our iconic brands, such as Jif, Smucker’s, and Pillsbury™, coupled with emerging, on-trend brands like Santa Cruz Organic ®, Sahale Snacks , and truRoots®, help address the unique preferences of today’s consumers. We participate in multiple center-of-the-store categories with respected brands of fruit spreads, nut butters, baking mixes and frostings, shortening and oils, natural and organic beverages, organic grains, and fruit and snack mixes.

8 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 9 LEVERAGING THE POWER OF ICONIC BRANDS

In fiscal 2016, we made continued progress toward elevating Jif and Smucker’s into $1 billion brands. Leading with innovation, we created new products and usage occasions for Jif peanut butter and Smucker’s fruit spreads and leveraged the continued growth of Smucker’s Uncrustables sandwiches. While strong brands are important, it’s also critical to have the right brand portfolio, and in fiscal 2016, we made the decision to divest our U.S. canned milk business. Net sales for U.S. Retail Consumer Foods totaled $2.3 billion, while segment profit remained steady at $460 million, supported by a one-time gain related to the divestiture.

GROWING JIF AND SMUCKER’S consumers. We also see more opportunities to evolve our THROUGH INNOVATION Smucker’s portfolio in line with mindful snacking trends in e are pleased with our overall spreads business, as both the years ahead. WJif peanut butter and Smucker’s fruit spreads grew volume share over the past year. This is supported by a focus The Sahale Snacks brand also aligns well with the mindful on innovation that is on-trend. Since acquiring the Jif brand snacking trend by offering a unique portfolio of fruit and nearly 15 years ago, we have leveraged its strong brand equity snack mixes and layered nut bars made with a combination to vastly expand the portfolio with value-added items – of premium nuts, dried fruits, and spices that are Non-GMO introducing convenience offerings with Jif To Go® and Jif To Project® Verified, with no artificial preservatives or flavors. Go Dippers ®; providing a no-stir natural offering with Jif Natural peanut butter spread; launching snack items such FINDING OPPORTUNITIES FOR BAKING as Jif Whips ® spreads; and entering the specialty spreads BRANDS AND NATURAL FOODS category with Jif Almond butter, Jif Cashew butter, and Jif Despite strong market positions and iconic brands like Hazelnut offerings. Crisco® and Pillsbury, the overall baking category remains challenged, reflecting shifts in consumer preferences and Our emphasis on format and flavor innovation was at the aggressive competitive pricing. As a result, we are focused forefront in fiscal 2016, as we continued to expand the on value-added innovation across our portfolio, including portfolio with the introduction of Jif™ Bars, which combine specialty oils such as Crisco Organic Coconut Oil, gluten-free peanut butter and granola for a delicious, easy-to-eat, on- baking mix varieties, and products with simple ingredients the-go snack. We also launched new Jif Flavored spreads. such as the Pillsbury Purely Simple™ line of baking mixes Meanwhile, Jif Peanut Powder meets the growing consumer and frostings. demand for plant-based protein and helps expand brand usage as an easy addition to smoothies and baked goods. In the natural foods business, we have traditionally enjoyed a strong position in the natural grocery channel, and today Growth of our Smucker’s brand was led by Smucker’s we are benefiting from the growth in natural and organic Since acquiring the Jif Uncrustables sandwiches, which realized its 17th consecutive products at conventional grocery retailers. Our R.W. Knudsen quarter of double-digit growth, with volume increasing Family® and Santa Cruz Organic brands together represent brand nearly 15 years 26 percent for the full year. With 7 percent household a dominant leadership position in the natural beverages penetration, Smucker’s Uncrustables sandwiches have category. We are also pleased by the further potential of our ago, we have leveraged significant room for growth, as we position the brand as truRoots brand in the growing natural grains, rice, and pasta an on-the-go lunchtime and snacking option for consumers categories. As we look to increase our exposure to emerging, its strong brand equity of all ages. For our Smucker’s fruit spreads, we look to on-trend brands, we have acquired a minority interest in inspire new usage occasions and drive relevancy through Numi, Inc., a manufacturer and marketer of premium, fair to vastly expand the authentic innovation. For example, our Smucker’s Fruit trade, organic teas, and are excited about the opportunities & Honey fruit spreads feature simple ingredients and are this investment provides in the organic tea category. portfolio with value- sweetened with honey, attributes that resonate with today’s added items. SEGMENT AS A PERCENTAGE OF NET SALES 29%

11 10 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT U.S. Retail PET FOODS

Meow Mix, Milk-Bone®, Natural Balance, and Kibbles ’n Bits® are among the staple brands for pet parents, and we are strengthening these brands through expanded distribution and product innovation. We hold the #1 market share position in dog snacks and #2 position in dry cat food, and enjoy a strong presence in premium pet food and pet snacks. In ﬁscal 2016, we reached several milestones toward the full integration of Big Heart, the largest acquisition in Smucker history.

13 EXPANDING OUR REACH TO INCLUDE THE ENTIRE FAMILY THROUGH QUALITY AND INNOVATION

Pet snacks and our premium dog food portfolio are the two foremost growth drivers in U.S. Retail Pet Foods and both delivered strong performances in fiscal 2016. Mainstream dog food faced challenges during the year, which impacted overall segment results. For the year, segment net sales totaled $2.3 billion, while segment profit was $392 million.

et food and pet snacks is the largest and one of the Natural Balance premium pet food for dogs and cats Pfastest-growing categories in which we participate, enjoys a strong consumer loyalty rate in the pet specialty representing $29 billion in annual retail sales. It’s easy to channel. Natural Balance products are made from carefully see why – more than two-thirds of U.S. households have at selected ingredients that include high-quality fruits and least one family pet. Moreover, pet ownership has grown vegetables and unique protein sources. In fiscal 2016, among nearly every demographic segment, most notably we further expanded the brand’s distribution in the pet millennials and empty nesters. As is true with other specialty channel, which contributed significantly to sales Smucker businesses, consumer insights drive and guide growth during the year. We look to continue to strengthen our pet food and pet snacks business to deliver industry- relationships with our retail partners in 2017. leading innovation. Many of the same consumer food trends are equally important within the pet food and pet snacks Last year, we introduced a new line of cat treats, Meow Mix category, including migration toward premium options, Irresistibles, as a significant enhancement to our Meow protein, simple ingredients, and the growth of snacking. Mix portfolio. Available in crunchy or soft varieties, these snacks are made with real salmon, chicken, or tuna, and Snacks are fast-growing within pet food and our brands are no artificial flavors. Within just a few months of its launch, driving the growth of the category. Led by the Milk-Bone Meow Mix Irresistibles has earned a 4 percent dollar share in brand, we enjoy a 40 percent dollar share in the $2.1 billion the cat treats category. dog snacks category. New product innovation has been a strong contributor to growth. Milk-Bone Brushing Chews® We are especially excited about the in-store activities we Daily Dental Treats are a transformative product in pet oral have planned across our brand portfolio reflecting our care. More innovation can be found in Milk-Bone Good partnership with the animated film “The Secret Life of Pets,” Morning® Daily Vitamin Treats, which come in Healthy which will be released this summer. Joints, Healthy Aging, and Total Wellness varieties and offer a specially formulated blend of nutrients not found in most While the more traditional and mainstream pet brands Pet food and pet snacks is the dog food. faced competitive and deflationary pressures, we will continue to focus on opportunities to leverage our research largest and one of the fastest- and development experience, production capabilities, and portfolio of brands to ensure we are offering consumers the growing categories in which we right products to meet their pets’ needs. participate, representing $29 billion in annual retail sales.

SEGMENT AS A PERCENTAGE OF NET SALES 29%

THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 15 INTERNATIONAL and FOODSERVICE

Our International and Foodservice businesses include foreign sales and domestic sales outside U.S. retail channels. Our international operations are focused primarily on Canada, Mexico, and China. We are also a preferred supplier of food and beverages to North American foodservice operators, including casual and ﬁne dining establishments, schools and universities, hospitals, and business and industry customers. STRENGTHENING OUR POSITION IN FOODSERVICE AND INTERNATIONAL MARKETS

International and Foodservice operations demonstrated positive momentum in several respects in fiscal 2016, including the performance of our coffee and baking portfolio of brands in Canada and the benefits of Smucker’s Uncrustables sandwiches’ re-entry into the United States Department of Agriculture (USDA) school foodservice program. However, the effect of foreign currency from a weak Canadian dollar had a significant impact on reported results, creating an approximate $60 million sales headwind for the year. Net sales totaled $1.1 billion, and segment profit increased 12 percent to $157 million.

anada is by far our largest International business and to strengthen our distribution and retail relationships. Caccounts for more than 80 percent of our International In China, our minority ownership in Seamild, a leader revenues. In fiscal 2016, and in constant currency, our in China’s growing oat category, continues to provide a Canadian net sales realized a year-over-year increase, valuable opportunity to expand our knowledge of Chinese including a full-year contribution from the pet food and consumers, as we continue to build our team and further pet snacks business. In grocery, we enjoy strong positions invest in this market. in several areas, with the #1 branded position in six center- of-the-store categories. These include strong brands within Our foodservice business had a strong performance in fiscal the baking aisle, a strategically important and profitable 2016, driven in part by Smucker’s Uncrustables sandwiches, category. Robin Hood® has been voted most trusted as we realized the benefits of the brand’s re-entry into the baking brand by Canadian shoppers based on the 2015 USDA school foodservice program. Foodservice is evenly BrandSpark Canadian Shopper Study, and Carnation® divided between beverages and food, with a strategy to evaporated milk and Eagle Brand® sweetened condensed focus on segments within the industry where brands milk are also consumer favorites. In the condiments aisle, matter and where we see opportunity for sustained growth. our Bick’s® brand commands an impressive 58 percent We target segments in which our brands are highly visible to dollar share in pickles. In coffee, Folgers has grown to consumers, such as restaurant tabletops, tray lines in health become a more than $100 million brand in Canada, care, and hotel lobbies. In beverage, we provide pre-packaged increasing our market position in mainstream coffee. We coffee as well as a complete system of on-demand liquid support these and other leading brands through a robust coffee, including equipment and service. innovation pipeline and marketing efforts.

With the addition of our pet food and pet snacks brands, we are realizing promising opportunities for growth in Canada. We expect pet food and pet snacks to be a signiﬁcant driver of our Canadian business for the long term, as we continue Canadian net sales realized a year- over-year increase, including a full- year contribution from the pet food and pet snacks business.

SEGMENT AS A PERCENTAGE OF NET SALES 13%

THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT 19 SUSTAINABILITY AT SMUCKER

Create a better tomorrow by focusing on preserving our culture, ensuring our long-term Economic viability, driving positive Environmental impact, and being Socially responsible. Respect for the environment and a strong commitment to actively supporting the communities we serve have been deﬁning attributes of our Company since our founding nearly 120 years ago. As always, Our Purpose of helping to bring families together to share memorable meals and moments drives our commitment to doing the right things and doing things right for the environment and the communities we serve.

We continue to execute our Sustainability Strategy and have reached ambitious goals, including purchasing 10 percent of our total retail coffee from certified sources and sourcing 100 percent of our direct palm oil purchases from responsible and certified sustainable sources. Additionally, we continue to make progress toward our 2020 environmental goals and are pleased that eight of our plants (including legacy Smucker and pet facilities) diverted 97 percent or more of their waste from landfill to alternative use.

Read about these accomplishments and more in our 2016 Corporate Responsibility Report, available on our website, jmsmucker.com.

2020 ENVIRONMENTAL GOALS 95 15 10 PERCENT PERCENT PERCENT Divert 95 percent of waste Reduce water usage by Reduce greenhouse gas from landﬁll to alternative use. 15 percent. emissions by 10 percent.

WASTE DIVERTED FROM LANDFILL* WATER INTENSITY* EMISSIONS INTENSITY* (gallons per EU) (tonnes CO2 per 1,000 EU)

2015 88.8% 2015 2.97 2015 1.30

2014 86.2% 2014 3.16 2014 1.25 2013 87.9% 2013 3.19 2013 1.25 2012 85.4% 2012 4.00 2012 1.22 2011 76.5% 2011 4.06 2011 1.19

2010 73.9% 2010 4.24 2010 1.27 2009 79.8% 2009 4.22 2009 1.27

• Equivalent unit (EU) is an internal measure of volume • Equivalent unit (EU) is an internal measure of volume based on tonnage. based on tonnage. • Baseline 2014 intensity based per equivalent unit • Baseline 2014 intensity based per equivalent unit of production. of production.

*All metrics recalculated to reﬂect divestiture of U.S. canned milk facilities in December 2015. Metrics do not yet include facilities from the Big Heart acquisition that occurred on March 23, 2015.

20 THE J.M. SMUCKER COMPANY | 2016 ANNUAL REPORT GLUTEN FREE* PILLSBURY™ CHOCOLATE OATMEAL FUNFETTI® FRUIT PIZZA PEANUT BUTTER BANANA SMOOTHIE ______

* Ensure all recipe ingredients are gluten free by referencing the ingredient labels, as products may vary. If uncertain, contact the ingredient manufacturer.

GRILLED SESAME CHICKEN WITH PENNE PASTA WITH BASIL ORANGE CARROT COUSCOUS AND FETA CHEESE ______

PILLSBURY™ FUNFETTI® BERRY BREAKFAST SMOOTHIE CELEBRATION COOKIE CUPS ______CHOCOLATE OATMEAL GLUTEN FREE* PILLSBURY™ PEANUT BUTTER BANANA SMOOTHIE FUNFETTI® FRUIT PIZZA

INGREDIENTS PREP TIME: 10 min. INGREDIENTS PREP TIME: 20 min. READY TIME: 90 min. 1¼ cups apple juice, chilled YIELD: 2 (8 oz.) servings Crisco® Original No-Stick COOK TIME: 15 min. YIELD: 16 servings ½ cup old-fashioned Cooking Spray rolled oats DIRECTIONS 1 package Pillsbury™ DIRECTIONS ⅓ cup Smucker’s® Natural 1. PLACE apple juice and oats in blender Funfetti® Gluten Free 1. HEAT oven to 375°F. Coat 12-inch pizza Creamy Peanut Butter, container. Allow to soften for 3 minutes. Sugar Cookie Mix pan with no-stick cooking spray. stirred 2. ADD peanut butter, banana, maple syrup, ⅓ cup Crisco® Pure 2. COMBINE cookie mix, oil, water and egg in 1 large banana (6 oz.), cinnamon and ice cubes to apple juice Vegetable Oil medium bowl. Mix with spoon until evenly peeled and sliced mixture. Process for 45 seconds or until 2 tbsp. water moistened. Press evenly onto prepared 2 tbsp. pure maple syrup thick and smooth. 1egg pan, just to the edge, to form a crust. Bake ⅛ tsp. cinnamon 3. SQUEEZE chocolate syrup, making a 1 (8 oz.) package cream 12 to 15 minutes or until light golden ½ cup ice cubes drizzle on inside of glass to decorate. Fill cheese, softened brown. Cool completely on wire rack. ® ® Smucker’s Sundae glass with ½ cup of smoothie, squeeze the ¼ cup Smucker’s Natural 3. BEAT cream cheese and marmalade in ™ Syrup Chocolate equivalent of 2 teaspoons chocolate syrup Orange Marmalade Fruit medium bowl with electric mixer on Flavored Syrup over smoothie. Add another ½ cup of Spread medium speed until smooth. Spread on smoothie to within ½-inch from top of 4-5 cups fresh fruit cooled crust. Arrange fruit on top of pizza glass. Drizzle with additional chocolate combination, such as just before serving. Serve immediately. and cinnamon, if desired. sliced strawberries, sliced kiwi, whole small berries, cubed pineapple, etc. ©/® The J.M. Smucker Company ©/® The J. M. Smucker Company

PENNE PASTA WITH BASIL GRILLED SESAME CHICKEN WITH AND FETA CHEESE ORANGE CARROT COUSCOUS

INGREDIENTS PREP TIME: 10 min. YIELD: 4 servings INGREDIENTS PREP TIME: 20 min. YIELD: 4 servings 1 (8 oz.) package truRoots® COOK TIME: 10 min. 4 boneless, skinless chicken COOK TIME: 10 min. Ancient Grain Organic Penne breast halves DIRECTIONS 3 tbsp. extra virgin olive oil, DIRECTIONS ½ cup sesame vinaigrette, plus additional for drizzling 1. COOK pasta in large pot of salted plus additional for serving 1. PLACE chicken in a medium bowl and coat 1 medium green bell pepper boiling water, just until al dente, 1 cup couscous completely with vinaigrette. Cover and cut into ¼-inch strips about 5 to 7 minutes. Drain. ¼ tsp. salt refrigerate at least 2 hours or overnight. 1 medium yellow bell pepper 2. HEAT olive oil in large skillet over 1 cup R.W. Knudsen Family® 2. PLACE couscous in small bowl. Bring salt and cut into ¼-inch strips medium-high heat. Sauté peppers Organic Orange Carrot orange carrot juice to boil in small saucepan. 1¼ cups grape tomatoes, halved until soft. Reduce heat to medium. Juice Blend 3. POUR hot juice over couscous. Cover with ⅔ cup pitted Kalamata olives, Add drained pasta, tomatoes, olives, 1 tbsp. extra virgin olive oil plastic wrap. Uncover bowl after 5 minutes. ® halved garlic and cheese, stirring frequently, 1 tbsp. Santa Cruz Organic Use a fork to “fluff” and separate the couscous. 1 tbsp. minced garlic until cheese begins to melt. Remove Pure Lemon Juice Add remaining ingredients and mix well. 1 (6 oz.) package crumbled skillet from heat. Stir in basil. Season ½ cup diced red onion Adjust seasoning. feta or goat cheese to taste with salt and pepper. 1 cup peeled, seeded and 4. HEAT grill to medium heat. Remove chicken 2 tbsp. fresh chopped basil diced cucumber 3. DIVIDE pasta evenly onto 4 serving from marinade. Season with salt and pepper. Sea salt and cracked fresh 3 tbsp. fresh basil leaves, plates. Drizzle pasta with additional Discard marinade. Grill chicken about 6 pepper to taste thinly sliced olive oil, and garnish with basil sprigs. minutes per side or until internal Fresh basil sprigs for garnish 2 tbsp. chopped fresh parsley temperature reaches 165°F. Serve over ½ tsp. cardamom couscous with drizzle of sesame vinaigrette. 1 tsp. salt ©/® The J.M. Smucker Company ¼ tsp. pepper ©/® The J.M. Smucker Company

PILLSBURY™ FUNFETTI® BERRY BREAKFAST CELEBRATION COOKIE CUPS SMOOTHIE

INGREDIENTS PREP TIME: 60 min. READY TIME: 75 min. INGREDIENTS PREP TIME: 5 min. Crisco® Original COOK TIME: 15 min. YIELD: 3 dozen ½ cup milk YIELD: 1 serving No-Stick Cooking ½ cup blueberries or Spray DIRECTIONS raspberries DIRECTIONS 1 package Pillsbury™ 1. HEAT oven to 350°F. Coat 36 mini muffin cups ⅓ cup prepared granola PLACE milk, berries, granola, honey, Funfetti® Sugar generously with no-stick cooking spray. Blend 1-2 tbsp. honey peanut powder and ice cubes in Cookie Mix cookie mix, flour, butter and egg in medium 3-4 tbsp. Jif® Peanut Powder blender container. Cover and process 3 tbsp. Pillsbury™ BEST™ bowl with electric mixer on medium speed until 3-4 ice cubes until smooth. All Purpose Flour dough forms. Press 1½ teaspoons dough onto ½ cup butter, softened bottom and sides of each mini muffin cup. 1egg 2. BAKE 10 to 12 minutes or until light golden ™ ¾ cup Pillsbury brown. Let cool 15 minutes. Using tip of ™ ® Confetti Funfetti sharp knife, remove from pans to wire rack to Vanilla Flavored cool completely. Frosting 3. BEAT frosting and cream cheese in medium 1 (8 oz.) package cream bowl with electric mixer on medium speed until cheese, softened smooth. Place in decorator bag fitted with star tip. Fill cookie cups with frosting mixture. Sprinkle with candy bits from frosting just before serving. ©/® The J.M. Smucker Company ©/® The J.M. Smucker Company ),1$1&,$/5(9,(: 7KH-06PXFNHU&RPSDQ\ ),9(<($56800$5<2)6(/(&7('),1$1&,$/'$7$ 7KHIROORZLQJWDEOHSUHVHQWVVHOHFWHGILQDQFLDOGDWDIRUHDFKRIWKHILYH\HDUVLQWKHSHULRGHQGHG$SULO7KHVHOHFWHGILQDQFLDOGDWDVKRXOG EHUHDGLQFRQMXQFWLRQZLWKWKH³5HVXOWVRI2SHUDWLRQV´DQG³)LQDQFLDO&RQGLWLRQ´VHFWLRQVRI³0DQDJHPHQW¶V'LVFXVVLRQDQG$QDO\VLV´DQGWKH FRQVROLGDWHGILQDQFLDOVWDWHPHQWVDQGQRWHVWKHUHWR

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$118$/5(3257 SHAREHOLDER INFORMATION The J. M. Smucker Company

CORPORATE OFFICE INDEPENDENT REGISTERED PUBLIC The J.M. Smucker Company ACCOUNTING FIRM One Strawberry Lane Ernst & Young LLP Orrville, Ohio 44667 Akron, Ohio Telephone: (330) 682-3000 DIVIDENDS STOCK LISTING Our Board of Directors typically declares a cash dividend each Our common shares are listed on the New York Stock Exchange — quarter. Dividends are generally payable on the first business day ticker symbol SJM. of March, June, September, and December. The record date is approxi- mately two weeks before the payment date. Our dividend disbursement CORPORATE WEBSITE agent is Computershare Investor Services, LLC. To learn more about The J.M. Smucker Company, visit jmsmucker.com. SHAREHOLDER SERVICES Our transfer agent and registrar, Computershare Investor ANNUAL MEETING Services, LLC, is responsible for assisting registered The annual meeting will be held at 11:00 a.m. Eastern Time, shareholders with a variety of matters, including: August 17, 2016, in the Fisher Auditorium at the Ohio • Shareholder investment program (CIPSM) Agricultural Research and Development Center, –Direct purchase of our common shares 1680 Madison Avenue, Wooster, Ohio 44691. –Dividend reinvestment –Automatic monthly cash investments CORPORATE NEWS AND REPORTS • Book-entry share ownership Corporate news releases, annual reports, and Securities • Share transfer matters (including name changes, gifting, and Exchange Commission filings, including Forms 10-K, and inheritances) 10-Q, and 8-K, are available free of charge on our website, • Direct deposit of dividend payments jmsmucker.com/investor-relations. They are also available • Nonreceipt of dividend checks without cost to shareholders who submit a written request to: • Lost share certificates The J.M. Smucker Company • Changes of address Attention: Corporate Secretary • Online shareholder account access One Strawberry Lane • Form 1099 income inquiries (including requests for Orrville, Ohio 44667 duplicate copies)

CERTIFICATIONS Shareholders may contact Shareholder Services at the corporate Our Chief Executive Officer has certified to the New York Stock offices regarding other shareholder inquiries. Exchange that he is not aware of any violation by the Company of the New York Stock Exchange’s corporate governance listing TRANSFER AGENT AND REGISTRAR standards. We have also filed with the Securities and Exchange Computershare Commission certain certifications relating to the quality of our public P.O. Box 30170 disclosures. These certifications are filed as exhibits to our Annual College Station, TX 77842 Report on Form 10-K. Telephone: (800) 622-6757 Telephone outside U.S., Canada, and Puerto Rico: FORWARD-LOOKING STATEMENTS (312) 360-5254 This Annual Report includes certain forward-looking statements that are Website: computershare.com/investor based on current expectations and are subject to a number of risks and uncertainties. Please reference “Forward-Looking Statements” in the “Management’s Discussion and Analysis” section.

The J. M. Smucker Company is the owner of all trademarks, except for the following, which are used under license: PillsburyTM, the Barrelhead logo, and the Doughboy character are trademarks of The Pillsbury Company, LLC; Carnation® is a trademark of Société des Produits Nestlé S.A.; Dunkin’ Donuts®, Dunkin’ Dark®, and Bakery Series® are registered trademarks of DD IP Holder, LLC; Sweet’N Low®, NatraTaste®, Sugar In The Raw®, and the other “In The Raw” trademarks are registered trademarks of Cumberland Packing Corp. and its affiliates; and Douwe Egberts® and Pickwick® are registered trademarks of Jacobs Douwe Egberts. Borden® and Elsie are also trademarks used under license. K-Cup® and Keurig® are trademarks of Keurig Green Mountain, Inc., used with permission. Non-GMO Project® Verified is a trademark of the Non-GMO Project, Inc.

Painting on the front cover by James Neil Hollingsworth, Atlanta, GA. Designed by Corporate Reports Inc. | Atlanta, GA | www.corporatereport.com 84 THE J.M. SMUCKER COMPANY

One Strawberry Lane • Orrville, Ohio 44667 • 330.682.3000 jmsmucker.com