Management’s Discussion and Analysis

EXECUTIVE SUMMARY STRATEGIC ELEMENTS For more than 100 years, The J. M. Smucker Company (“Company”), The Company remains rooted in its Basic Beliefs of Quality, People, headquartered in Orrville, Ohio, has been committed to offering Ethics, Growth, and Independence, established by its founder and consumers trusted, quality products that help families create namesake more than a century ago. Today, these basic beliefs memorable mealtime moments. Today, the Company is a lead- still serve as a foundation for the Company’s decision making and ing marketer and manufacturer of fruit spreads, retail packaged actions. , , shortening and oils, sweetened condensed The Company’s strategic vision is to own and market food brands milk, ice cream toppings, and health and natural foods beverages which hold the number one market position in their category, in North America. with an emphasis on North America while embracing a global Its family of brands includes Smucker’s, , , Crisco, Pillsbury, perspective. In support of this vision, the Company in recent years , R.W. Knudsen Family, Hungry Jack, and has expanded its portfolio of number one and leading, iconic in the United States, along with Robin Hood, Five Roses, Carnation, brands through acquisitions, most recently Folgers coffee in Europe’s Best, and Bick’s in Canada. In addition to these brands, November 2008. the Company markets products under numerous other brands, The Company’s strategic long-term growth objectives are to including Dunkin’ Donuts, Millstone, Dickinson’s, ’s, increase net sales by six percent and earnings per share by greater Adams, Double Fruit (Canada), and Santa Cruz Organic. than eight percent annually. While year-to-year the net sales The Company has four reportable segments: U.S. Retail Coffee contribution from acquisitions will vary, the Company expects Market, U.S. Retail Consumer Market, U.S. Retail Oils and Baking organic growth, including new products, to add three to four per- Market, and Special Markets. The Company’s three U.S. retail cent per year and acquisitions to contribute the remainder. market segments in total comprised over 80 percent of the Company’s net sales in fiscal 2010 and represent a major portion of the strategic focus area for the Company – the sale of branded RESULTS OF OPERATIONS food products with leadership positions to consumers through On November 6, 2008, the Company completed a merger transac- retail outlets in North America. The Special Markets segment tion with The Folgers Coffee Company (“Folgers”), previously a represents sales outside of the U.S. retail market segments and subsidiary of The Procter & Gamble Company. The transaction was includes the Company’s Canada, foodservice, natural foods, and accounted for as a purchase business combination and Folgers is international business areas. included in the Company’s consolidated financial statements from In each of the U.S. retail market segments, the Company’s prod- the date of the merger. Because the transaction closed during the ucts are sold primarily to food retailers, food wholesalers, drug first week of the fiscal 2009 third quarter, incremental Folgers stores, club stores, mass merchandisers, discount and dollar stores, business, approximating six months of operations, is included in and military commissaries. In the Special Markets segment, the fiscal 2010 (“incremental Folgers business”). Company’s products are distributed domestically and in foreign countries through retail channels, foodservice distributors and operators (e.g., restaurants, schools and universities, health care operations), and health and natural foods stores and distributors.

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