Smucker's sold $365 million of Uncrustables last year. Here's the inside story of how the frozen peanut butter and jelly sandwich became America's favorite lunch.
In 1998, jam and jelly maker The J.M. Smucker Company acquired a two-person company in North Dakota that was making sealed, crustless, peanut butter and jelly sandwiches for $1 million Smucker's used the company's patent to create its own version of the product, called Uncrustables. Over the years, Uncrustables became a huge success generating sales of $365 million in the last fiscal year, despite not making a single TV ad or major marketing campaign for the product. CEO Mark Smucker attributes much of the product's success to the stronghold the peanut butter and jelly sandwich has in American culture. Visit Business Insider's homepage for more stories.
In 1998, established jelly brand Smucker's took interest in a bizarre little company started by two entrepreneurs in Fargo, North Dakota. Len Kretchman and David Geske, both fathers to school-aged children, had developed a sealed, crustless peanut butter and jelly sandwich. To create them, they'd make peanut butter and jelly sandwiches on soft, white bread, and punch them out with a hand crimper. The result is something akin to a PB&J ravioli. Kretchman and Geske would freeze the "raviolis" and then sell them to local school districts in North Dakota. School cafeterias could then easily unthaw the sandwiches each morning and the handheld sandwiches would be ready for consumption by lunchtime. They also happened to be a hit with kids. Smucker's caught wind of the outfit and, as a jelly company, saw the benefit of acquiring the patent for such convenient sandwiches. Kretcnman and Geske sold their company, called MenUSAver, for $1 million and gave over the patent for their sealed sandwiches to Smucker's. Today, Smucker's has built an empire out of these pillows of PB&J, called Uncrustables, which generated sales of more than $365 million last fiscal year. The company's goal is to reach $500 million in sales by the 2023 fiscal year. The company has never run TV advertisements or major marketing campaigns for the product, yet Uncrustables have developed all sorts of fans, from first responders to NBA players. So, how did a frozen sandwich become such a smashing success? Mark Smucker, the current CEO and fifth generation of the family to head up the company says it's all about the magic combination of salty peanut butter and sweet jelly. "The PB&J is so uniquely American," Smucker told Business Insider in an interview. "It's so deeply ingrained in our culture that it's almost a universal truth." Both Smuckers and the PB&J got their starts around the turn of the century. The first known recipe for the sandwich appeared in a cooking journal in 1901. Just a few years earlier in 1897, Jerome Monroe Smucker founded the mom and pop jam shop called J.M. Smucker Company. So for more than a century, Smucker's jams have had a built-in market thanks to America's favorite sandwich. One could say that Smucker's and peanut butter and jelly sandwiches go together like...peanut butter and jelly. Smucker doesn't see the popularity of the PB&J waning anytime soon, either. "It's been passed on from generation to generation," he said of the stronghold the sandwich has as an American comfort food. "We don't think that is going to change anytime in the next couple generations." The numbers prove him right. The demand for Uncrustables is so high that Smucker's opened a new facility in Boulder, Colorado, completely dedicated to making Uncrustables last year. Though Smucker's began testing new savory Uncrustables this year with varieties like ham and cheese and turkey and cheese, the two factories both exclusively produce PB&J sandwiches and are still struggling to keep up with demand, despite making 2 million sandwiches per day. Uncrustables sales were up 26% for its 2020 fiscal year and accelerated to a 50% increase in Q4, which ended April 30 — meaning demand increased when the pandemic hit and most kids were at home, upending Uncrustables' primary designation as a school day lunchbox snack. This trend has confirmed to the team at Smucker's that kids' lunchboxes are just the gateway into a household's eating habits. "We have only touched the surface on this one," Tina Floyd, senior vice president and general manager of consumer foods for J.M. Smucker, said. The quality of the product helps Uncrustables grow into new markets, Floyd said. Floyd explained that the company spent a lot of time developing the Uncrustable so that the frozen product could be mass-produced without the quality suffering. "Retailers thought we were crazy. It took a lot of time to make sure product quality was sustainable," she said. The result is that parents buy Uncrustables because they're a low-mess, handheld, individually-packaged option, but they are often shocked by how great they actually taste. "What we over deliver on every time is the sandwich, Floyd said. "That bread is even fresher than when you get a loaf of bread off the grocery store shelf." Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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