The J.M. Smucker Company is in a jam.
Shares of the jelly giant sank to $116 on Wednesday, a low not seen since January 2016 when they were trading around $117. The move reflects broader struggles in the packaged food industry.
Like so many other companies, Smucker is battling pricing pressure in the grocery industry. Its portfolio includes its namesake jelly brand, as well as coffee and food brands including Folgers and Pillsbury, along with pet food brands such as Milk Bone and Meow Mix.
Some shoppers are looking for low prices at discount stores like Aldi and Lidl, said Robert Moskow, an analyst at Credit Suisse, while other shoppers are looking for natural products at more expensive stores like Whole Foods Market. Brands like Smucker are caught in the middle.
"But meanwhile, companies like Smucker and others have, instead of lowering prices to grocers, have actually tried to increase price realization to get margins higher," Moskow said. "Investors are losing faith in the ability of these companies to revitalize their top line."
Smucker beat earnings estimates last quarter, but the numbers were bolstered by layoffs and facility closures. Sales dipped 1.3 percent, marking the fourth consecutive quarter of declines.
Last week, the company nominated Clorox's Chief Operating Officer and Google's president of brand solutions to its board of directors. Still, Moskow said Smucker needs to reinvest in its business through aggressive advertising or product innovation.
"I look at this business as one of those glaciers that just kind of melts a little bit every year," Moskow said. "You don't see it happening, but when you look at it every three or five years, it gets a little smaller."
J.P. Morgan still expects Smucker to outperform some of its packaged goods peers, recommending the shares as overweight in a note to investors last week. It lowered organic sales growth expectations to -0.4 percent from 0.3 percent for 12 packaged food companies, including Campbell Soup Co., General Mills, Kraft Heinz and Hershey Co.