Item 1. Business.

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The Company. The J. M. Smucker Company (“Company,” “registrant,” “we,” “us,” or “our”) was established in 1897, was incorporated in Ohio in 1921, and is often referred to as Smucker’s (a registered trademark). We operate principally in one industry, the manufacturing and marketing of branded food products on a worldwide basis, although the majority of our sales are in the U.S. Our operations outside the U.S. are principally in Canada, although products are exported to other countries as well. Net sales outside the U.S., subject to foreign currency exchange, represented 8 percent of consolidated net sales for 2015. Our branded food products include a strong portfolio of trusted, iconic, market-leading brands that are sold to consumers through retail outlets in North America.

On March 23, 2015, we completed the acquisition of Big Heart Pet Brands (“Big Heart”), a leading producer, distributor, and marketer of premium-quality, branded pet food and pet snacks in the U.S. The cash and stock transaction was valued at $5.9 billion, which included the assumption of $2.6 billion in debt that we refinanced at closing. We issued 17.9 million shares of our common stock to the shareholders of Blue Acquisition Group, Inc., Big Heart’s parent company, and paid $1.2 billion in cash, subject to a working capital adjustment. After the closing of the transaction on March 23, 2015, we had approximately 120.0 million common shares outstanding. We funded the non-equity portion of the acquisition through the combination of a $1.8 billion bank term loan and $3.7 billion in long-term notes.

We have four reportable segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International, Foodservice, and Natural Foods. The U.S. retail market segments in total comprised over 75 percent of 2015 consolidated net sales and represent a major portion of our strategic focus – the sale of branded food products with leadership positions to consumers through retail outlets in North America. The International, Foodservice, and Natural Foods segment represents sales outside of the U.S. retail market segments.

Principal Products. Our principal consumer food and beverage products are coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, canned milk, flour and baking ingredients, juices and beverages, frozen sandwiches, toppings, syrups, pickles, condiments, grain products, and nut mix products. Our pet products consist of dry and wet dog food, dry and wet cat food, dog snacks, and cat snacks.

Product sales information for the years 2015, 2014, and 2013 is incorporated herein by reference to information set forth in our 2015 Annual Report to Shareholders on page 60 under “Note 3: Reportable Segments.”

In the U.S. retail market segments, our products are primarily sold through a combination of direct sales and brokers to food retailers, food wholesalers, drug stores, club stores, mass merchandisers, discount and dollar stores, military commissaries, and pet specialty stores. In the International, Foodservice, and Natural Foods segment, our products are distributed domestically and in foreign countries through retail channels, foodservice distributors and operators (e.g., restaurants, lodging, schools and universities, health care operators), and natural foods stores and distributors.

Sources and Availability of Raw Materials. The raw materials used in each of our segments are primarily commodities and agricultural-based products. Green coffee, peanuts, edible oils, wheat, sweeteners, corn, milk, fruit, vegetables, cocoa, poultry meal, soybean meal, meat, meat by-products, and other ingredients are obtained from various suppliers. The availability, quality, and costs of many of these commodities have fluctuated, and may continue to fluctuate, over time. Basis, futures, and options contracts are used to manage price volatility for a significant portion of our commodity costs. Green coffee, along with certain other raw materials, is sourced solely from foreign countries and its supply and price is subject to high volatility due to factors such as weather, global supply and demand, pest damage, investor speculation, and political and economic conditions in the source countries. We source peanuts, edible oils, and wheat mainly from North America. The principal packaging materials we use are plastic,

glass, metal cans, caps, carton board, and corrugate. For additional information on the commodities we purchase, see “Commodities Overview” on pages 31 and 32 in our 2015 Annual Report to Shareholders.

Raw materials are generally available from numerous sources, although we have elected to source certain plastic packaging materials from single sources of supply pursuant to long-term contracts. While availability may vary year-to-year, we believe that we will continue to be able to obtain adequate supplies and that alternatives to single-sourced materials are available. We have not historically encountered significant shortages of key raw materials. We consider our relationships with key raw material suppliers to be good.

Trademarks and Patents. Our products are produced under certain patents and marketed under numerous trademarks owned or licensed by us or one of our subsidiaries. Our major trademarks are listed below.

Dunkin’ Donuts is a registered trademark of DD IP Holder LLC used under license (the “Dunkin’ License”) for packaged coffee products, including K-Cup® pods, sold in retail channels such as grocery stores, mass merchandisers, club stores, and drug stores. The Dunkin’ License does not pertain to Dunkin’ Donuts coffee or other products for sale in Dunkin’ Donuts restaurants. The terms of the Dunkin’ License include the payment of royalties to an affiliate of DD IP Holder LLC and other financial commitments by the Company. The Dunkin’ License is in effect until January 1, 2039.

Pillsbury, the Barrelhead logo, and the Doughboy character are trademarks of The Pillsbury Company, LLC and are used under a 20-year, perpetually renewable, royalty-free license. Borden® and the Elsie design are trademarks used on certain products under a perpetual, exclusive, and royalty-free license. Carnation® is a trademark of Société des Produits Nestlé S.A. used by our Canadian subsidiary for certain canned milk products in certain territories under an exclusive and royalty-free license with an initial term of 10 years which expires in October 2017, renewable for two successive 5-year terms, and which becomes perpetual at the end of the renewal terms under certain circumstances. Douwe Egberts and Pickwick® are registered trademarks of D.E Master Blenders 1753 N.V. and are used under a multi-year license which expires in January 2019. In accordance with a multi-year licensing and distribution agreement entered into with Cumberland Packing Corp. (“Cumberland”), we market and distribute Cumberland’s branded tabletop sweeteners sold under the Sweet‘N Low®, NatraTaste®, Sugar In The Raw®, and other “In The Raw” brands to foodservice customers in the U.S. and to retail and foodservice customers in Canada. Keurig® and K-Cup® are trademarks of Keurig Green Mountain, Inc. (“Keurig”), used with permission. In addition, we and our subsidiaries license the use of several other trademarks, none of which are individually material to our business.

Slogans or designs considered to be important trademarks include, without limitation, “With A Name Like Smucker’s, It Has To Be Good®,” “The Best Part of Wakin’ Up Is Folgers In Your Cup®,” “Mountain Grown design,” “Choosy Moms Choose Jif®,” “Purely The Finest®,” “Crisco is Cooking™,” “Everybody’s Happy When It’s Hungry Jack®,” “Goodness Gracious, It’s Good!®,” “The Only One Cats Ask For By Name®,” “Say It With Milk-Bone™,” the Smucker’s banner, the Crock Jar shape, the Gingham design, and the Strawberry, Milk-Bone, and 9Lives logos.

We own several hundred patents worldwide in addition to proprietary trade secrets, technology, know-how processes, and other intellectual property rights that are not registered.

We consider all of our owned and licensed intellectual property, taken as a whole, to be essential to our business.

Seasonality. The U.S. Retail Coffee and U.S. Retail Consumer Foods segments are particularly seasonal around the Fall Bake and Holiday period, which generally results in higher sales and profits in our second and third quarters. Our success in promoting and merchandising our coffee and baking brands during the Fall Bake and Holiday period has a significant impact on our results for a fiscal year. The Back to School period and the Spring Holiday season are two other important promotional periods, although their impact is not as significant as the Fall Bake and Holiday period.

Working Capital. Working capital requirements are greatest during the first half of our fiscal year mainly due to the timing of the buildup of coffee, oil, baking, and milk inventories necessary to support the Fall Bake and Holiday period and the additional buildup of coffee inventory in advance of the Atlantic hurricane season.

Customers. Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to 28 percent, 27 percent, and 26 percent of net sales in 2015, 2014, and 2013, respectively. These sales are primarily included in the U.S. retail market segments. No other customer exceeded 10 percent of net sales during 2015, 2014, or 2013. Within the Big Heart business, sales to Wal-Mart Stores, Inc. and subsidiaries represent a larger portion of net sales, as compared to our business prior to the acquisition. As a result, beginning in 2016, we anticipate that sales to Wal-Mart Stores, Inc. and subsidiaries will represent a larger portion of net sales than in 2015 due to a full year of Big Heart sales.

During 2015, our top 10 customers, collectively, accounted for approximately 60 percent of consolidated net sales. Supermarkets, warehouse clubs, and food distributors continue to consolidate, and we expect that a significant portion of our revenues will continue to be derived from a limited number of customers. Although the loss of any large customer for an extended length of time could negatively impact our sales and profits, we do not anticipate that this will occur to a significant extent due to strong consumer demand for our brands.

Orders. Generally, orders are filled within a few days of receipt, and the backlog of unfilled orders at any particular time has not been material on a historical basis.

Government Business. No material portion of our business is subject to renegotiation of profits or termination of contracts at the election of the government.

Competition. Within consumer foods and beverages, we are the branded market leader in the coffee, peanut butter, fruit spreads, shortening, sweetened condensed milk, ice cream toppings, and natural beverage categories in the U.S. Within pet food and pet snacks, we are the branded market leader in the dog snacks category in the U.S. In Canada, we are the branded market leader in the flour, pickles, canned milk, fruit spreads, shortening, and ice cream toppings categories. Our business is highly competitive as all of our brands compete for retail shelf space with other branded products as well as private label products.

In order to remain competitive, companies in the food industry need to consider emerging consumer preferences, technological advances, product and packaging innovations, and the continued growth of alternative store formats, including warehouse clubs, convenience stores, and e-commerce. The primary ways in which products and brands are distinguished are brand recognition, product quality, price, packaging, new product introductions, nutritional value, convenience, advertising, promotion, and the ability to identify and satisfy consumer preferences. Positive factors pertaining to our competitive position include well-recognized brands, high-quality products, consumer trust, experienced brand and category management, a single national grocery broker in the U.S., varied product offerings, product innovation, good customer service, and an integrated distribution network.

The packaged foods industry has been challenged recently by a general decline in sales volume in the center of the store. Certain evolving consumer trends have contributed to the decline, such as a

heightened focus on health and wellness, an increased desire for fresh foods, and the growing impact of social media and e-commerce on consumer behavior. To address these dynamics, we continue to focus on innovation with an increased emphasis on products that satisfy evolving consumer trends.

In addition, private label has grown in recent years due to general economic uncertainty, improvements in private label quality, and the increased emphasis of store brands by retailers in an effort to cultivate customer loyalty. In the pet food and pet snacks categories, private label penetration has declined below levels seen in consumer food and beverage categories. We believe that both private label and leading brands play an important role in the food categories in which we compete, appealing to different consumer segments. We closely monitor the price gap or price premium between our brands and private label brands, with the view that value is about more than price and the expectation that #1 brands will continue to be an integral part of consumers’ shopping baskets.

In the U.S. Retail Coffee segment, the Folgers brand competes in the highly competitive U.S. packaged roast and ground coffee market with other retail coffee brands such as Maxwell House, Yuban, and Chock full o’Nuts. We participate in the premium coffee market through sales of Dunkin’ Donuts retail packaged coffee products, as well as with the Folgers Gourmet Selections® and Millstone® brands. Competitors include other brands such as Starbucks, Gevalia, Eight O’Clock, Seattle’s Best, Peet’s Coffee & Tea, and McCafe. Through a manufacturing and distribution agreement with Keurig, we compete in the single serve coffee market with the Folgers, Folgers Gourmet Selections, Millstone, and Café Bustelo® premium coffees K-Cup® pods. Additionally, under a new, multi-year agreement, at the beginning of fiscal 2016 we began selling Dunkin’ Donuts K-Cup® pods to grocery chains, mass merchandisers, club stores, drug stores, dollar stores, home improvement stores, and online retailers. K-Cup competing brands include Green Mountain, Starbucks, Eight O’Clock, Maxwell House, and Gevalia, as well as many private label brands. We participate in the espresso coffee category with the Café Bustelo and Café Pilon® brands.

In the U.S. Retail Consumer Foods segment, the Jif brand has been the leader in the peanut butter category for over 20 years, competing primarily with Skippy, Peter Pan, and many private label brands. Our natural peanut butter business, sold under the Jif, Smucker’s, Adam’s®, and Laura Scudder’s® brands, maintains a strong leadership position in the natural peanut butter category. Our fruit spreads brands, primarily Smucker’s, hold the leading position in the fruit spreads category and compete with Welch’s branded line of fruit spreads and many private label brands. The competing brands exist on both a national and a regional level. Besides the brands with which we compete in the peanut butter and fruit spreads categories, our overall spreads business has been impacted by the recent growth of the hazelnut spreads category, primarily the Nutella brand. Crisco has historically been a leader in the shortening and cooking oils categories. Crisco holds the leading branded position in the shortening category and competes with other branded competitors, including Wesson, for the leading branded position in the oils category. The oils category in which Crisco competes is highly competitive with private label competitors, collectively, maintaining the largest share of the category. The Pillsbury brand competes in the dessert baking mixes (“DBM”) category that includes mixes for cakes, cookies, brownies, muffins, and quick breads, as well as ready-to-spread frostings. Within the DBM category, we compete primarily with the market leader, Betty Crocker, as well as Duncan Hines and many private label and regional brands. In the ingredients category, Pillsbury flour competes with the branded market leader, Gold Medal, as well as many private label brands which, collectively, maintain the largest share of the category. Smucker’s Uncrustables is the market leader in the frozen peanut butter sandwiches segment. The Hungry Jack® brand competes in the pancake mix and table syrup categories. We compete with several major national as well as private label brands in this category. We compete in the canned milk category with both branded and nonbranded products. We are the branded market leader in the sweetened condensed milk category with the Eagle Brand® and Magnolia® brands and have significant sales with production of private label brands. In the evaporated milk category, we have a significant presence with our production of private label brands.

In the U.S. Retail Pet Foods segment, our pet products portfolio includes well-recognized national brands such as Meow Mix, Milk-Bone, Kibbles ’n Bits, Natural Balance, 9Lives, and Pup-Peroni, as well as other brand names and private label products. We hold the #1 market share in the dog snacks

category (excluding rawhide), the #2 market share in both the dry and wet cat food categories, and the #3 market share in the dry dog food category. We compete with other branded pet food and pet snacks products. In the dry and wet dog food categories, our main competitors are Dog Chow, Beneful, Beyond, Pedigree, Nutro, Iams, Hill’s, and Blue. We compete in the dry and wet cat food categories with Friskies, Fancy Feast, Cat Chow, Sheba, Whiskas, Iams, Hill’s, and Blue. Our main competitors in the dog and cat snacks categories are Beggin’ Strips, Waggin’ Train, Dentastix, and Greenies. In addition, we face competition from smaller branded and private label pet food and pet snacks products.

In the International, Foodservice, and Natural Foods segment, our products are distributed domestically and in foreign countries and compete with various brands within retail, foodservice, and natural foods markets. In our foodservice hot beverage business, Folgers and Douwe Egberts compete in the liquid and roast and ground coffee categories. In the liquid category, Nescafe is a key competitor, along with a variety of branded and private label competitors. In the roast and ground category, private label has a significant presence, and several national and regional brands are also competitors. In our foodservice portion control business, Smucker’s competes in the fruit spreads category with Heinz and many private label brands. In Canada, Robin Hood® and Five Roses® are the market leaders in the flour category, competing primarily with private label brands. In the Canadian retail coffee market, Folgers competes with the market leader, Maxwell House, as well as several other branded competitors and some private label brands. In our natural foods business, R. W. Knudsen Family® is the branded market leader in the natural shelf stable juice category, competing primarily with Lakewood and many private label brands. Santa Cruz Organic® competes in several natural food and beverage categories with national and regional brands, as well as private label. Within the grains products category, truRoots® is a leading organic quinoa brand, competing primarily with Ancient Harvest. We also compete in the 75 countries to which we export our products. The majority of our export sales are to the Latin America markets.

Research and Development. We predominantly utilize in-house resources to both develop new products and improve existing products in each of our business areas. Amounts expensed for research and development were $32.5 million, $24.3 million, and $24.7 million in 2015, 2014, and 2013, respectively.

Environmental Matters. We consider environmental sustainability to be our responsibility as a good corporate citizen and a key strategic focus area. We have implemented and manage a variety of programs, including the utilization of renewable energy technology, improved wastewater management, increased usage of sustainable raw materials including green coffee, and reuse of resources rather than consuming new ones, in support of our commitment to environmental sustainability. We continue to evaluate and modify our processes on an ongoing basis to further reduce our impact on the environment and reduce waste.

Compliance with the provisions of enacted or pending federal, state, and local environmental regulations regarding either the discharge of materials into the environment or the protection of the environment is not expected to have a material effect upon our capital expenditures, earnings, or competitive position in 2016.

Employees. At April 30, 2015, we had 7,370 full-time employees worldwide, of which 28 percent, located at 10 manufacturing facilities, are covered by union contracts. These contracts vary in term depending on the location, with three contracts expiring in 2016, representing 11 percent of our total employees. We believe our relations with our employees are good.

Financial Information about Industry Segments and Geographical Areas. The financial information required to be included in this item concerning reportable industry segments and international operations for the years 2015, 2014, and 2013 is incorporated herein by reference to information set forth in our 2015 Annual Report to Shareholders, on pages 58 through 61, under “Note 3: Reportable Segments.” Our international operations are primarily in Canada with risks similar to those associated with the U.S. retail markets. Approximately 40 percent of our 2015 Canada sales represented the sale of Canadian produced products to Canadian customers. The majority of the remaining Canada sales represented the

sale of products produced in the U.S. to Canadian customers, primarily Folgers coffee, Bick’s® pickles, Crisco shortening and oils, and Smucker’s fruit spreads.

Forward-Looking Statements. This Report includes forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from expected or projected results. The descriptions of risks and uncertainties relating to forward-looking statements are incorporated herein by reference to information set forth in our 2015 Annual Report to Shareholders under the caption “Forward-Looking Statements” on page 42.

Available Information. Access to all of our Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is provided, free of charge, on our website (jmsmucker.com/investor-relations) as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.