Peanut Butter Shortage Hits U.S. Consumers After Jif Recall

Mohit Oberoi, CFA - Author

Jun. 10 2022, Published 8:18 a.m. ET

Consumers across the U.S. have been witnessing a peanut butter shortage. Many social media users even compared the peanut butter shortage to the baby formula shortage, which caught the White House’s attention, spurring the import or millions of cans of formula to ease the U.S. supply issues. Why is there now a peanut butter shortage in the U.S. — and when might things get better?

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Over the last few years, peanut consumption has grown significantly and the per-capita consumption hit a record high in 2020. More than half of peanut consumption comes from peanut butter, which has emerged as a good protein source for vegans as well as diet-conscious people.

Which companies make peanut butter in the U.S.?

Several companies make peanut butter in the U.S. These include J.M. Smucker Co, which makes the popular Jif peanut butter. Most leading retail stores have their own private label peanut butter brands. Hormel also makes two peanut butter brands — Skippy and Justin’s. Post Holdings markets the Peter Pan brand, which was previously owned by Conagra.

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The peanut butter market is concentrated and Jif is the market leader by a fairly big margin. Collectively, private labels have the second-largest market share in the peanut butter market, which is testimony to the Jif brand's dominant market position. But then, the average American’s love for Jif peanut butter is also one reason behind the product’s current shortage, coupled with a recent recall.

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The Jif product recall is leading to a peanut butter shortage.

In May, Jif announced a voluntary product recall for what it called “potential Salmonella contamination.” The company said that the recalled products have lot codes between 1274425 and 2140425 and were distributed across the U.S. Jif has started a claims webpage where people with recalled products can be compensated for their losses.

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Users can make a claim for five products in one single form. After review, Jif will send replacement coupons.

How serious is the Jif peanut butter recall?

The Jif peanut butter recall has international ramifications because some of the recalled products were also shipped abroad. Also, the Jif recall has impacted products made with Jif peanut butter. Companies like Walmart and Fudgemantals had to recall fudge made with Jif peanut butter.

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Retail stores are running out of peanut butter.

Several social media users have shared images of empty peanut butter shelves at grocery stores. Incidentally, even the baby formula shortage was compounded by a product recall from Abbott. The Abbott plant has since reopened and it will soon start shipping the product.

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The peanut butter shortage has reached Amazon as well.

Many peanut butter brands are out of stock on Amazon too. However, the e-commerce platform still has a reasonable inventory of some of the other brands, especially its own brands. If you're struggling to find peanut butter at a nearby store, you might be able to find some brands online on Amazon.

J.M. Smucker hasn’t provided a timeline yet but said during its earnings call for the fiscal fourth quarter of 2022 that it's actively working with the FDA to restart the Lexington facility as soon as possible. The company expects to take a hit of $125 million in its earnings for fiscal 2023 ending March 31, 2023, from the Jif recall. The actual impact might be materially different from the estimate.


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