During difficult times, you tend to go back to something that makes you, that gives you comfort, and peanut butter is the ultimate comfort food in America.

While the price of commodities as a whole have steadily increased over the past 20 years, peanut butter's average price has remained relatively stable, costing about 20 cents a serving in 2023.

And for such an old product, it's constantly being reinvented.

Candies, snacks, and even the classic PB&J.

It's a $2 billion industry.

It's a 90% household penetration per day.

That's very high penetration.

Its unique taste, smell, and texture are unforgettable.

I love peanut butter.

I have since I was a kid, like peanut butter and jellies.

Typical comfort is both PB&J, but I will do peanut butter and honey.

Never peanut butter by itself, though.

My mom would pack my brother and I lunches every single day, and, you know, there are two of us, we're twins, so the easiest thing she could make for us would be PB&J sandwiches, and I probably had a peanut butter and jelly sandwich every day, year-round.

It's personal in a way, reporting on the nostalgia and thinking about my own childhood and all the times I eat it and maybe thinking a little bit about why I might like peanut butter as much as I do.

This is one of America's most popular brands, Skippy's Peanut Butter Factory in Little Rock, Arkansas.

Americans bought almost 800 million pints of peanut butter in 2022 alone, up 2.2% from the year prior.

Something naturally just causing us to never tire of the taste and the flavor of peanut butter.

In fact, 2022 was an all-time record in peanut butter consumption in America.

Total revenue from peanut butter sales surpassed $2 billion in 2022, up 8.7% from 2021.

But the top three brands are Jiff, Skippy, and Peter Pan.

The Jam Smucker Company, which owns Jiff, released its most recent quarterly earnings in June.

The company says, despite a peanut butter recall, net sales of consumer foods, the category the snack falls under, increased by 14%.

Growth from this section, the biggest among the company's three U.S. retail segments, lifted the company's overall net sales in the quarter by 10%, to $2.24 billion.

The largest portion of our growth within consumer foods has definitely been on Uncrustables business.

We're projecting to build Uncrustables to a billion-dollar brand.

It will become the largest brand within our consumer foods portfolio.

Its stock price reached an all-time high of about $163 in January.

Skippy, that's what calls to me.

On the other hand, stock in Hormel Foods, which owns peanut butter brands Skippy and Justin's, has had a slow start in 2023.

Though Hormel Foods' overall net sales declined by 4% in 2023's second quarter, compared to the same quarter a year prior, Skippy, among other brands, grew.

Though peanut butter titans Skippy and Jiff are indomitable, there's a clear piece of the metaphorical peanut butter pie that's cut out for other competitors.

When you lump in the top three brands plus private label, you're capturing 85% plus of the peanut butter category.

That 22% of the category that is private label, that's fairly comparable with other main lines in our store category.

So kind of an average level of market share for those store brands and private label brands.

Experts disagree who exactly founded peanut butter, but most credit farmers in the South who began grinding up their peanut crops into a paste in the 1800s.

People have been growing peanuts for thousands of years.

And the idea that nobody rounded it up into a paste until 1894 is probably beggar's belief.

If you couldn't ship it long distances, you couldn't store it, it would go bad pretty quickly.

So hydrogenation is really the key to peanut butter becoming a mass market phenomenon.

The first major brand to commercially develop peanut butter was actually Peter Pan in 1920.

Peter Pan is the peanut butter eater's peanut butter.

Joseph Rosefield, later Skippy's founder, was working with the company for a while.

He had a patent, which Peter Pan needed.

And at some point he had a falling out with Peter Pan.

So he yanked his patent, he created Skippy.

He started making that in the garage of his home in Alameda.

Skippy was founded in 1933 and Jif in 1958.

Despite it being the last to launch, Jif has held the title of the most popular peanut butter brand in the U.S. since 1980, when it snatched the lead from Skippy.

This, partially due to a successful marketing campaign by Procter & Gamble, who owned Jif at the time.

Isn't that the peanut butter you want for your family?

Right, they get Jif.

Choosy mothers choose Jif.

We have held the position, the number one position now for multiple decades.

That doesn't come by happenstance.

It's definitely by keeping the consumer at the heart of everything that we're doing.

But peanut butter's ubiquitous presence in society was solidified during the Great Depression, when its use as a cheap sandwich filling as an alternative to meat became widespread, and World War II, when it was included as part of soldiers' food rations.

All the American soldiers who had peanut butter in their rations in World War II, who hadn't previously eaten or experienced it, you know, became fond of it and came home and started eating it and sharing it with your families.

Though originally family-owned, Skippy was bought by Best Foods in 1955 and later acquired by Unilever in 2000.

Most recently, Hormel Foods, predominantly known for meat products like Spam, purchased the legendary brand in 2013 for $700 million.

There was a lot of untapped opportunity with this brand.

We have the opportunity to really put a focus on it and really figure out what is it that makes this brand special and what's going to help it to grow into the future.

That paid off.

Now, non-meat proteins make up about 25% of Hormel's total portfolio.

The company acquired Justin's in 2016 and Planter's in 2021.

That was a real pivot for Hormel into kind of a non-meat center-of-store product to help evolve the company into a more consumer, product-facing company.

They hold near 20% of the market share today behind that Skippy brand.

And growth has been consistent with the category since they acquired it.

Skippy follows consumer spending habits to cash in on other peanut butter endeavors.

That $2 billion industry I mentioned earlier?

Yeah, that's just spreadable peanut butter.

Consumers are looking for new ways to get peanut butter, not just out of the jar, but in other products as well.

So think about baked goods and snacks, ice cream, cereal, all the different places that people enjoy peanut butter today.

So there's opportunities for us as a brand to tap into some of those spaces as well and expand and find new areas of growth for this brand.

But Skippy, or Hormel, has major competition.

Smucker's owns and operates the Uncrustables brand, frozen, pre-made PB&J-style sandwiches that have helped the company grow exponentially since that brand was acquired in 1998.

You have this product expansion into Uncrustables frozen sandwiches that's just been on fire for them and growing very strongly.

In fact, the growth in Uncrustables has added over one point of incremental growth to the company overall in recent years.

Uncrustables has been 20 years in the making, so we love now to look forward and see this incredible growth trajectory to a billion-dollar brand.

But at the very beginning, there was a lot that needed to be done to invest in the R&D behind the making of that sandwich.

Uncrustables are manufactured in facilities in Colorado and Kentucky.

A third location is being added in Alabama.

Oh, that's pretty yummy.

Though there was a period of time that non-peanut butter nut butters were gaining share and driving a lot of growth in the category, experts say that has dissipated recently.

One of the things that both JIP and Skippy and mainline brands have done is develop natural versions of their own under the mainline brand, not that the consumer is going to switch from a natural organic brand to JIF, but perhaps keep some consumers within the JIF family.

In many parts of the world, peanut butter is regarded as an unpalatable American curiosity.

Though most people can plate peanut butter with America, its popularity is growing elsewhere, like in Mexico and China, or in Canada, where per capita consumption is slowly approaching that of the U.S.

In 2022, the U.S. exported about 30 million pounds of peanut butter to Canada.

To put that into perspective, that's also about 30 million 16-ounce jars of peanut butter.

The world's largest peanut producer by far, China, has already bought into the craze, but uses the nut mainly for sauces and oils.

Advocates are working to shift that interest towards peanut butter.

If we could just get them to consume one pound per capita of peanut butter, they would far surpass what we consume.

But it's an acquired taste for people who don't grow up eating it.

During its Q2 earnings, Hormel Foods reported their international earnings were partially offset by lower sales in China, though the company says there is still huge growth potential there.

We definitely have a strong presence in China, in Malaysia, Singapore, Philippines.

We have pretty aggressive growth plans in overseas markets for this brand.

But despite a bullish outlook, the industry is facing some risks.

In 2022, the salmonella contamination forced Smuckers to recall Jif products for months.

One of our competitors had to exit the marketplace temporarily, and that meant that there was an increased demand for our products.

And so as a result of that, we had to ship everything we could to try to satisfy the market.

Once we were back on shelf, consumers' passion for this brand and their trust in Jif was tremendous.

So we were already back at a number one position.

Another risk to the industry is allergies.

Around one million children in the U.S. are allergic to peanuts, and only one out of five will outgrow it.

Peanut allergies are unpredictable.

Severe reactions can occur from even the smallest trace of peanuts.

Many schools, from elementary to college campuses, have created nut-free spaces or completely banned the snack.

The categories continue to grow even as the prevalence of allergy or the reporting of the prevalence of allergy has picked up.

While it's a threat, it's certainly not impacting sales.

With that 90% household penetration rate, brand recognition and nostalgia, peanut butter is clearly not going anywhere.

They're not lying.

That's really crunchy.

Yeah, this is great.

Its affordability and convenience have kept it stocked in Americans' pantries, even when inflation hits high.

If my mom had $5 and we were hungry, then we would go and get us a peanut butter and jelly and bread, and we would be, like, good for the week.

And so it's turned from a struggle meal to more of, like, a just, like, comfort, you know, guilty pleasure type of meal.

Thanks to advances in technology, peanuts continue to be easy and cheap to farm.

Yields are 20% higher than they were 10 years ago, and demand continues to increase.

The price of a pound of peanut butter is $2.57 today.

That's about 27% lower than it was in 1995, when the average price adjusted for inflation was about $3.54, almost a full dollar a pound less.

There aren't many food products out there with that trajectory, so with prices going down, consumers can remain focused on the choice that matters.

Creamy or crunchy?

Overall, we do sell more creamy peanut butter than crunchy, but don't tell that to the crunchy fans.

They absolutely love it, and they would never give it up.

I was a creamy kid, but now I'm much more of a crunchy guy.

I want actual peanuts in my peanut butter.

Do you eat peanut butter crunchy or just peanut butter creamy?

Just creamy, honestly.

It's just...

It just feels better in the mouth, you know?

This is the perfect sandwich.

I don't think I could ever get sick of this.

I could eat this, I could eat three PB and J's going through the day, I think.

I have before.

I have before.