What kind of companies can you count on to generate value, even when the rest of the market is in a slump?

If history is any guide, then one class of stocks consistently enjoys solid demand from consumers. In fact, this sector is considered by many to be full of great “rainy day stocks.”

The sector in question: consumer non-discretionaries, otherwise known as consumer staples.

Here’s just one example of their resilience. Between January 1, 2007 and January 1, 2010, the S&P 500 plummeted, returning negative 21% over that period. In contrast, one of these stocks — which I’ll describe shortly — went up 51%.

In other words, if you owned it during the recession, then this stock would have earned you money. Not many companies can make that claim.

Because of the products they sell — basic foodstuffs and household essentials like toothpaste and soap — these companies resist the cyclical swings of the market at large.

Unlike their luxury counterparts, people can’t give up buying their products, even when the economy goes downhill.

Cars and travel are the perfect counterexamples: people spend more on them during bull markets, but cut back when income gets tight.

So in the case of today’s stock, while you may not realize it, your pantry is probably stocked full of this company’s products. One of its most famous might be an integral part of your morning routine. If you’re a parent, then you might send your kids to school each day packing two or more of this company’s products for lunch.

As of March 2015, you might even be feeding your dog and cat with this company’s products.

The stalwart I’m talking about is none other than The J.M. Smucker Co. (NYSE: SJM). You’ll know it, of course, by its namesake brand of jellies and fruit spreads. But what you might not realize is the true range of its product lineup.

In North America, SJM holds some of the largest market share for staples such as coffee, peanut butter, jelly, vegetable oil, baking goods and ice-cream toppings. And SJM’s brands have become nearly synonymous with the products themselves. Think Folgers, Jif, Crisco, Pillsbury and Smucker’s.

Since 1963, the company has acquired a total of 34 brands. And management at J.M. Smucker has a proven track record of successfully marketing and turning these brands into leaders in their markets. You may recognize Dunkin’ Donuts, R.W. Knudsen, Hungry Jack and Kibbles ‘n Bits, to name just a few.

Morningstar analysts acknowledge that J.M. Smucker’s “solid brand recognition and… loyal customer base” allow the company to “maintain a healthy pricing premium over lesser-known, commodified competitors.”

But you can also see this by surveying the company’s high market shares across the range of its niche markets. Take a look.

Folgers, the largest of SJM’s coffee brands, dominates the mainstream roast and ground market with more than 50% market share — nearly double that of its nearest competitor, Kraft’s Maxwell House.

Jif controls 46% of the growing U.S. peanut butter market.

The company also holds 45% and 64% of the market in fruit spreads and ice-cream toppings, respectively, with its Smucker’s brand.

Crisco stands at 67% of the market for vegetable shortening.

Firm’s with leading market shares also tend to have stellar profit margins. You can see how well SJM demonstrates this below:

Company	Net Profit Margin	Market Cap. (billions)
J.M. Smucker (NYSE: SJM)	11.17%	11.9
General Mills Inc. (NYSE: GIS)	7.89%	33.4
Mondelez International Inc. (NASDAQ: MDLZ)	6.38%	60.2
Kellogg’s (NYSE: K)	-8.34%	22.7
ConAgra Foods (NYSE: CAG)	-24.6%	15.9

And these margins trickle down to shareholders. The company has raised dividends every year since 2002, for a total increase of 300% in 13 years. Even in the midst of 2008, when SJM acquired Folgers, the company not only continued to increase its payout, but paid a special $5 dividend to all shareholders.

Challenges Ahead

However, the company’s largest segment is facing serious headwinds.

Of SJM’s $5.6 billion total revenue in fiscal 2014, coffee accounted for $2.6 billion, or roughly 46% of sales. For context, peanut butter sales generated $729 million and baking mixes, fruit spreads and shortening each brought in $336.6 million .

Smucker acquired Folgers from Proctor & Gamble in an all-stock deal worth $3.7 billion in late 2008. Within a year, the company was bringing in more than 40% of its revenue from coffee sales and had reaped its highest quarterly profits ever.

Now, as a result of higher coffee prices in the last few years, J.M. Smucker’s main revenue stream has slowed. Total sales have remained stagnant, even dropping in fiscal 2014 to $5.6 billion, from $5.9 billion the year before.

Diversifying Revenue

To overcome these losses, SJM is building ties with two companies whose ventures in the coffee business have taken off in recent years.

In February, Dunkin’ Brands, Keurig Green Mountain and J.M. Smucker announced a multi-year partnership to expand distribution of the Keurig’s signature K-Cups. Already licensed to distribute Dunkin’s coffee in supermarkets, SJM will begin marketing the company’s K-Cups directly to consumers through retail and grocery outlets.

Dunkin’ Brands’ K-Cups sales should reach $300 million by 2017, up from zero this year, according to analysis by Credit Suisse.

Even more encouraging, however, is Smucker’s recent acquisition of premium pet food distributer Big Heart Pet Brands.

With management’s historically impressive marketing acumen now being applied to this new channel, we can look forward to SJM helping Big Heart increase market share in the pet food and snacks niche as well.

Whereas coffee demand has slowed, pet food is a booming market. In 2011, the global pet food market was worth $58.6 billion. By 2017, it is expected to grow by nearly 28% to $74.8 billion.

The North American market alone makes up 38% of that, and Big Heart holds the third-largest share of the market in the United States.

Closed in late March 2015, the acquisition is set to contribute $2.4 billion and 4%-to-5% organic growth to SJM’s annual sales by fiscal 2016. For now, this drastically reduces Smucker’s dependence on the coffee market, since revenues are expected to redistribute roughly as follows: coffee (32%); pet food (30%); peanut butter, fruit spreads, shortening and baking goods (21%); with smaller brands making up the rest.

Bottom line, J.M. Smucker is an iconic, well-diversified business with a loyal customer base in North America. And, being so firmly established in the consumer staples market, the company is shielded against most market volatility, as evidenced by its performance during the recession as well as its low beta of just 0.98.

SJM also stacks up well against its peers in the processed and packaged goods industry. Its price-to-free cash flow is 35, versus the industry average of 79 Its price-to-book value is 2.3, while the industry average is -11.2. At 11.2%, SJM’s net profit margin far outshines its competitors.

Smucker has made more than 30 acquisitions over the years. With each new deal, the company’s power broadens, ensuring all of its brands gain exposure to optimal retail channels.

Risks To Consider: As part of this year’s acquisition of Big Heart Pet Brands, SJM took on $2.5 billion of the company’s net debt. If it’s not paid off quickly, the debt load could hinder Smucker’s credit profile, affecting its ability to borrow in the future. The company also draws less than 5% of sales from outside of North America.

Action To Take –> J.M. Smucker is poised for renewed long-term growth from the booming pet food industry and is making strong moves to strengthen its coffee business. Shares currently trade at a forward price-to-earnings ratio of 20.3 and yield 2.2%. SJM is at an all-time high and isn’t cheap, but investors who buy today could take advantage of projected revenue growth of 35% in fiscal 2016.

When you invest in a company like J.M. Smucker, you can buy today and hold it for the rest of your life. You’ll no longer need to worry about things like inflation or deflation… bear markets or recessions… flash-crashes or rising interest rates. Stocks like SJM provide a sort of “worry-free” performance that many of the world’s richest investors, politicians, and businessmen have used to obliterate the market. If you’d like to learn more about them — including some names and ticker symbols — click here.