J.M. Smucker, seeking to reverse declining coffee sales, lowered by an average 6 percent the price of its Folgers and Dunkin’ Donuts brands this week.
Green coffee prices spiked a year ago and roasters were quick to bump their retail prices as much as 38 percent. Consumers responded by cutting back on buying coffee. The price of green coffee has since fallen 45 percent and Smuckers is hoping to regain last quarter’s 10 percent reduction in sales volume.
Other major roasters such as Kraft, which makes Maxwell House coffee, are expected to announce similar rollbacks.
The 6 percent average reduction is the second time since August that Smuckers, the nation’s largest roaster, has dropped prices on its portfolio which also includes Millstone and Café Bustelo.
Prices for Arabica beans on the International Coffee Exchange (ICE) topped a record $3.089 per lb in May 2011, a 34-year high. They have since dropped to around $1.75 per lb.
While there is no direct correlation, caffeine seekers typically drink both coffee and tea. The commodity price of tea has also risen during this period but less sharply.
Sources: J.M. Smucker, Thomson/Reuters