J.M Smucker to raise prices

J.M Smucker became one of the first coffee companies to blink as the Ohio-based firm announced that they would be raising the price of their coffee products – excluding K-Cups – by 9% in the face of increased costs and narrowing profit margins.

Such a decision has been coming for weeks: Wholesale prices have surged this year, a reaction to the severe drought in Brazil which has negatively affected this year’s harvest. The current status-quo pricing structure would have to come to an end at some point. 

And that point appears to have been yesterday.

“What Smucker is facing is that they’ve burned through their low priced coffee, and now they have to replace it with higher priced coffee”, explained Dan Cos, the president of coffee analytics company Coffee Enterprises, in a simplistically forthright manner.

Retailers and consumers are expected to see this increase passed onto their shoulders in due course, though a number of purchasers were left out in the cold regarding the news. A store manager in Manthattan, according to CNN Money, was unaware of the hike, though Maribeth Burns, a spokeswoman for Smucker, declared that not all retailers have been informed or had heard about the news due to its relatively recent announcement

Smuckers is the first major roasting company to raise their prices upwards due to the pressure placed upon their business model by the risings costs of coffee. Others have, so far, resisted upping their prices with Starbucks even going so far as to suspend purchases, opting to ride the wave out until it crests before returning back to the buying market.

Burns also clarified that the increase will not directly impact Dunkin’ Donut franchises, with the new pricing structure only applying to “retail, drug mass merchandise and club outlets”.

The implications for Smucker’s price rise are yet to be seen across the industry as a whole, but one question that analysts are pondering is; ‘will other companies follow suit?’