Dive Brief:
- Folgers, owned by the J.M. Smucker Company, is launching a new line of naturally flavored 100% Arabica coffee called Simply Gourmet, according to Prepared Foods.
- Varieties include Natural Vanilla, Natural Cinnamon, Natural Chocolate, Natural Caramel, Natural Chocolate Raspberry and Natural Mint. The new line is available nationwide in 10-ounce packages for an average price of $5.99.
- Celebrity chef and Food Network star Alex Guarnaschelli is partnering with Folgers to serve as a celebrity barista for Simply Gourmet. To promote the collection's products, she has created new recipes with Simply Gourmet blends that consumers can try at home — from cinnamon pumpkin pie spice lattes to vanilla coffee sweet potato puree.
Dive Insight:
Folgers coffee has been a household name for more than 150 years, but the coffee brand has begun to fall out of consumer favor in the last decade. The new line of Simply Gourmet Coffee seems to be the beleaguered brand's solution to dwindling sales, but is this product innovation too little too late?
The six new naturally flavored coffee products look drastically different than the traditional red and yellow Folgers packaging. The design highlights the word "natural," likely in hopes of attracting younger consumers, who are especially concerned about artificial ingredients. But flavored varieties are far from cutting-edge coffee innovation, and revamped branding may not be enough to capture shopper attention in the crowded coffee aisle.
Coffee trends have shifted away from the traditional tub of ground coffee, made for a classic coffee maker, to single-cup brewing. According to IRI, retail coffee sales have grown at a CAGR of 4.6% from 2012 to 2016, mostly thanks to single-cup sales. Ground coffee like Folgers, meanwhile, is down 9%.
Consumers are also interested in cold to-go coffee options, which has shifted the market toward packaged RTD products. Packaged Facts projects this segment will grow 10% year-over-year, and sales could reach $18 billion by 2020.
As these trends grow stronger, Folgers has struggled to keep up. According to the company’s most recent earnings report, sales were down 4% from the year-ago period. Income dropped by a fifth, to nearly $234 million from nearly $294 million a year ago.
Still, Folgers isn't the only brand searching for new paths to growth. Competitor Kraft Heinz’s Maxwell House brand recently debuted a caffeine-enhanced variety called Max Boost. Eight O'Clock Coffee expanded its line of infused Arabica coffees with three new coffee blends, with ingredients like trendy acai berries and turmeric. Both of these launches are geared toward younger coffee drinkers who want more caffeine and unique flavors.
By comparison, Folgers new Simply Gourmet line may look a little dated and out of touch with current consumer demands. It's possible that the brand could get attention from consumers looking for seasonal blends, but Folgers will have to work to make the products relevant as the holiday season wanes.