How Folgers roasts Starbucks, Green Mountain

The JM Smucker brand is tops in US supermarkets -- by far. Not bad for a 163-year-old name.

By Jonathan Berr Aug 22, 2013 1:26PM
Packages of Folgers coffee are displayed on a shelf at Cal-Mart Market on May 24, 2011 (© Justin Sullivan/Getty Images)Roll over Starbucks (SBUX) and tell Green Mountain (GMCR) the news: The No. 1 coffee brand in U.S. supermarkets is Folgers, which believe it or not predates the Civil War. Sorry, upscale coffee fans, data from Bloomberg Businessweek show that it's not even a close call.

Folgers, which is owned by JM Smucker (SJM), controlled 15.6% of the U.S. market by volume from May through July. Kraft's (KRFT) Maxwell House, which coffee aficionados hate as much as Folgers, had a 10% share. Private-label brands came in third, then followed by Green Mountain with a paltry 4.3% and Starbucks with 3.3%.

That's not too shabby for a 163-year-old brand, which also topped the 2013 Harris Poll EquiTrend rankings of coffee brands.

Businessweek noted that volumes of Folgers climbed 4% from May to July, helped by a clever jingle-writing contest. Smucker's coffee sales are rebounding from the last fiscal year when they were $2.3 billion, little changed from the 2011 period but 1.9% higher than in fiscal 2009.

Besides Folgers, Smucker also makes Dunkin' Donuts (DNKN) packaged coffee, sales of which increased 6% during the recent quarter. CEO Richard Smucker told analysts during the recent earnings conference call that the company's Cafe Pilon brand made "solid gains," the publication says.
Folgers, though, can't rest on its laurels. Starbucks and Green Mountain are eager to expand their footholds in the U.S. and overseas. Single-cup coffee sales such as those used in Keurig K-cup machines are also soaring, hitting $1.8 billion in 2012. That's an increase of 82% from the previous year, according to Packaged Facts. That growth rate is expected to slow to 28% to 29% between 2012 and 2016.

Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr.

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Aug 22, 2013 3:02PM
The problem with mass-market "gourmet" coffees when compared with Folgers: They're not twice as tasty, but they cost twice as much.
Aug 22, 2013 4:50PM
The best part of waking up.... is Folgers in your cup !!!
Aug 22, 2013 11:46PM
The worst part of the single serve machines is the massive amount of non-recyclable material each user creates.  Not an earth friendly method of getting your caffeine kick.
Aug 23, 2013 8:47AM
Folgers or Yuban.  Nothing like a good cup of coffee :o)
Aug 23, 2013 9:45AM
Folgers is also distributed through restaurant suppliers, thus their ability to out-sell most brands. Six out of ten restaurants serve it.
Aug 24, 2013 3:27AM
prefer Folgerd , Maxwell when they get carried away with thier price !
Aug 24, 2013 5:16PM
They all are overpriced.  They also keep cutting the amount of coffee in a can.  No more 1, 2 or 3 lb can.  All are in ounces in an attempt to fool the consumer.
Aug 23, 2013 8:22AM
As usual its about the money.  Look at most beverages... wine, beer, etc.  Cheap always outsells taste.
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