J.M. Smucker, for the second time this year, is making its Folgers and Dunkin' Donuts coffee cheaper.
The company announced on May 24 that it is reducing the prices of its coffee products Folgers and Dunkin' Donuts by another 6 percent following a decline in the prices of raw coffee. This is the second time the company is cutting coffee prices. The first 6 percent price reduction occurred in July 2015.
In 2014, Smucker increased the prices of its coffee products by 9 percent, but because quarterly profits dropped by 3.5 percent, the company decided to cut prices to lure back consumers who were dismayed by the price increase.
However, the present price cut is not due to the low demand for coffee but the low prices of raw coffee products.
"For the last several quarters, lower green coffee costs were reflected in promotional pricing for the majority of our packaged coffee products, and we do not anticipate those prices changing significantly," U.S. Food and Beverage Vice Chair and President Steve Oakland said, adding that the price drop is to give consumers the opportunity to take advantage of cheaper raw products.
Sadly, though, for K-Cup pod lovers, the brand is not included in the price reduction. Also, only the Dunkin' Donuts coffee products sold in retail stores will reduce its prices. Dunkin' Donuts products sold at flagship restaurants are excluded.
J.M. Smucker, in its Q3 financial report, showed a 37 percent increase in net sales. The company updated its earnings outlook to hit the $6.99 to $7.09 range from a previous range of $5.84 to $5.94.
The company's CEO Richard Smucker said their strong financial performance is due to the continued success of the coffee business.
"Our overall performance continues to reflect contributions from our key growth initiatives for the fiscal year," said Smucker. "These include launching a number of on-trend products such as Dunkin' Donuts, K-Cup pods, providing consumers lower pricing on Folgers roast ... and delivering on our cost savings and working capital initiatives."
A few weeks ago, Dunkin' Donuts launched a mobile app promotion to celebrate the update.
Photo: Mike Mozart | Flickr
