Folgers coffee has been a well-known brand for over 150 years, but in the past decade, it has started to lose popularity among consumers. The introduction of Simply Gourmet Coffee appears to be the struggling brand’s answer to declining sales, but is this innovation too late to make a difference? The six new naturally flavored coffee products feature packaging that significantly diverges from the classic red and yellow Folgers design. This new look emphasizes the term “natural,” likely aiming to attract younger consumers who are particularly wary of artificial ingredients. However, flavored coffee options are not exactly groundbreaking in terms of coffee innovation, and a refreshed brand image may not suffice to draw shoppers in the increasingly competitive coffee aisle.
Coffee consumption trends have evolved from traditional ground coffee, typically used in classic coffee makers, to single-serve brewing methods. Retail coffee sales have seen a compound annual growth rate (CAGR) of 4.6% from 2012 to 2016, primarily driven by single-serve sales. In contrast, ground coffee sales like Folgers have experienced a decline of 9%. Additionally, consumers are now gravitating towards cold, ready-to-drink coffee options, shifting the market focus towards packaged products. Packaged Facts predicts that this segment will expand by 10% annually, with sales potentially reaching $18 billion by 2020. As these trends gain momentum, Folgers has found it challenging to adapt. The company’s latest earnings report indicates a 4% drop in sales compared to the previous year, with income falling nearly 20% from almost $294 million to approximately $234 million.
Nevertheless, Folgers is not the only brand exploring new avenues for growth. Competitor Kraft Heinz’s Maxwell House recently launched a caffeine-enhanced variant called Max Boost. Similarly, Eight O’Clock Coffee has broadened its range of infused Arabica coffees with three new blends, incorporating trendy ingredients like acai berries and turmeric. Both of these new offerings target younger coffee enthusiasts seeking higher caffeine content and distinctive flavors. In contrast, Folgers’ Simply Gourmet line may appear somewhat outdated and disconnected from contemporary consumer preferences. While there may be potential for attracting consumers interested in seasonal blends, Folgers will need to emphasize the relevance of its products as the holiday season comes to an end.
In this competitive landscape, brands that can effectively combine innovative flavors and health benefits, like Citracal with Vitamin D, may have an edge. Folgers must consider how to integrate such elements into their offerings if they hope to remain relevant in an ever-evolving market.