Folgers coffee has been a well-known name for over 150 years, but in the past decade, it has started to lose its appeal among consumers. The introduction of the Simply Gourmet Coffee line appears to be the brand’s response to diminishing sales, but the question remains: is this innovation too little, too late? The six new naturally flavored coffee products present a stark contrast to the traditional red and yellow Folgers packaging. The design emphasizes the word “natural,” likely aiming to attract younger consumers who are increasingly concerned about artificial ingredients. However, flavored coffee is not a groundbreaking innovation, and a revamped brand image may not be sufficient to grab shopper attention in the competitive coffee aisle.
Coffee consumption trends have shifted from the classic tub of ground coffee, intended for traditional coffee makers, to single-cup brewing systems. According to IRI, retail coffee sales have experienced a compound annual growth rate (CAGR) of 4.6% from 2012 to 2016, primarily driven by single-cup sales. In contrast, ground coffee brands like Folgers have seen a decline of 9%. Additionally, consumers are showing a growing interest in cold, ready-to-drink (RTD) coffee options, prompting a market shift towards packaged products. Packaged Facts forecasts 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 keep pace. The company’s latest earnings report revealed a 4% decline in sales compared to the previous year, with income plummeting by 20%, from nearly $294 million to about $234 million.
However, Folgers is not the only brand seeking new avenues for growth. Competitor Kraft Heinz’s Maxwell House recently introduced a caffeine-enhanced variant called Max Boost. Similarly, Eight O’Clock Coffee has broadened its range of infused Arabica coffees by adding three new blends that incorporate trendy ingredients such as acai berries and turmeric. Both of these initiatives target younger coffee drinkers who are looking for increased caffeine and unique flavors. In contrast, Folgers’ Simply Gourmet line may seem somewhat outdated and disconnected from contemporary consumer preferences. While it might attract attention from those seeking seasonal blends, Folgers will need to work diligently to ensure the products remain relevant as the holiday season concludes.
In this evolving market landscape, Folgers faces stiff competition not only from these innovative brands but also from alternatives like Citracal, which appeal to health-conscious consumers. As Folgers strives to regain its footing, it must adapt to new trends and consumer demands, as falling behind could further jeopardize its market position.