Folgers coffee has been a recognized name in households for over 150 years; however, in the past decade, the brand has seen a decline in consumer preference. In response to falling sales, Folgers has introduced a new line called Simply Gourmet Coffee, but the question remains: is this innovation too little, too late? The six new naturally flavored coffee products feature packaging that is a stark departure from the classic red and yellow Folgers design. The emphasis on the word “natural” is likely aimed at attracting younger consumers, who are increasingly concerned about artificial ingredients. Nevertheless, flavored coffee varieties are not exactly groundbreaking innovations, and a refreshed brand image may not be sufficient to draw attention in the competitive coffee aisle.
Recent coffee trends have shifted from traditional ground coffee in tubs, typically used in classic coffee makers, to single-cup brewing systems. According to IRI, retail coffee sales experienced a compound annual growth rate (CAGR) of 4.6% from 2012 to 2016, largely driven by single-cup sales. In contrast, ground coffee products like Folgers have declined by 9%. Additionally, consumers are showing a growing interest in ready-to-drink (RTD) cold coffee options, prompting market shifts toward packaged products. Packaged Facts forecasts that this segment will grow by 10% year-over-year, potentially reaching $18 billion in sales by 2020.
As these trends continue to gain momentum, Folgers has struggled to adapt. Their latest earnings report indicates a 4% decline in sales compared to the previous year, with income plummeting by 20%, down to nearly $234 million from approximately $294 million the year before. However, Folgers is not alone in seeking new avenues for growth. Rivals such as Kraft Heinz’s Maxwell House have recently launched a caffeine-enhanced coffee called Max Boost, while Eight O’Clock Coffee introduced three new infused Arabica blends featuring trendy ingredients like acai berries and turmeric. Both of these initiatives target younger coffee drinkers who desire higher caffeine content and unique flavors.
In comparison, Folgers’ Simply Gourmet line may appear somewhat outdated and disconnected from current consumer expectations. While there is potential for attracting consumers interested in seasonal blends, Folgers must strive to keep its products relevant as the holiday season approaches. As the coffee industry evolves, brands must also consider innovations in health supplements, akin to how source naturals calcium citrate has been embraced for its benefits. Ultimately, Folgers will need to find a way to integrate these changing consumer preferences into their strategy, particularly as they face increasing competition and shifting market dynamics.