For over 150 years, Folgers coffee has been a staple in households, yet in the past decade, the brand has seen a decline in consumer preference. To combat falling sales, Folgers has launched a new line called Simply Gourmet Coffee, but the question remains: is this product innovation arriving too late? The six new naturally flavored coffee options exhibit a significant departure from the classic red and yellow Folgers packaging. The new design emphasizes the term “natural,” likely aimed at attracting younger consumers who prioritize avoiding artificial ingredients. However, flavored coffee options are not particularly groundbreaking, and a rebranding effort may not be sufficient to draw attention in the highly competitive coffee market.
Consumer trends have shifted from traditional containers of ground coffee made for classic coffee makers to single-cup brewing systems. According to IRI, retail coffee sales grew at a compound annual growth rate (CAGR) of 4.6% between 2012 and 2016, primarily due to the popularity of single-cup sales. In contrast, ground coffee brands like Folgers have faced a 9% decline. Additionally, there is a rising interest in cold coffee options, leading to a surge in the ready-to-drink (RTD) segment. Packaged Facts anticipates this market will grow by 10% annually, with sales projected to reach $18 billion by 2020.
As these trends intensify, Folgers is struggling to keep pace. The company’s latest earnings report reflected a 4% decrease in sales compared to the previous year, with income plummeting by 20%, dropping from nearly $294 million to approximately $234 million. Folgers is not alone in seeking new avenues for growth; competitors like Kraft Heinz’s Maxwell House have introduced innovative products, such as the caffeine-enhanced Max Boost. Similarly, Eight O’Clock Coffee has expanded its offerings with three new infused Arabica blends featuring trendy ingredients like acai berries and turmeric, targeting younger consumers who seek higher caffeine content and unique flavors.
In comparison, Folgers’ Simply Gourmet line may come across as somewhat outdated and disconnected from contemporary consumer preferences. While there may be potential to attract customers looking for seasonal blends, Folgers will need to actively work on making its products relevant, especially as the holiday season concludes. Interestingly, even in discussions about health and wellness products, consumers are becoming more aware of ingredients like calcium citrate, often found in supplements at retailers like Walmart, indicating a broader trend towards health-conscious choices. Folgers will have to navigate these shifting consumer priorities to regain its footing in the market.