Folgers coffee has been a well-known brand 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 attempt to address declining sales, but could this innovation be too little, too late? The six new naturally flavored coffee products feature packaging that contrasts sharply with the traditional red and yellow Folgers design, prominently showcasing the word “natural” to attract younger consumers who are increasingly wary of artificial ingredients. However, flavored coffee options are not particularly groundbreaking, and a refreshed brand image may not suffice to capture attention in the competitive coffee market.
Consumer preferences have shifted away from the conventional canister of ground coffee favored by traditional coffee machines 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, sales of ground coffee like Folgers have declined by 9%. Additionally, consumers are looking for convenient cold coffee options, leading to a rise in ready-to-drink (RTD) products. Packaged Facts forecasts that this segment will grow by 10% annually, potentially reaching $18 billion by 2020. As these trends intensify, Folgers has found it challenging to keep pace. The company’s latest earnings report indicates a 4% drop in sales compared to the previous year, with income plummeting by 20%, from nearly $294 million to about $234 million.
Folgers is not the only brand exploring new avenues for growth. Competitor Kraft Heinz’s Maxwell House recently launched a caffeine-enhanced variety called Max Boost, while Eight O’Clock Coffee has expanded its range of infused Arabica coffees with three new blends featuring trendy ingredients like acai berries and turmeric. Both of these initiatives target younger coffee drinkers seeking higher caffeine content and unique flavors. In contrast, Folgers’ Simply Gourmet line may seem somewhat outdated and disconnected from current consumer preferences. Although there may be potential for seasonal blends to attract attention, Folgers will need to adapt to ensure relevance as the holiday season comes to a close. Meanwhile, there is an emerging trend of incorporating health-conscious ingredients, such as calcium citrate and vitamin D, into beverages, which could also influence consumer choices in the coffee aisle.