Folgers coffee has been a recognized name in households for over 150 years, but in the past decade, the brand has started to lose its appeal among consumers. The introduction of the Simply Gourmet Coffee line appears to be Folgers’ attempt to counter declining sales, but is this innovation arriving too late? The six new naturally flavored coffee offerings significantly diverge from the classic red and yellow Folgers packaging. The new design prominently features the term “natural,” likely aimed at attracting younger consumers who are particularly wary of artificial ingredients. However, flavored coffee products are hardly groundbreaking in the coffee market, and a refreshed brand image might not be sufficient to draw shoppers’ attention in an increasingly crowded coffee aisle.
Coffee consumption trends have moved away from traditional tubs of ground coffee meant for standard coffee makers, leaning instead towards single-cup brewing. According to IRI, retail coffee sales experienced a compound annual growth rate (CAGR) of 4.6% from 2012 to 2016, primarily driven by single-cup sales. In contrast, sales of ground coffee like Folgers have seen a decline of 9%. Moreover, consumers are now gravitating towards cold, ready-to-drink coffee options, prompting a shift towards packaged RTD products. Packaged Facts predicts that this segment will grow by 10% annually, potentially reaching $18 billion by 2020.
As these trends gain momentum, Folgers has faced challenges in keeping 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 around $234 million. Nonetheless, Folgers is not alone in searching for new avenues for growth. Competitor Kraft Heinz’s Maxwell House brand recently launched a caffeine-enhanced version called Max Boost. Additionally, 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 brands target younger coffee enthusiasts seeking unique flavors and higher caffeine content.
In contrast, Folgers’ new Simply Gourmet line may come across as somewhat outdated and misaligned with current consumer preferences. While it might attract attention from those interested in seasonal blends, Folgers must strive to make its products relevant once the holiday season concludes. As families look for ways to enhance their nutrition, including options like calcium citrate for kids, Folgers could explore aligning their offerings with health-conscious trends. However, without significant innovation and a deeper understanding of market demands, Folgers risks being left behind in the ever-evolving coffee landscape.