The Café Bustelo, Folgers and licensed Dunkin’ at-home parent company will seek to strike a balance between recovering inflationary costs and affordability for customers after announcing a second price hike in five months
.jpg.aspx?lang=en-GB&width=700&height=466)
Café Bustelo has delivered double digit net sales growth in 11 of the last 12 quarters | Photo credit: J.M. Smucker
Ohio-based J.M. Smucker has posted a slight fall in first quarter US coffee sales and said it will increase prices in October 2024 to tackle inflationary pressures and volume declines.
The coffee, food and pet food manufacturer posted net sales of $2.1bn in the three months ending 31 July 2024, primarily driven by its frozen sandwich and spreads segment.
However, J.M. Smucker’s saw revenues fall $1.7m in its US Retail Coffee segment to $623m, which it attributed to lower pricing and constrained consumer spending. Coffee sales across J.M. Smucker’s Café Bustelo, Folgers and licensed Dunkin’ at-home brands currently contribute 29% of total group revenue.
J.M. Smucker lowered the price of its retail coffee in September 2023 to ‘pass through the benefit of lower coffee costs to consumers’. However, the company raised prices in June 2024 to partially offset ‘commodity volatility and inflation’ and will raise coffee prices further in October.
“As always, we will continue to manage our coffee business through a strategy that demonstrates a balance between recovering inflationary input costs, while providing consumers with attractive options ranging from value to premium,” CEO Mark Smucker said on an earnings call.
In a press release, J.M. Smucker said Café Bustelo was one of its best-performing brands during the quarter, while licensed Dunkin' at-home sales plateaued amid lower volumes. Café Bustelo, acquired by J.M. Smucker in 2011, has delivered double digit net sales growth in 11 of the last 12 quarters.