Lower price points and increased marketing investment is expected to generate modest volume growth for J.M. Smucker’s Café Bustelo, Folgers and licensed Dunkin’ brands across the next six months
J.M. Smucker reported volume growth across its Café Bustelo, Folgers and licensed Dunkin’ brands | Photo credit: J.M. Smucker
J.M. Smucker anticipates positive sales momentum for its coffee brands across the next six months, driven by lower pricing and higher marketing spend.
The coffee, food and pet food manufacturer reported broad second quarter volume growth across its Café Bustelo, Folgers and licensed Dunkin’ at-home brands. However, the company’s decision to ‘pass through the benefit of lower coffee costs to consumers’ resulted in sales falling 3% to $685.7m in the period.
“With competitive price points now broadly reflected on-shelf and increased marketing investments planned for the second half of the year, we anticipate continued momentum for the coffee business in the back half of the fiscal year, including low-single digit volume growth,” said CEO Mark Smucker.
J.M. Smucker’s total second quarter net sales fell 12% year-on-year to $1.9bn, primarily due to a divested pet food business in the previous year. The business’ coffee segment contributed 35% of revenues during the period, ahead of Consumer Goods ($464.3m), Pet Foods ($464m) and International and Away From Home ($324.6m).
The coffee, food and pet food manufacturer promotes that its products are found in over 80% of US homes. Alongside its established coffee range, the Ohio-based business makes the Jif peanut butter, Uncrustables sandwich and Milk Bone dog treat brands.