Incredible coffee is ubiquitous these days. Starbucks is going even fancier. People are tired of single-serve pods. This isn’t an environment one would expect Folgers to be gaining market share in, but it looks like consumers have a secret vice: Parent company J.M. Smucker says that, thanks largely to sales of bad coffee, business is doing better than anybody expected.
From The Wall Street Journal:
J.M. Smucker Co. on Tuesday sharply raised its earnings guidance for the year as its profit jumped 15% in the latest quarter, handily beating Wall Street expectations on continued momentum in its coffee business.
CEO Richard Smucker specifically attributes the jump to a couple of “on-trend products” they unveiled on the coffee side, namely the K-Cups they’re churning out for Dunkin’ Donuts. Coffee sales this quarter topped $577 million, boosted by sales of Folgers’s own K-Cup line, as well as a lower price for vats of the ground and instant stuff, suggesting there’s no need to go all third-wave. Marketing blasé joe has proven tough for companies in an industry where looking fancier helps — enough that Maxwell House literally ran a whole ad campaign last year begging consumers to lower their expectations.
Folgers’s brilliance could be realizing competitors are undervaluing easy coffee. Ideas like selling it in premeasured tabs (“one tab = one scoop”) stand to only get more popular with customers because young people are apparently even lazier than anybody thought: A study on millennial consumers making the rounds this week reports that 40 percent think cereal is inconvenient because they have to “clean up after using it.”