J.M. Smucker adapting to the changing needs of coffee drinkers
ORRVILLE, OH — The J.M. Smucker Co. is a leader in the at-home coffee market, which has long been dominated by the daily habit of waking up with a hot cup of Joe. Its portfolio of coffee includes well-known brands including Dunkin’, Folgers, and Café Bustelo. However, as coffee evolves from a morning staple to an all-day, customizable, frequently cold beverage that may, at times, be more comparable to a snack or dessert rather than a pick-me-up, the corporation faces a difficulty in keeping up with fast changing customer tastes.
Smucker’s main business is coffee. With $2.7 billion in revenue and $738 million in segment profit, the unit led the firm by a significant margin in the fiscal 2023, which concluded on April 30, 2023. Pet food, on the other hand, produced a $495 million segment profit in the same year.
In order to sustain the company’s coffee industry, it will be necessary to cater to customers’ needs, which have changed significantly since the COVID-19 pandemic. Vice President of Liquid Coffee Venture Tina Meyer-Hawkes is in charge of guiding the business through the changeover and preserving its top spot in the at-home market.
In an interview with Food Business News, she stated, “The good news is that people like coffee, and we have brands that play well in the category, whether it’s a mainstream value brand like Folgers or our partnership with Dunkin’ that meets the needs of consumers.” Our entire focus is on consumption at home, and since COVID, we’ve seen changes in this area.
“After COVID, people started brewing their own cold coffee at home.” They kind of started a trend that altered the meaning of coffee consumed at home. In the end, coffee functions more as a component of the completed good.
This has resulted in an acceleration of Smucker’s ready-to-pour business.Meyer-Hawkes stated, “Our Dunkin’ concentrates product is a good example.” It enables individuals .
Additionally, social media has fueled the tendency toward personalization. With the rise in popularity of Dalgona coffee, a Vietnamese coffee preparation on Tik Tok, Smucker’s instant coffee business got a boost. Sales of the company’s instant coffee variants started to increase as the beverage was made by whipping instant coffee with cream.
Meyer-Hawkes compared Smucker’s approach to a journey in which every coffee client is served. Meeting the desires of baby boomer and Gen Z customers—who often like a classic hot cup of coffee—as well as younger customers—who are looking for cold items and customization—is a part of the journey.
“Cold coffee has greater adaptability,” Meyer-Hawkes remarked. “When we consider the young consumer who only truly drinks cold coffee, the cold coffee consumer, they virtually picture themselves as at-home baristas making these cold coffee cocktails. To enhance the flavor and mouthfeel, they use whipped cream, various sweeteners, and other ingredients.
Smucker’s approach to coffee, however, goes beyond advances in cold coffee and coffee as an ingredient. The business intends to enter the liquid product market.
“During a Dec. 5 conference call to discuss the company’s second-quarter financial results, Chairman, President, and CEO Mark T. Smucker stated, “We have a venture team that is very engaged in the liquid coffee space, both with some of our smaller Bustelo single-serve options, but more recently with some multi-serve, shelf-stable Dunkin’ Cold Brew items that you can find in the normal coffee aisle.” Thus, even if our experience with liquid coffee is still in its early stages, we recognize its significance and plan to keep growing.
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Therefore, in the short to medium term, it will only make a small difference, but we are dedicated to that endeavor and will keep searching for methods to increase our liquid coffee presence throughout the whole grocery store.”
According to Meyer-Hawkes, the company is trying to meet customers where they are with the introduction of liquid coffee.”We’ve noticed the changes, responded, and have seen a surge in interest (in liquid coffees),” she stated. “We change along with our consumers. Another phase in the coffee journey for consumers is liquid coffee.