Companiesandmarkets.com

US coffee market dominated by JM Smucker

Press Release   •   Jun 25, 2013 09:01 BST

Through 2012, retail volume sales within the US coffee market increased by 8%, and retail current value sales increased by 20%, to reach 753,191 tonnes and US$11.7 billion respectively.

While coffee production was somewhat hampered by the recessionary effects, consistent coffee consumption and stable demand have supported revenue growth. Recent research into coffee's health benefits has also contributed to this growth.

In 2012, off-trade volume sales of coffee increased by 8%, compared with a 3% compound annual growth rate (CAGR) in the period 2007-2012. This was indicative of consumers continuing to brew coffee at home following the economic downturn. Meanwhile, on-trade volume sales of coffee grew slower than in the previous year, at 2%, which was further indicative of at-home brewing.

The increased availability and popularity of single-cup brewing systems continued to expand the growth of fresh ground coffee pods in the US. Fresh ground coffee pods increased in retail volume terms by 109% through 2012, outpacing the 2011 performance of 93%. This was mainly due to the increased distribution and popularity of the Keurig single-cup brewing machine, owned by Green Mountain Coffee Roasters.

Green Mountain, which reached licensing agreements with popular on-trade brands such as Starbucks and Dunkin' Donuts, reached agreements with several grocery chains, which welcomed pod coffee onto their shelves due to high consumer demand and more profitable margins when compared with standard fresh ground coffee.

In 2012 The JM Smucker Co was the leading company in coffee, with a 22% share of off-trade volume sales, accounting for 166,448 tonnes. 2012 marked the fifth consecutive year of growth for the company, as off-trade volume sales increased by 7%. JM Smucker's main product is the economy positioned Folgers brand.

This brand increased in popularity during the recession as it was synonymous with value, and from 2007 to 2012 increased in off-trade volume terms by 37%. The company also benefited from the success of licensing agreements with Dunkin' Donuts, capitalising on the growing trend of foodservice branded coffee available at retail.

For more information on the US coffee market, see the latest research: US Coffee Market

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