S&P 500
7,582.20
+0.03%
Dow Jones
51,018.80
+0.58%
Nasdaq 100
30,344.40
+0.25%
Russell 2000
2,916.31
-0.54%
FTSE 100
10,378.60
-0.32%
Nikkei 225
66,231.90
+0.67%

Retail

Smucker’s Drops Coffee Prices: Will Others Follow?

Photo of Paul Ausick
By Paul Ausick Published
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Thinkstock
Food processor J.M. Smucker Co. (NYSE: SJM) announced this morning that it was lowering the price on its coffee brands by an average of 6% “in response to sustained declines in green coffee costs.” Smucker’s brands include Folgers, Millstone, Cafe Bustelo, and Dunkin’ Donuts under license from Dunkin’ Brands Group Inc. (NASDAQ: DNKN) in retail channels only.

The question now, of course, is whether Kraft Foods Inc. (NYSE: KFT), maker of Maxwell House and Gevalia brands among others, Starbucks Corp. (NASDAQ: SBUX), Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR), Peet’s Coffee & Tea Inc. (NASDAQ: PEET), and Coffee Holding Co. Inc. (NASDAQ: JVA) will follow suit. Kraft would seem like a good bet to lower prices to compete in the retail space, but the premium coffee roasters are more likely to leave prices where they are as long as they can in order to make a little extra margin.

Last week’s price for arabica beans was about $1.90/pound. A year ago the price was just over $3.00/pound. Robusta (cheaper) beans currently cost about $1.14/pound, about 10% below the five-year high of $1.26/pound set last June.

A continued decline in arabica prices may force the premium roasters to lower prices because the story will hit the headlines and consumers will start making some noise about being gouged by the coffee companies. But that day is a ways off yet. But imagine, both gasoline and coffee prices falling at the same time. What an idea!

Paul Ausick

DISCLOSURE:
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options  Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.
Follow 24/7 Wall St. on Google
Photo of Paul Ausick
About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

Continue Reading

Paul Ausick |

Folgers, Dunkin’ Brand Coffee Prices Rise 9%

After hitting a peak of around $2.15 a pound in mid-April, coffee prices have moderated to around $1.70 a pound…

Douglas A. McIntyre |

Coffee Prices Set to Fall (SBUX, MCD, GMCR, DNKN, KFT, SJM, KKD)

ThinkstockCoffee prices rose steadily from July 2010 to March 2011, before dipping a little, and then climbing back to a…

Paul Ausick |

Your Espresso May Get Cheaper – Or Not (SBUX, DNKN, GMCR)

This year’s harvest of robusta coffee is expected to be near 3.4 million metric tons, far outstripping demand. The largest…

Jon C. Ogg |

Coffee Conundrum: Coffee Shelf Life vs. Corporate Finance (ICE, KFT, SBUX, FARM, GMCR, PEET, CBOU, JO)

ThinkstockCoffee prices have been rising, primarily as a result of a projected failure in the Colombian crop due to heavy…

Jon C. Ogg |

Coffee Starts to Weigh on Roasters and Retailers (SJM, SBUX, GMCR, KFT, MCD, JO, CAFE)

ThinkstockAs is the case with crude oil, people just can’t seem to get enough coffee. Global consumption of coffee rose…

Paul Ausick |

Rising Coffee Prices Threaten Profits

ThinkstockSince the end of January, coffee futures have jumped from around $1.20 a pound to trade near $2.16 a pound…

Paul Ausick |

Prices Rising for Starbucks Coffee

courtesy of StarbucksIn March Starbucks Corp. (NASDAQ: SBUX) CEO Howard Schultz said that the company had no plans to raise…

Douglas A. McIntyre |

America’s Favorite Coffees

courtesy Green Mountain Coffee Roasters Inc.Americans love their coffee. Three-quarters of adults drink coffee and 58% say they drink coffee…

cgblaine22 |

Why You Should Expect Higher Coffee Prices Ahead

The futures price of coffee has basically doubled since early November, leaving one to ask how long can, say, Starbucks…

Top Gaining Stocks

Dell Technologies
DELL • Vol: 42,366,555
NetApp
NTAP • Vol: 15,911,807
ServiceNow
NOW • Vol: 68,243,561
IBM
IBM • Vol: 28,527,546
Hewlett Packard Enterprise
HPE • Vol: 86,996,387

Top Losing Stocks

Coterra Energy
CTRA • Vol: 73,319,495
Clorox
CLX • Vol: 4,744,001
ResMed
RMD • Vol: 3,526,686
Intel
INTC • Vol: 191,680,425
Skyworks Solutions
SWKS • Vol: 5,407,806