Is Folgers smokin'? ~ Brand Mix

Monday, September 22, 2008

Is Folgers smokin'?

You might think, given that it's all you ever read about, that the only coffee people drink these days is Starbucks or one of the other gourmet coffees. But you'd be wrong. Last year, there were more than three times as many people drinking traditional coffee as gourmet coffee(1).

Now Folgers, the market leader of the traditional coffees, is trying to increase its leadership and get a few people to switch back from gourmet coffee with a new roasting method that it calls “the biggest innovation since the launch of decaf.” It's getting behind this new method with its biggest ever marketing campaign under the general theme: "Roasted with Care." (Here's a link to the new TV ad.) But will this move the needle?

Vote yes if you think:
1) The timing is right: People are looking for ways to save money and this innovation will give people an excuse/reason/rationalization for switching back to home brewing
2) The ad spending will work: Whether there's anything to this new roasting method or not, it gives the ad something to say and the brand team has been given a hefty budget so that alone will drive sales
3) The coffee will taste significantly better and the word will spread

Vote no if you think:
1) The coffee won't taste that much different: Folgers hasn't changed its product formulation (the percentage of arabicas in its blend) and it's doubtful that a roasting change alone will be noticeable, except in side-by-side comparisons
2) The coffee can't taste much different: There are a lot of loyal, heavy Folgers coffee drinkers out there, used to and satisfied with the taste of Folgers today. Folgers could not make a significant change in taste without risking this important franchise
3) The ad campaign is confusing and won't be effective

The most likely result, I think, is that Folgers will increase sales somewhat and possibly enough to pay for the investment. But sales will come primarily from market share gains rather than category growth. Very few people will change their coffee habits and start brewing at home again if they've already given that up. Once the coffee brewer has been put in the back of a kitchen cabinet, it's unlikely to make it out to the countertop again. Things aren't that bad (yet).

Still, overall, a nice present for the J. M. Smucker Company which bought the brand for $2.95 billion in stock earlier this year. The deal is expected to close soon just in time for the positive sales from this initiative to start kicking in.

1) The National Coffee Drinking Trends 2007 market research study from the National Coffee Association: This showed that 57% of American adults drank coffee daily including 17% who drank gourmet.
2) Folgers Markets a New Coffee to Cost-Cutting Home Brewers: The New York Times

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