NEW YORK — As the coffee category has transformed over the last few years, the J.M. Smucker Co. has shifted its portfolio toward the faster-growing premium and K-Cup segments, said John Brase, chief operating officer, speaking at the company’s Dec. 14 investor day presentation. Premium brands Dunkin’ and Cafe Bustelo as well as K-Cups have become the drivers of Smucker’s coffee portfolio, now accounting for over 50% of coffee sales, Mr. Brase said.
“The at-home category continues to evolve, though,” he said. “And we are starting to see consumers experience a shift in how they define what it means to make a cup of coffee. At-home coffee is expanding from a morning cup of Joe to be more about different experiences throughout the day.”
Mark Smucker, president and chief executive officer, explained the company’s view of unfolding coffee trends.
In the first wave of consumption, Mr. Smucker said, coffee became generally accessible with at-home brands such as Folgers. The second and third waves were seen in the rise of coffee shops and growing interest in craft coffee. Mr. Smucker said the company sees the fourth wave of coffee emerging in home-sourced specialty drinks and social media influence.
Among those specialty drinks will be a line of Dunkin’ cold-brew liquid beverages the company plans to launch in the spring of 2023.
Joseph Stanziano, senior vice president and general manager of coffee, said under Smucker’s ownership the Dunkin’ brand has more than tripled.
“Just in the last three years, we’ve added almost $200 million in revenue,” Mr. Stanziano said. “That’s the equivalent of adding a top-10 brand in the category.”
Smucker said it expects annual net sales for the Dunkin’ brand to reach $1 billion in the next four years.
“So, as we think about the path to $1 billion, we think there’s multiple opportunities to get there,” Mr. Stanziano said. “Base business, we have core distribution opportunities as well as market share gains, innovation, seasonal flavors and the new cold brew in K-Cups and roast and ground. … We’re really excited to launch Dunkin’ in liquid concentrates this spring.”
Mr. Stanziano said the “fourth-wave” coffee consumer is looking for ways to replicate coffee shop creations at home.
“They’re looking for convenient solutions to really create and prepare these specialized drinks,” he said “And as the leader in at-home coffee, we can play in this space, right? We have the brands. We have deep coffee knowledge and expertise. We’re making investments in capabilities and strategic partnerships. And this will really put us in a good position as this space continues to grow.”