NEW YORK CITY --Kraft Foods Group Inc. today cut prices of its Maxwell House and Yuban coffees by around 6%. The move follows a price reduction by rival J.M. Smucker Co., announced earlier this week. Both companies said declines in prices for green coffee prompted the reductions.
Kraft's price-cutting initiative does not extend to its premium brands like Gevalia. A spokesman for Kraft said Gevalia has been competitively priced since the brand's roast and ground prices were cut by about 10% in May 2012.
Futures of arabica coffee, the world's most cultivated and consumed variety, have declined almost 30% over the past year, because of a record harvest from Brazil, the source of about one-third of the world's coffee.
U.S. food companies had raised prices in 2011, when arabica futures surged above $3 a pound. Futures are now trading around $1.40 a pound.