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Kraft Cuts Coffee Prices 6%

by by Staff Reporter
Posted On: 8/25/2011

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NORTHFIELD, IL -- Kraft Foods Inc., which owns Maxwell House and Yuban coffee brands, is lowering its wholesale prices by about 6%.

The cut will trim roughly 20¢ off each pound of Kraft's roast and ground coffees, while making instant coffee about 2¢ cheaper per ounce. Retailers will set the final prices seen by consumers.

Kraft's price cut, announced Aug. 21, follows that of competitor J.M. Smucker, which a week earlier slashed the cost of its Dunkin' Donuts and Folgers packaged lines 6% because of a drop in coffee bean prices. | SEE STORY

Unfavorable weather conditions for growing coffee and high energy costs have pushed prices to multi-decade highs earlier this year. Kraft raised its prices more than 50% over a 15-month period.

But improving conditions led to better harvests. The price cut by Smucker and Kraft is likely to put pressure on rivals such as Starbucks Corp. and Nestlé to follow suit.

Kraft's price cut doesn't include its Gevalia brand or its Tassimo coffee sold in discs used in single-serving machines, a Kraft spokesperson said.