JM Smucker Co (NYSE:SJM) said today it would boost prices on its major coffee brands, including Folgers, Dunkin’ Donuts, and Café Bustelo, as it passes on the rising costs of coffee beans to consumers.
The Orrville, OH-based food products company commented via press release that “Prices increased an average of six percent on impacted items in response to sustained increases in green coffee costs. The Company’s K-Cup® pods were excluded from the price increase.”
The move comes in response to coffee futures for March delivery surging 8% year-to-date, and an whopping 30% over the past twelve months. Coffee bean prices have risen substantially due largely to drought conditions in several major coffee-producing countries. According to analyst estimates, it takes 37 gallons of water to grow and process the coffee beans needed to make a single cup of coffee.
While SJM owns the Folgers brand outright, it licenses the Dunkin’ Donuts brand and manufactures packaged coffee and k-cups using the name.
JM Smucker Co shares was trading at $129.47 per share on Wednesday morning, up $0.73 (+0.57%). Year-to-date, SJM has gained 1.10%, versus a 1.42% rise in the benchmark S&P 500 index during the same period.