Retail coffee prices rise by 9-10%

Kraft (KRFT) raised prices by 10% on its product lines - Maxwell House, Yuban roast and ground coffee brands, as a result of climbing bean costs which went into effect on June 6.

J.M. Smucker (SJM) has already increased prices on its retail brand's Folgers, Dunkin' Donut roast, and ground coffee products by ~9% last week. This past week the company also reported lower sales in FQ4 due to pricing actions in the quarter.

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Comments (4)
  • canb888
    , contributor
    Comments (675) | Send Message
    The pattern seems to be the same for many industries. When the raw material (coffee beans in this case) prices went down, most of them held the retail price. When the raw material prices started going up, they raise the retail price including for those inventory purchased when prices were lower. Shareholders should be happy. What business won't do that? And yet the Fed is talking about inflation being too low (after adjusting the formula for calculating CPI many times in the past), thus close to zero interest rate (EU rate even going negative). We seem to be experiencing the biggest robbery in human history, robbing from the baby boomer savers and giving it to the borrowers. Instead of being robbed, some boomers (albeit a minority of that generation) decided to borrow and invest with a view to exit fast on any sign of a bear market. They learn to profit from the unique and new current market phenomena which have little precedent if any.
    8 Jun 2014, 12:18 PM Reply Like
  • King Rat
    , contributor
    Comments (1740) | Send Message
    In 1920, coffee was 47¢/pound. 94 years later is is just under $3.80 (33.9oz at Amazon for $7.98). That's about a 2.2% annual increase. SJM's dividends have grown (at least over the past 5 years) at 8%, with a current yield of... 2.2%.


    I'll address the economic mid-60% of the baby boomers. I have had a lot of them for neighbors. As you say, a minority of them bothered to save. I only had 2 neighbors of about 50 who had any savings beyond 401(k) and social security. Several would buy new cars every 3 years and go on exotic vacations by taking HELOCs on their homes.


    Now they cry foul as their neighbors who kept cars for 15-20 years, paid off their homes, took simple vacations, and put extra money in IRAs, F/HSA, and regular investment accounts, now live off the dividends.


    I grew up with many adults telling me the story of the ants and the grasshopper but apparently many of them did not listen to their own admonitions. There is no excuse why all boomers in that middle 60% group couldn't be happy living off of 2-3% dividends that increase at 6-8%/year.
    8 Jun 2014, 04:56 PM Reply Like
  • Energysystems
    , contributor
    Comments (2113) | Send Message
    Spot on, King.
    9 Jun 2014, 06:28 AM Reply Like
  • cranmer
    , contributor
    Comments (54) | Send Message
    9 Jun 2014, 11:19 AM Reply Like
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