Jan. 18, 2011
Coffee is the second largest commodity market next to oil, and growth is expected to continue at a strong pace. The US coffee market is approximately US$40 billion (inclusive of both retail and food services sales). The US ground coffee market is about US$1.9 billion and it is estimated to grow up to 2.8 billion by 2012. Folgers retail sales is 44% of the overall ground coffee market.
B. Target Market: 54% of adults living in the USA drank coffee every day, about 166 million people. Another 29% occasionally consume coffee and 17% do not drink coffee. Regular coffee drinkers in the USA have about three cups daily---that's about 336 million cups of coffee. However, college Students drink far less coffee than their baby boomer parents, and, when they do, it's more likely to be on the go. Only 37% of young American adults 18-to-24 drink coffee, compared with 60% of those 40-to-59 and 74% of those 60 and over. Folgers will focus on College Students because they have the largest potential for growth. Within 5 years they will be married and will have less disposable income but they will want to maintain their premium coffee consumption, but without paying the high price.
C. Target Market Growth: College students continue to grow at a steady pace, at nearly 13%, Business workers continue to add value and growing at 5%, Seniors are becoming an important part of consumers, growing at almost 2%. Therefore, college students represent the most lucrative opportunity.
Since Folgers merger with J.M. Smucker Co., the company has been financially successful. Folgers had added 856 million in sale and 241 million in profit during fiscal year 2010.
Our strength is our everyday affordability and trusted name. We now have a first place market share of 44.8% of home brewed coffee market, followed by Maxwell house and Nestlé. However, we realized that our major consumers are adults over the age of 40 and the college students consists only 13% of our sales. We believe this is due to our brand image of being family/ senior brand and the fact that college students tend to buy coffees on the go. This group will soon become family/ office drinkers and we must take this opportunity to capture this market now.
Our goal is to increase market share of college students by 2% in the first year and 1.5% in the second year. In order to meet our objectives, we will 1) Introduce new packaging to change the image, maintaining current product line 2) Increase distribution to college students; 3) Hold promotions and events at college/ universities.
Controls will be measured before and after the campaign with customer satisfaction surveys and vendor statistics to analyze sales patterns.
: Folgers coffee competes for retail shelf space with other coffee product producers, both branded and private label. Folgers is confident in its ability to be a strong competitor because of its brand, high quality, varied offerings, innovations, and distribution network #1 Folgers: $856 million in sales: Since the acquisition sales have doubled the Folgers’s market cap, this proves we are the leaders in selling coffee by far with a market share of 44.8%. #2 Maxwell House: $660 million in sales: The second largest coffee brand, with a market share of 34.6%, Maxwell House offers ground caffeinated, ground decaf, flavored coffee and instant coffee. #3 Nescafe Taster’s Choice $391 million in sales: Nescafe Taster’s Choice offers original and decaffeinated brand, Gourmet Roast. Their largest size is 12 oz. jar Flavor Coffee like Vanilla and Hazelnut are sold as the single serve packets. Nescafe has a market share of 20.5%. S.W.O.T ANALYSIS
Affordability: Folgers Classic Roast is an excellent affordable option for ground coffee when trying to make smart money decisions in today’s economy. Compared to its...