* Kraft cuts Maxwell House/Yuban roasts by 6 pct
* Gevalia, Maxwell House International prices not impacted
* Maxwell House 4th biggest in 2012 U.S. coffee market
By Marcy Nicholson
NEW YORK, Feb 21 Major U.S. roaster Kraft Foods
Group Inc followed the maker of Folgers coffee on
Thursday, and cut the price of its flagship coffee brand Maxwell
House by a relatively modest amount compared with the arabica
coffee market's decline.
Kraft reduced its Maxwell House and Yuban roast and ground
coffees by approximately 6 percent. It cut its Instant Maxwell
House and soluble Sanka decaffeinated coffees by roughly 5
percent, effective immediately.
The price cut is due to "sustained declines in the green
coffee market," Kraft spokesman Russ Dyer said in an email,
adding this only affects coffee sold in the United States.
The company's move follows two days after Folgers-maker J.M.
Smucker cut its U.S. list retail prices by approximately
6 percent, for the same reason.
Folgers holds the biggest market share for fresh and
instant coffee in the United States, having reached 11.8 percent
in 2012, falling from 13.2 percent in 2011, according to
Euromonitor International data.
Maxwell House holds the fourth biggest market share, after
Keurig and Starbucks, at 6.8 percent in 2012, down from 7.3
percent in 2011, the data showed.
Kraft's Gevalia, Maxwell House International, Tassimo, and
Gevalia and Maxwell House Single Serve Cup brands are not
included in the price change, Kraft's Dyer said.
It was the third round of coffee price cuts in the United
States for both roasters in the last year-and-a-half, with both
Smucker and Kraft last lowering their coffee prices by
approximately 6 percent each time in May 2012 and August 2011.
The cost of the raw product, in this case arabica coffee
beans, which are typically roasted for brewed blends, recently
fell to its lowest level in more than 2-1/2 years.
Arabica coffee futures trading on ICE Futures U.S.
have seen a volatile few years. In an 11-month rally that
finished in May 2011, the market more than doubled in price,
taking it above $3 per lb and to the highest level in 34 years.
Smucker and Kraft raised their retail list prices four times
between May 2010 and May 2011, but only a fraction of the rise
seen in arabica beans with the maker of Folgers increasing its
list prices by some 38 percent during this time.
Coffee importers and analysts have said that many roasters
increased the percentage of the less-expensive robusta coffee in
their blends to cope with the soaring cost of arabica beans.
Robusta coffee has traditionally been made into instant
coffee. The details of coffee blends are highly secretive for
most roasters, leaving many guessing about robusta percentages.
While arabica futures have tumbled 55 percent from the May
2011 peak, reaching the lowest in more than 2-1/2 years earlier
this week at $2.3760 per lb, major U.S. roasters have cut their
list retail prices by roughly 17 percent over the past
Robusta futures trading on the London International
Financial Futures Exchange settled up 0.3 percent at $2,069 per
tonne on Thursday, down only about 23 percent from their March
2011 peak at $2,672 per tonne.