Dive Brief:
- J.M. Smucker reported a 4% drop in profits in its fiscal first quarter, amid problems with its coffee businesses.
- The Orrville, OH-based company cited supply and promotional costs associated with its Folger's coffee brand for the poor performance. In a call with analysts, Smucker also said it has dumped its Life is Good brand of coffee amid lagging sales.
- Rising sales in other brands, including Jif peanut butter and Crisco cooking oils, as well as a volume increase in Folger's sales, helped offset the coffee-related expenses.
Dive Insight:
There's no telling which way coffee prices will move. If the futures market could be predicted, we'd all be rich. Still, there is reason to assume that Smucker won't face the same jump in supply costs in the present quarter. Coffee prices have retreated about 15% from the historic high they reached in April.