In this first of a two-part interview, Food Dive sat down with Joe Stanziano, senior vice president and general manager of coffee at Smucker’s Orville, Ohio headquarters to talk about the evolving segment for the iconic brand.
J.M. Smucker controls about 26% of the U.S. at-home coffee category. The company owns three of the eight biggest brands in coffee: Folgers, Café Bustelo and CPG packaged Dunkin’. The company’s coffee business is worth $2.5 billion, said CEO Mark Smucker at this year’s Consumer Analyst Group of New York conference.
Nearly two-thirds of U.S. adults say they drank coffee in the last day, according to spring 2023 statistics from the National Coffee Association. With 71% of all coffee consumed at home, according to company statistics, Smucker is in position to continue to shape the category.
Joe Stanziano, senior vice president and general manager of coffee at Smucker, sat down with Food Dive to talk about the coffee business, the company’s navigation of the current economic situation and its future plans for growth. The second part of this interview can be found here.
This transcript has been edited for brevity and clarity.
FOOD DIVE: Give me an overview of Smucker’s coffee business.
JOE STANZIANO: We like to start by saying how much we love being in the coffee business. The category is just a great category. The consumer base is strong and broad. Folgers is the iconic brand. It’s our largest. It’s been around forever.
Our relationship with Dunkin’ Donuts is going on 12 plus years, and that relationship is great. We have the license to source, manufacture, sell and distribute all Dunkin’ products in the retail space. We don’t do anything in the shop, but we work very closely with Dunkin’ corporate. That brand is so strong. It’s been a growth engine for our coffee, and we continue to see more opportunity.
Number three is our little Café Bustelo brand, which we all love as well. It’s been growing double digits. We acquired that back in 11. It has been just on fire. It’s the number one Latin brand in the category. It is a wonderful brand because it really has this great position. It’s very different from anything in the category — not just the product, but the vibe, the branding, the coloring.
These brands are all coffee, but each audience is its own niche. And the way you pursue each of the brands has its own strategy.
STANZIANO: These brands have a lot of equity, a lot of heritage. People know what they expect from this brand, right? We’ve gotta deliver on that. But we also have to evolve with the time and to make sure we are keeping in front of what is happening with the consumer.
You could go back 10, 12 years ago, there was really not a lot of K-Cup business [at Smucker]. The whole Keurig machine was still kind of getting its legs under it. Today, the segment of K-Cup within coffee is [nearly a third of sales].
Café Bustelo is posting some amazing growth. Why?
STANZIANO: It’s great to have a brand like this because it hits on a lot of opportunities. I think this equity can’t be understated. It’s such a standout in the category because of the Latin vibe, the colors, even the packaging. It’s very different than anything on shelf: the yellow and red.
The team has done a great job with the creative. We’re doing a lot of social. It [has] some very vibrant video clips. We’ve collaborated with Latin music stars to actually create unique songs for the Bustelo brand.
It’s not a brand that was just created. It’s got the history. You’ve got these older consumers who grew up with Bustelo, who know the heritage of it, that also gives it a lot of credibility as well.
It was really a brand that started in Miami and New York. The Cuban consumer in Miami. The Hispanic population in New York. It was big in bodegas. We’ve started to push out on that. Texas was a big growth opportunity for us, Chicago, Southern California, trying to capitalize on those higher-index Hispanic markets.
But again, it’s also really relevant with young millennials who tend to live in more big cities, urban spaces. It’s a great combination of pushing into those geographies.
But honestly, Walmart’s putting it in every store nationally, so now it’s showing up in markets that maybe we wouldn’t expect to, and it’s doing very well.
What is your strategy for Folgers, and how do you keep it relevant to both new consumers and those who have had it for their entire lives?
STANZIANO: It’s the blessing and the curse to have a big brand that’s been around. [J.A.] Folgers, 1850, started selling coffee. About three years ago, we embarked on an internal project that reintroduced the brand. There’s nothing wrong with the product, the consumer just didn’t feel it was relevant.
All of our [Folgers] coffee is sourced and produced in New Orleans. We relaunched this campaign, and we talked about our heritage as a brand, our pride in being produced in New Orleans. New Orleans has a coffee vibe nationally, so we really played that up.
We really started to talk about the breadth of products in the Folgers portfolio: different country of origins, different roasts — dark roasts, light roasts. Whatever your palate’s looking for, Folgers has an opportunity.
[We started] really pushing Folgers into the K-Cup space so that if the consumer says: “Look, I’m moving from making a pot of coffee in my Mr. Coffee and I’m going to the K-Cup,” Folgers is there, and we have products.
With the economy the way it is, Folgers is a great value when you think about it compared to a lot of the other products in the space. We’re seeing a lot of opportunity as far as consumers seek value but want really high quality, delicious coffee, Folgers is right there in the middle.