NORTHFIELD, IL -- Kraft Foods announced on May 18 that it has lowered prices on many of its U.S. coffees, including its flagship brand Maxwell House. The food giant cited lower green coffee costs, which peaked last year. Kraft was the second major U.S. roaster to lower its coffee prices last week.
Effective immediately, Kraft reduced prices on Maxwell House and Yuban roast and ground coffee varieties by about 6%, and Gevalia roast and ground sold in retail outlets by about 10%, according to reports. Non-flavored instant coffees, excluding those sold under the Maxwell House International trademark, were reduced by around 4%
Kraft made its price-cutting move three days after J.M. Smucker Co. reduced the price of its well-known coffee brands, which include Folgers, Millstone, Café Bustelo and Dunkin' Donuts, by an average of 6%. | SEE STORY
Last week's price cuts are the second decreases for both companies since August 2011. The cuts follow several consecutive price hikes prompted by a prolonged rally that lifted ICE arabica coffee futures to a 34-year high above $3 a pound in May 2011. Prices have since dropped more than 40% and are near a 20-month low. Instant coffee is predominantly processed from robusta coffee beans, and robusta futures trading on LIFFE were down about 16% last week from their three-year high in March 2011. Tight supplies of robusta beans could still drive prices up.