The Orrville, OH-based food products company commented via press release that “Prices increased an average of six percent on impacted items in response to sustained increases in green coffee costs. The Company’s K-Cup® pods were excluded from the price increase.”
The move comes in response to coffee futures for March delivery surging 8% year-to-date, and an whopping 30% over the past twelve months. Coffee bean prices have risen substantially due largely to drought conditions in several major coffee-producing countries. According to analyst estimates, it takes 37 gallons of water to grow and process the coffee beans needed to make a single cup of coffee.
While SJM owns the Folgers brand outright, it licenses the Dunkin’ Donuts brand and manufactures packaged coffee and k-cups using the name.
JM Smucker Co shares was trading at $129.47 per share on Wednesday morning, up $0.73 (+0.57%). Year-to-date, SJM has gained 1.10%, versus a 1.42% rise in the benchmark S&P 500 index during the same period.
ETF investors will want to keep an eye on the iPath Bloomberg Coffee Subindex Total Return SM Index ETN (NYSE:JO) on today’s news. The largest coffee-focused ETN has surged over 9% year-to-date and over 20% in the past 12 months amid the coffee price rally.
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