New Orleans, Nov. 26 - U.S. mass-market coffee roasters are fighting it out over blends on supermarket shelves as they continue to vie for dollars from consumers wanting their morning jolt.
Kraft Foods (KFT) removed robusta beans from its signature Maxwell House brand this fall, making it a 100% arabica product, while industry leader Procter & Gamble (PG) is sticking with robustas in its Folgers blend.
Big U.S. roasters typically use 30%-70% robusta beans -- a hardier variety grown mainly in Asia -- in their commercial coffee blends. The nation's smaller specialty roasters use mostly arabicas from Brazil and Central America.
Kraft went from selling a muddy, musty-tasting Maxwell House product to a better brew this fall, industry members said, but it's costing the company since arabica beans are usually more expensive than robustas.
Maxwell House coffee was reformulated without robustas to offer a richer flavor and no bitterness, while keeping the taste profile that supermarket customers like, said Jerry Densk, Kraft's mainstream coffee marketing director. Consumers who tested the product at no charge approved of it, he said.
So far, Kraft isn't raising prices to keep up with the cost of buying more arabicas, and may be pursuing a long-term strategy to woo customers from Folgers and smaller specialty roasters, experts say. Kraft hiked the price of its 13-ounce can of Maxwell House this fall, but that was only to match an October price rise by Folgers for regular, ground, roasted coffee.
Kraft spokeswoman Bridget MacConnell said savings from efficiencies elsewhere in the company's beverage business have offset higher costs at Maxwell House.
Meanwhile, sales of Maxwell House have lagged since the late 1980s when Folgers overtook it to become the top-selling U.S. coffee brand.
"Folgers blends coffee beans from all over the world with different flavors and roasts to appeal to a wide range of consumer taste profiles," said Bryan Brown, spokesman for P&G Folgers. Folgers Gourmet Selections product line and Folgers Colombian coffee are 100% arabica, he noted.
"Bean type is just one part of the overall roasting process that can be used to impact taste," Brown said, adding that arabicas and robustas have unique qualities when blended and roasted together or individually. Consumers of classic Folgers like its body and full-flavored taste, he said. Folgers, the top selling U.S. ground coffee, "has the highest brand loyalty in the category and continues to deliver the taste preferred by consumers," Brown said.
Pros and Cons of Robustas
Robusta beans are bitter and often taste peculiar on their own -- something like roasted grain. Robustas are mainly cultivated in lower altitudes, while arabicas usually taste best when produced on higher ground.
"Robustas have more essence per bean or a heavier liquid than arabicas, but part of that is unattractive in taste," said Don Schoenholt, president of Gillies Coffee Co. in New York, the nation's oldest roasting firm.
Robustas, however, add flavor to and pump up arabica blends. European roasters for the last four decades have used robustas to round, smooth and give sweetness and weight to blends of all kinds, particularly to espresso blends, according to Kenneth Davids, editor of Coffee Review, a California-based buying guide. For those in need of a pick-me-up, robustas have 30%-40% more caffeine than arabicas.
"Most Americans don't realize it, but the mainstream coffee they drink is more robusta than arabica beans," Schoenholt said. He notes that robustas have been quietly consumed in the U.S. for a while now. The old New York Coffee Exchange in 1912 banned delivery of robustas against its arabica futures contract, saying robustas were inferior after deliveries were made. In the 1950s, however, major U.S. roasters adopted robustas on a wide scale to cut costs, gradually adding more to blends.
American consumers were reintroduced to all-arabica coffee in the early 1990s by specialty shops and small roasters. Specialty sales ballooned in that decade, and U.S. coffee consumption began to grow after a long downturn.
Both Folgers and Maxwell House in the meantime have tried to develop products for different segments of the market.
Kraft CEO Embarks on Quality Initiative
Kraft's change to all-arabica Maxwell House in late 2007 was based a quality initiative begun by its Chief Executive Irene Rosenfeld as the company tries to revitalize its brands and shed slow-growing divisions.
Industry members say Kraft's 100% arabica idea probably emerged from the success of gourmet coffee chains and specialty firms like Green Mountain Coffee Roasters (GMCR) in Vermont, which sells arabicas only. Kraft distributes Starbucks all-arabica supermarket line of coffees, and may have learned something from the experience.
Generally speaking, Kraft's new Maxwell House is tastier than the old version and may stand somewhere between Folgers Classic and Folgers Gourmet Selections or Millstone--a gourmet coffee unit that P&G purchased in 1996--industry members said. They emphasized that taste is subjective, however.
"When the giants battle, do research and come up with improved products, consumers benefit and other roasters learn from their ideas," Schoenholt said.
Densk at Kraft said "information from our consumers after home-use testing reformulated Maxwell House showed that among those who do not currently buy Maxwell House, purchase intent went up by 54%. Among those who do use Maxwell House, purchase intent went up 15%." He said consumers tested "agreed that Maxwell House is now full-flavored coffee without the bitterness."
While Kraft wouldn't reveal how many consumers were involved in its study, Kraft's MacConnell said third-party firms tested the new product in homes of randomly selected, statistically valid consumers. One group tried all arabica Maxwell House, while a second group tested the old blend.
Kraft started giving away hot, Maxwell House coffee in supermarkets and malls this fall, and plans to distribute 2.3 million cups of the reformulated brand in fourth quarter 2007.
P&G and Kraft together control over two-thirds of the U.S. retail coffee business. P&G owns roasting facilities in New Orleans and Kansas City. Maxwell House coffee is produced in Houston; Jacksonville, Fla., and San Leandro, Calif.
Prices of robustas reached 10-year highs in London recently while arabicas eased from a two-year high of $1.4050 a pound in early October and currently are hovering near $1.23 a pound on ICE Futures U.S. in New York.