Title: Navigating Growth and Sustainability in the U.S. Coffee Market: Insights from J.M. Smucker’s Joe Stanziano
Coffee is among the most favored beverages among adult consumers in the United States, and the J.M. Smucker Company has recognized it as a significant avenue for both success and innovation. The company, which owns brands like Folgers and Café Bustelo and has the license to produce Dunkin’ coffee, commands over a quarter of the U.S. at-home coffee market. With coffee being a sector the company anticipates will continue to expand, Smucker also faces challenges such as sustainability and discovering new ways to innovate a beverage that has been a staple for generations. Joe Stanziano, Senior Vice President and General Manager of coffee at Smucker, recently spoke with Food Dive at the company’s headquarters regarding the coffee business, its challenges, and future prospects. This is the second part of their conversation, with the first part accessible here. The interview has been condensed for clarity and brevity.
FOOD DIVE: What initiatives are you implementing to enhance sustainability in the coffee sector?
STANZIANO: The coffee supply chain is quite unique, and as the largest coffee roaster in North America, we are deeply committed to it. We source coffee from 14 countries, with cultivation occurring in over 50 countries worldwide. A crucial point that often goes overlooked is that coffee is not typically produced on large agricultural farms; it predominantly comes from small, family-owned farms globally, which are vital to coffee production. This presents a challenge. We actively work within these countries to support farmers from environmental, economic, and social sustainability perspectives. Our goal is not only to secure coffee for future growth but also to ensure it remains a viable livelihood for farmers. We collaborate with numerous peers and NGOs to educate farmers on better practices to enhance yield and business management, fostering sustainability and encouraging the next generation to see farming as a viable career.
Given that Smucker holds over a quarter of the U.S. at-home coffee market, what growth opportunities do you foresee?
STANZIANO: We must pursue growth through various avenues. This includes expanding our market share for existing brands and fostering an increase in coffee consumption. Innovation plays a pivotal role here. While many consumers have their go-to coffee, there is a strong inclination to experiment. Seasonal flavors are particularly popular—everyone knows that pumpkin spice makes its return in the fall. Our focus is on innovation and introducing new formats that cater to consumer needs. We aim to address consumer concerns regarding convenience, knowledge about roasting, and different roast profiles. Over the past five to ten years, there has been a notable shift in consumer preference toward darker roasts, as people seek bolder flavors.
How has the pandemic influenced the at-home coffee business?
STANZIANO: The pandemic was challenging for many, but it proved beneficial for at-home coffee companies like ours, as people were confined to their homes. With workplaces closed and restaurants shuttered, consumers began to experiment more. It accelerated existing trends, prompting consumers to take on the role of at-home baristas, exploring various brewing methods and machines. Moving forward, we anticipate continued hybrid work models, which means consumers will likely begin their days at home and have more options for brewing their first cup.
At CAGNY, CEO Mark Smucker discussed potential mergers and acquisitions (M&A) to advance coffee. What types of acquisitions are you considering?
STANZIANO: Our M&A strategy remains consistent; we are always on the lookout for opportunities. We approach acquisitions thoughtfully, as we value our portfolio and recognize each brand’s unique positioning. We consider how a potential acquisition will fit within our overall portfolio and how it can drive growth without hindering our existing brands. We also focus on capabilities—whether an acquisition could enhance our skills in certain areas such as product form, market entry, or packaging—offering both immediate benefits and broader applicability across our entire portfolio.
Where do you envision Smucker’s coffee line heading in the next 12 to 18 months?
STANZIANO: We will continue to support our consumers at retail. This year has been challenging due to inflation affecting various categories, including food and gas. We are committed to investing where possible to maintain competitive price points, ensuring that our consumers can still purchase our products.
You mentioned prices. Given that coffee is a commodity, how do you manage to keep prices affordable for consumers?
STANZIANO: Our sourcing capabilities are unparalleled. We have a world-class commodity sourcing team based in Orville, complemented by offices in Brazil and Vietnam. This global resource network allows us to stay informed about conditions in origin countries and effectively leverage our knowledge and hedging strategies to secure high-quality coffee at competitive prices. Additionally, our organization excels in cost reduction through our supply chain and operations, as we continuously seek ways to improve efficiencies and drive costs down. This approach enables us to reinvest in brand building and maintain a competitive pricing structure. However, it is challenging when your product consists of a single ingredient. Thus, we dedicate considerable effort to this area.
Incorporating wellness trends, such as those associated with calcium citrate and berry flavors, could also be a focus for future innovations, as consumers increasingly seek health-oriented options in their beverages.
