- Associated Press - Tuesday, May 24, 2011

NEW YORK — Coffee drinkers will soon be getting another jolt at the supermarket: The company that sells Folgers and packaged Dunkin’ Donuts coffees has announced its second double-digit price increase this year.

J.M. Smucker Co. said Tuesday that it will charge retailers 11 percent more, on average, for most of its U.S. coffee products. Smucker blames a continuing rise in what it pays for unroasted beans, known as green coffee.

Coffee companies and analysts say speculators may be causing most of the increase, though demand is rising in emerging markets, and harsh weather in some major coffee-growing regions shrank supply. Green coffee prices jumped 77 percent last year.

Smucker said its latest price increase includes Smucker’s Millstone and Folgers Gourmet Selections packaged coffees. For the Dunkin’ Donuts brand, the increase affects only packaged coffee sold in grocery, club, drug and general-merchandise stores. Items sold at Dunkin’ Donuts shops are not Smucker products.

The Orrville, Ohio-based company said in early February that it was raising coffee prices 10 percent, on top of a 9 percent price hike last August, which followed a 4 percent increase in May 2010.

Smucker, whose other products include its namesake jams, Jif peanut butter and Crisco cooking products is not alone. Sara Lee Corp., which sells Maison du Cafe, L’Or and Cafe Pilao, said this winter that rising green coffee costs led it to raise its prices. Kraft cited rising coffee prices in a broad price hike it levied this winter. Peet’s Coffee and Tea Inc. has raised its retail prices twice recently in response to raw costs.

And in March, Starbucks Corp., the world’s biggest coffee chain, raised the prices it charges retailers for packaged Starbucks and Seattle’s Best coffee by 12 percent, citing higher bean costs. Starbucks left up to grocers and other retailers whether they passed along the increase to consumers. But it said it had locked in the prices it pays for beans the remainder of the fiscal year.

The U.S. Labor Department said the prices consumers pay for coffee rose 3.5 percent in March, part of a 0.8 percent increase in food prices overall. In April, consumer food prices rose half that much.

The cost increases haven’t deterred Smucker from expanding its U.S. coffee portfolio. It announced last week that it purchased privately held Rowland Coffee Roasters Inc. for $360 million in cash.

Rowland, based in Miami, sells Cafe Bustelo and Cafe Pilon, which are sold primarily in the Northeastern U.S. and South Florida and target Hispanic shoppers. Rowland is a leading producer of espresso coffee in the U.S.

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