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P&G's Folgers Enters Premium Coffee Market

Folgers coffee, marketed by Procter & Gamble, wants to move up in the world. In an effort to catch up with the premium coffee market, Folgers will try to improve its meat-and-potatoes image with a new line of upscale, gourmet flavors that are wrapped in shiny bags labeled in fancy typefaces. Flavors include espresso roast and caramel drizzle, and the line will be backed by a $20 million ad campaign beginning in September. Says Tami Yamashita, the associate marketing director for Folgers: "We felt it was important to cater to the needs of the consumer." Instead of going after coffee drinkers who frequent Starbucks, Folgers is targeting customers who drink a cheaper coffee every morning at home, but consider finer coffee to be a special treat. The occasional premium coffee drinker is a ripe market. In 2003, 54 percent of adults in the U.S. drank such coffee less than once a week, according to research from the National Coffee Association. But by early 2006, that number was up to 63 percent. And sales of both traditional and premium coffees have risen. In 2004, 45 percent of adults in the United States drank traditional coffee every day; in 2006, the number was up to 53 percent.

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