Kraft set to cut price on its premium Gevalia coffee

The maker of Maxwell House coffee will lower the U.S. retail list price for its premium Gevalia brand for the second time in a year, a Kraft Foods Group Inc spokesman said on Friday, after arabica coffee futures fell to a three-year low.

Effective on Sunday, Kraft will cut its recommended retailprice of its 12 oz Gevalia retail bagged coffee by 6 percent, bringing it to $7.89 per bag from $8.39, due to sustained declines in the green coffee market, Kraft spokesman Russ Dyer said in an email.

This follows a decrease of 10 percent in May 2012, he said.

Gevalia Single Serve Cups, Gevalia e-commerce SKUs and Tassimo Gevalia T Discs are not included in the price decrease, he added.

The benchmark arabica coffee futures contract trading on ICE Futures U.S., were up slightly from Monday's three-year low at $1.3270 per lb but down nearly 14 percent since trading at roughly $1.41 per lb at the end of May 2012.

The benchmark robusta coffee futures contract trading on Liffe was down about 7 percent from May 2012 at around $2,015 per tonne.

Arabica coffee is generally more expensive than the more bitter robusta bean and is typically roasted for brewed blends. Although robusta has traditionally been the bean of choice for instant coffee, some roasters include it in their roast and ground blends as a lower-cost alternative.

The price reduction comes after major U.S. roasters, including Kraft, reduced the price of their flagship coffee brands in February, marking their third round of coffee price cuts within 1-1/2 years amid falling green coffee prices.

Kraft reduced prices on its Maxwell House and Yuban roast and ground coffees by about 6 percent, and its Instant Maxwell House and soluble Sanka decaffeinated coffees by roughly 5 percent then. This followed a similar price cut by Smucker's on its Folgers brand.