The business stories that matter, by Fortune's Colin Barr
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January 31, 2008, 7:42 am

P&G brewing up a Folgers spinoff

Forget Starbucks (SBUX). Caffeine-seeking investors will soon have a new coffee stock at their disposal - Folgers. Parent Procter & Gamble (PG) said Thursday it will separate its Folgers unit in a spinoff or split-off transaction later this year. Folgers - which made $350 million in operating income last year on sales of $1.6 billion - employs 1,250 workers and will be headquartered along with P&G in Cincinnati. Folgers has been part of Procter & Gamble for 45 years, but the parent believes it’s time to turn the java unit loose. Purely by coincidence, the decision comes as a looming recession threatens to weigh down consumer spending and big chains like Starbucks cool their growth plans.

“P&G believes the transaction will be good for the coffee business as the business will get greater priority and attention as a standalone company,” the maker of Tide and Crest said in a press release. “This separation allows us to focus on our core businesses and The Folgers Coffee Company to further develop and leverage its brand portfolio in a coffee-specific business model.” Plus, Wall Street will get a chance to decide whether the best part of waking up is Folgers in its cup.

but then Juan Valdez would feel left out!

Posted By Jim, Shreveport, LA : January 31, 2008 5:40 pm

harold-

i could not, as you can see. perhaps the one saving grace of that line is that it doesn’t involve any reference to mrs. olson - a tack i considered before deciding it might be too obscure even by my questionable standards.

Posted By Colin Barr : January 31, 2008 3:23 pm

You just couldn’t resist adding that last line, couldn’t you?

Posted By Harold, Los Angeles, CA : January 31, 2008 1:30 pm
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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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