Weathering The Storm
by Julie Cook Ramirez
The low-carb craze may have bitten the dust, but juice makers are still wringing their hands, thanks to hurricane-related citrus shortages.
The poor juice category just can’t seem to catch a break. No sooner had we witnessed the demise of the low-carb craze that had put a chill on juice sales when hurricanes Katrina and Wilma arrived, ravaging the Gulf Coast and wiping out fully one-third of Florida’s citrus crops.
While that state’s citrus growers normally generate 280 million boxes of produce each year, early projections for this winter’s harvest have growers generating enough to fill just 186 million boxes — 34 percent below average. Grapefruit, in particular, was disproportionately affected by the storms, with producers harvesting a measly 16 million boxes worth, down from a 45 million box average — a 65 percent shortfall.
“Grapefruit gets impacted to a larger degree just because of the forces of gravity,” says Tedd Heilmann, pool director for juice and other programs at Organic Valley, La Farge, Wis. “They are bigger and heavier, and when the wind starts blowing, they are the first ones to blow off the trees.”
Organic Valley was forced to abandon grapefruit juice altogether, at least for the short term, while other juice companies turned to new sources of citrus, including Texas, California, Arizona and Mexico. Those juice makers who had already aligned themselves with citrus growers in other areas had a much easier time weathering the storm.
“(The hurricanes) didn’t have a major impact,” says Jeff Damiano, director of marketing for Apple & Eve, Port Washington, N.Y. “We always keep our options open in case of natural disasters, so that we can move quickly somewhere else to secure raw materials.”
Not surprisingly, the citrus shortage forced many juice makers to raise their prices. As a result, the category never experienced the robust recovery that many juice makers predicted was in the making just a few months earlier.
Overall refrigerated juice/drink sales rose a meek 2.3 percent in dollars and 1.2 percent in units across supermarkets, drugstores and mass merchandisers, excluding Wal-Mart, during the 52-week period ending October 2, 2005, according to Chicago-based Information Resources Inc (IRI).
The Silver Lining
While major juice brands found themselves with little alternative but to raise prices in the aftermath of the hurricanes, organic juice companies were spared the extent of their wrath.
As Heilmann explains, the storms were “a little more forgiving” in areas with significant organic citrus production.
“That allowed us to keep a decent supply of juice and not have to raise our price to the same level as others have been forced to do,” he says.
  $ Sales (In Millions) % Change vs. Year Ago Unit sales (In Millions) %change vs. Year Ago
Total Category $3,942.4 2.3% 1,727.9 1.2%
All Other Fruit Juice 80.8 72.3 19.6 59.8
Apple Juice 8.3 -4.4 4.4 1.2
Blended Fruit Juice 209.2 -1.8 81.1 4.3
Cider 46.2 6.3 17.1 3.5
Cocktail Mixes 0.2 -4.8 0.1 -3.6
Cranberry Cocktail/Drink 3.9 -27.2 1.5 -30.7
Cranberry Juice/Blend 1.2 -0.5 0.3 -11.2
Fruit Drink 689.3 10.2 422.5 8.9
Fruit Nectar 14.7 -12.4 5.9 -6.3
Grape Juice 1.6 52.2 0.6 72.1
Grapefruit Cocktail/Drink 1.2 587.2 0.5 533.8
Grapefruit Juice 67.7 -19.8 22.6 -33.0
Juice and Drink Smoothies 46.0 42.0 18.0 21.2
Lemon/Lime Juice 5.8 17.5 4.3 19.5
Lemonade 111.9 10.0 73.3 9.3
Orange Juice 2,614.8 -0.9 1,043.1 -1.8
Pineapple Juice 12.6 16.0 4.7 17.0
Vegetable Juice/Cocktail 26.6 36.0 8.2 28.5
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending October 2, 2005.
SOURCE: Information Resources Inc.
  $ Sales (In Millions) % Change vs. Year Ago Unit sales (In Millions) %change vs. Year Ago
Total Category $167.6 20.5% 101.0 15.0%
Turkey Hill 48.4 22.2 28.9 19.2
Private Label 19.7 13.0 14.9 15.5
Red Diamond 17.7 30.6 10.1 26.2
Bolthouse 13.7 366.1 4.8 318.1
Milo’s 10.0 18.3 5.3 18.5
Nestea 8.7 -0.2 4.2 2.4
Arizona 7.2 -6.1 3.5 -5.9
Clover Farms 4.1 -12.3 2.6 -10.4
Swiss Premium 3.6 -9.8 3.1 -18.7
Rosenberger’s Dairies 3.3 24.7 2.4 21.9
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart,for the 52-week period ending October 2, 2005.
SOURCE: Information Resources Inc.
By holding the line and not raising prices too drastically, organic juice companies have been able to “narrow the gap” between the cost of premium conventional juice and organic juice. As a result, Heilmann says, those consumers who had been tempted to try organic but were turned off by the price are now more willing to give it a try.
“When that gap shrinks, it always stimulates our growth,” Heilmann says, adding that Organic Valley has experienced 30 percent increase in juice sales over the past year.
Recognizing the growing demand for organic products, Apple & Eve is preparing for a line extension on its Organics line, which is currently available in Apple, Cranberry Blueberry, Peach Mango and Vintage Concord, along with Lemonade and Green Tea Lemonade.
According to Damiano, the company has moved beyond the upscale organic class of trade and is now doing a “very healthy business” with its traditional supermarket customers. Apple & Eve is also preparing to unveil a new package, designed to appeal to kids and adults alike.
“A lot of the young moms who are coming into the juice segment are being much more discriminating in terms of the products they are buying for their kids,” Damiano says. “They were already buying into the 100 percent juice position, but now they are looking for the next healthy choice, which is 100 percent juice organics.”
Langer Juice Co., City of Industry, Calif., is also openly targeting kids and moms with its new organic line, dubbed Fragile Planet. Initially available in two varieties — Apple and Concord Grape — Fragile Planet will be sold in 32- and 64-ounce  containers.
Langer has also unveiled new packaging for its frozen juices. The company’s new 11.5-ounce clear octagonal plastic container offers several advantages over paper composite cans; in addition to being microwaveable, it’s also resealable, allowing the consumer to make something less than a 48-ounce pitcher of juice.
Company president Bruce Langer is also completely sold on pomegranate juice, which he says is “on fire” and “bringing a lot of people into juice.” The company sells 100 percent pomegranate product, dubbed All-Pomegranate; several blended cocktails; and Diet Pomegranate sweetened with Splenda. Despite the demise of the low-carb craze, Langer says demand for reduced-sugar products still runs high.
Apple & Eve is also keeping a watchful eye on the trend toward more exotic fruit juices.  In addition to pomegranate, he cites Acai, an Amazon berry, as an emerging fruit juice.
Continued fortification remains high on consumers’ wish lists, according to Richard Ross, senior director for marketing at Chicago-based Tampico Beverages. The company is launching Tampico Plus, the first nationally distributed reduced-sugar refrigerated juice drink that’s calcium-fortified and enriched with vitamins A, C, D and E.
Tampico has  embraced Hispanic-influenced flavors in its Tampico Plus line: Citrus, Mango, Kiwi Strawberry and Tropical. Also planned for 2006 is Tampico Light, a new line of zero-calorie fruit-flavored drinks. According to Ross, the health proposition is going to help grow juice sales.
“Everybody is looking to feel better, and people look at juices and drinks as great healthy alternatives to sugary soft drinks,”  he says. “Juices have always had an aura of health around them, so the fact that you can use them as a delivery vehicle for additional fortification is just a plus.”
Julie Cook Ramirez is a freelance journalist based in the Chicago area.
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