There is never a good time for a weather-related crop loss, but the January ’07 citrus freeze was particularly disheartening for Sunkist.
The world’s largest citrus marketing cooperative based in California and owned by and operated for its 6,000 grower-members in California and Arizona was not only coming off its most successful year, but this season was shaping up to be an excellent follow-up season.
“The 2007 season was also off to a superb start, with crops of excellent quality and manageable size,” said Sunkist Board chairman Nick Bozick of Mecca, Calif. “Navel and lemon FOB averages were higher than at the same time in 2006 and sales of specialty varieties were on their way to beating the record set the year before,”
Then came the freeze.
Early estimates were that the volume available for the fresh market may be reduced by nearly 50 percent and the by-products volume by approximately 35 percent.
Fortunately, there growers were warned of a hard freeze and growers and packinghouses worked around the clock for a week or more harvesting and packing as much fruit as possible.
The industry is still evaluating the crop losses, however,
“We are finding that more fruit escaped severe damage than was at first though possible.
“Our attention is now focused on aggressively selling the fruit that remains, on maximizing returns to growers on the remaining fruit and on meeting the needs of our customers. We’re also working hard to get disaster relief for the growers, shippers, harvesters and packinghouse employees who have been severely affected,” said Bozick.
Sunkist president and CEO Tim Lindgren told grower at the citrus marketing cooperative’s 113th annual meeting recently 2006 was a record-breaking year.
Total revenues reached an all-time high of $1.1 billion dollars and a complex navel season was brought to a “remarkable conclusion. “Valencia growers enjoyed the best returns in more than a decade and lemon FOBs, already high, climbed higher,” he said.
Grapefruit growers enjoyed another year of high prices and sales of seasonal specialties topped all previous records.
“Sunkist’s citrus juice and oil business was established as the region’s most efficient high quality operator. Sunkist’s global reach continued gaining in strength as the cooperative marketed more than 600 different products in over 50 countries on five continents,” he said.
Last year’s Navel crop was exceedingly large – 90 million cartons industry-wide – and, as is usual when the fruit set is large, the fruit size was small. The per acre return difference between growers who had high per acre production and larger-sized fruit, versus those who did not, was substantial, said the Sunkist CEO.
Sunkist Valencia growers had the best seasons in a decade. “The crop was short, but Sunkist’s sales force had the tools to drive sales and maximize revenue. Excellent collaboration between Sunkist’s Citrus Juice and Oil Unit and fresh fruit sales provided a juice price floor that also helped boost per acre returns,” said Lindgren
Sunkist’s 2005-06 lemon revenues set an all-time record, despite the stiff competition from Mexico, Chile, Spain and Argentina. Before the freeze, Sunkist was already on track to duplicate last year’s performance in 2007. Now, with a reduced volume of fruit available driving substantially higher prices, those lemon growers whose orchards were not as hard hit by the cold will do very well, Lindgren predicted.
Grapefruit returns were excellent and Sunkist drove record revenues for seasonal specialties – almost $42 million, a 62 percent increase in two years.
“These citrus varieties – specialty oranges, specialty grapefruits, tangerines and tangelos – are in great demand and are an expanding part of Sunkist’s portfolio,” said Lindgren
In 2006, Sunkist Global LLC produced the best offshore selling season it’s had since the inception of the global sourcing program in 2003. Sunkist Global sourced fruit that filled specific customer needs, concentrating on fruit sourced from Australia and South Africa as well as limes from Mexico. Some domestically sourced fruit – grapefruit from Texas and non-member Clementines – are also handled under the global program. Much of the globally sourced fruit is sold in Southeast Asian markets although some is marketed in the U.S. and Canada.
“Sunkist is a leader in citrus category management and this service is considered by many to be the gold standard in produce,” said Lindgren.
In 2006 worldwide sales of Sunkist licensed products approached $1.4 billion. Overall sales of licensed products are up in every region – the U.S., Asia, Europe and the Middle East. Sunkist licensees introduced 46 new products in 2006.
“As we look to the next season and beyond, we will be working to refine and expand a new vision for the Sunkist of the future,” Lindgren concluded. “We will build on the tradition of the past 113 years – the highest quality production and presentation of the finest fresh citrus product available – while at the same time, we will challenge every aspect of Sunkist’s operation in order to implement the most effective and cost efficient support for bringing our growers fruit to market…increasing utilization, reducing assessments and increasing returns.”