BRADENTON, Fla. (FNS) -- Tropicana announced that it intends to raise the wholesale prices of its orange juice products an average of 10% by the end of November, due to a significant reduction in Florida's orange crop.
Facing an estimated crop shortfall of 22%, Tropicana said its increase in wholesale prices would have a similar impact on retail prices, which are expected to increase 30 to 40 cents for 64-ounce cartons and 96-ounce plastic bottles of Tropicana Pure Premium.
Retailers contacted by SN said they are hard-pressed at this time to determine what impact the price hike will have on consumers' buying habits.
"It is hard, at this point, to speculate how consumers will react," said Shana Pritchett, spokeswoman for Dominick's Finer Foods, Northlake, Ill.
Some operators stated that consumers who buy on price alone will be most immediately affected.
"Consumers are seeing regular [orange juice] prices of $3.69 to $3.89. Most customers are used to buying Tropicana orange juice at $1.99 on promotion," said Andy Carrano, spokesman for A&P, Montvale, N.J. "The promo-driven customer could switch to an alternative form of juice, such as apple or cranberry, as promotional prices rise, but I feel that the everyday, shelf-price consumers will continue to buy the product."
Following the Oct. 9 release of U.S.D.A.'s crop estimates, Michael Sparks, Deputy Executive Director of the Florida Department of Citrus, said that the crop estimate for the coming season is 190 million boxes, down from last year's crop of 244 million boxes. A 20% downturn is also anticipated for the California citrus crop.
Florida's short-crop situation is blamed on El Nino-inspired heavy rains last spring, followed by a long dry spell this past summer. While there is a drop in crop size, the Florida crop is expected to be of better quality following five seasons of bumper crops.
"Tropicana is particularly hard hit by the smaller Florida crop," said Brian Cornell, senior vice president/general manager, explaining the wholesale price increase. Last year the company purchased 20% of the Florida crop.
The announcement comes at a critical time for orange juice manufacturers like Tropicana, which recently announced that not-from-concentrate juice sales had surpassed from-concentrate business for the first time ever.
NFC orange juice, according to IRI data cited by the company, now accounts for 50% of chilled, ready-to-serve grocery sales, while FC orange juice has declined to 49%.
At that time, Steve Bellach, director of Tropicana's Pure Premium, said the development bodes well for retailers, since NFC has always commanded a price premium to FC orange juice. "For the latest 52-week period ending Aug. 9, NFC was priced 75 cents higher per half gallon than FC. This translates to higher dollar rings," he said.