CITRUS INDUSTRY SQUEEZES OJ POTENTIAL

MATTHEW ENIS

LAKELAND, Fla. -- The Florida Department of Citrus this week will launch a turnkey fresh-squeezed orange juice program in an effort to provide the state's citrus growers with a new revenue source while creating a unique merchandising option for supermarkets. The fresh juice category grew 17% between 2002 and 2003, according to ACNielsen data provided by the FDOC. And, the organization said the perceived quality of fresh squeezed juice will offer retailers a profitable, cost-effective way to add excitement to their produce departments.

"The category has great margins, and there's an aura to it as [customers] come into a store," said Andrew Meadows, spokesman for the FDOC. "The fresh fruit on display is very visual, very positive. The sights and smells of these programs attract the same demographic as specialty coffee."

Several leading chains, such as San Antonio-based H.E. Butt Grocery, Austin, Texas-based Whole Foods Market and Schnuck Markets, St. Louis, offer their customers a selection of fresh-squeezed juices, and the FDOC said their program will provide other retailers with the tools needed to launch and grow the category in their stores.

The program, which will be unveiled at this week's Produce Marketing Association's Fresh Summit International in Anaheim, Calif., offers market research, a sales and profitability model and a category management study to help interested retailers select the best store locations for rollout. The FDOC also plans to help connect retailers with juicing equipment manufacturers, provide equipment usage and sanitation training for store personnel, inspection services for new retail installations and a launch plan that includes advertising, point-of-sale materials and sampling events.

"We'll also have a mock-up of the operation in Lakeland, Fla., where we'll be inviting retailers to learn about the program from beginning to end," said Meadows. The prototype should be up and running by Jan. 1, 2005.

The four hurricanes that have hit Florida since August have dealt a significant blow to the state's citrus crop. Conventional juice makers may still have sufficient stockpiles of frozen concentrate and chilled juice to avert a shortage of regular orange juice this season, but fresh oranges and grapefruit from the region are likely to be scarcer. However, Meadows said the fresh- squeezed program rollout would be geared toward retail launches during the 2005 to 2006 growing season. By then, supply is expected to return to normal.

The FDOC's stake in the revival of the fresh-squeezed juice category is grounded in providing its growers with a new source of profit. Currently, growers can sell their harvest either through the fresh fruit channel or to conventional juice-processing plants. Fresh fruit sales are the most profitable for growers, but only the highest quality fruit are picked for retail sale.

Pressured both by recent record-breaking harvests and sluggish sales of conventional orange juice due to the low-carb craze, prices paid to growers by conventional orange juice processors were down significantly before this year's hurricanes. With this program, the agency hopes to establish a third potential market for high-quality fruit that may have suffered "wind-scarring" or other common cosmetic damage.

Meadows said the fresh-squeezed channel had been an important revenue stream for growers in the early 1990s. But, when unpasteurized apple juice contaminated with E. coli caused 70 illnesses in 1996, the Food and Drug Administration began to work toward more rigorous regulation of all unpasteurized juices. With its higher acid content, orange juice is less likely to cultivate bacteria than apple juice, and Meadows emphasized there has never been an illness linked to citrus juice prepared on-site. But, concerned about store-level regulation, warning label requirements and potential liability, many retailers simply dropped their fresh-squeezed programs at the time.

Retailers who sell fresh-squeezed juice must meet state and local food-service health code requirements, and FDOC's program will offer training in sanitation standards.