US Orange-Juice Drinkers Vanish
Published on Dec 16 2014 9:25 PM in Drinks
Orange juice remains the most popular fruit beverage in the US. The problem is many Americans just don’t drink it anymore.
Annual consumption for a juice that became a US breakfast staple after World War II is now the lowest in at least 18 years. While smaller orange crops in Florida and Brazil have sent futures surging in the past month, sales of the top two brands, PepsiCo’s Tropicana and Coca Cola’s Minute Maid, have plunged in the past decade.
Demand has suffered as beverage choices increased, from diet sodas to sports drinks, and high sugar content has become a turnoff for calorie-conscious consumers, data from market researcher Euromonitor shows. Sales of bottled water topped all juices for the first time in 2007. The waning appeal of orange juice has limited the impact of a 55 per cent production decline since 2004 in Florida, the biggest US citrus grower.
“The trend is persistently downward,” said Lara Magnusen, a portfolio manager at La Jolla, California-based Altegris Investments Inc. which manages about $2.5 billion. Americans still drink more orange juice than people in any other country.
While orange juice accounted for about 60 per cent of US fruit-juice sales in the past decade, the market shrank 21 percent over that period, Euromonitor estimates. Since 2004, annual sales tumbled by a third at Tropicana to $1.4 billion last year, and Minute Maid dropped 27 per cent to $927.5 million.
Even as consumption drops, output is falling faster. Demand exceeded production for 10 years in Florida, where the crop slid 22 per cent last season to 104.6 million boxes, after drought and citrus greening disease hurt groves, US Department of Agriculture data show. A decade earlier, the harvest was 242 million boxes. A box weighs 90 pounds, or 41 kilograms.
The global harvest last season was 1.89 million metric tons, less than estimated demand of 1.96 million, USDA data show. Growers in Brazil, the biggest producer and top supplier of US imports, saw damage in trees because of an extended drought and high temperatures in the season that began 1 July, Cepea, a University of Sao Paulo research unit, said last month.
At the same time, producers are fighting to win customers. The Florida Department of Citrus will release 1 million comic books in US schools featuring Captain Citrus explaining the health benefits of orange juice, along with Marvel characters Iron Man, Thor, Black Widow and Captain America.
Such efforts may not be enough. Juices accounted for 11 per cent of global retail beverage volume in 2013, compared with 42 per cent for bottled water and 31 per cent for carbonated drinks including Coca-Cola, according to Ross Colbert, a New York-based global beverage strategist at Rabobank International.
Bloomberg News, edited by Hospitality Ireland