Claire H. Smith

Sunkist Citrus Juice and Oil Business on upswing with refocused sales strategies and modernized plants

August 23, 2006

August 23, 2006, Ontario and Tipton, Calif…..Western citrus is grown primarily for fresh fruit sales. For that reason California and Arizona are relatively minor suppliers in the international citrus juice business – dwarfed by the historic output of Brazil, Argentina and Florida. Sunkist Citrus Juice and Oil (CJ&O) business, however, has staked out a successful niche in its line of byproducts.

Sunkist Growers, the 113-year-old international citrus marketing cooperative, owns and operates two citrus processing facilities, which assure its grower-owners that all their fruit will be handled to advantage. Fruit that does not meet the high standards for the fresh market, finds a home in Tipton or Ontario, California.

"Sunkist has made great strides in reducing costs at the two plants while increasing revenues,” said Tim Lindgren, Sunkist Interim President and CEO. "with the credit due to Frank Bragg, Vice President, Citrus Juice and Oil Business and his team.

"In the last three years," Lindgren said, "$35 million worth of property was sold, the re-negotiation of long-term contracts generated $27 million in cash flow and $28 million was invested in the plants. Productivity increased 35%, workers compensation cost decreased 90%, orange processing is at record levels, juice quality is finest ever produced and food safety and sanitation audits are at all time highs." And for growers, fruit price averages are the highest in ten years.

“Not-from-concentrate (NFC) orange juice is a key market for Sunkist. We supply fresh quality juice to the major brands – with a west coast shipping advantage,” said Lindgren. To accommodate this sales stream, Sunkist made a significant investment in an aseptic tank farm four years ago at the Tipton plant that allows it to supply NFC to major customers on a year around basis.

Sunkist learned the value of utilizing the entire orange and lemon tree crop early in its organizational life. It didn’t take long to realize that fruit that did not meet higher “fresh” grade

Sunkist pioneered the concept of orange juice with its advertising campaign of “Drink an Orange” in 1916. Back when Sunkist was called the California Fruit Growers Exchange, a wholly-owned subsidiary was started in Ontario as the Exchange Orange Products Company. Marmalade was a by-popular product.

Today the Ontario facility is focused on processing lemon juices, oils and aromas with a production capacity of approximately 1,400 tons per day. A “best-in-class” lemon extraction unit was installed in June 2004 and a year later a new pulp cell recovery system was added. Lindgren explained that wastewater and stormwater handling systems were upgraded this year and he looks forward to installing a state-of-the-art lemon oil clarification system in the near future.

The orange and tangerine plant at Tipton in Central California has the capability of processing about 1,800 tons of fruit per day. In addition to the NFC storage upgrade, increased evaporation capacity and juice debittering and de-oiling systems have improved the value of that operation, said Lindgren. “Sunkist's Tipton facility has the most technologically advanced orange juice processing capability in the world,” he emphasized.

What does this mean to Sunkist grower-owners? Lindgren gives a three-pronged answer. “First, they enjoy income for their lowest grade fruit. Secondly, the entire crop is removed from the trees before another growing season begins. And finally, it allows packinghouses to immediately move the juice fruit from the end of the line so they can continue to pack the highest quality fruit coming in their front doors from the groves.

“Bottom line,” said Lindgren, “even though Sunkist is not a major juice player in the global sense, we are meeting goals to utilize member fruit at the highest margin. And we’re on track with our strategy to become the world’s leading supplier of value-added citrus products.”