Contact: Claire H. Smith (818) 379-7455

Sunkist Growers 2002 The Year in Review

February 19, 2003

February 19, 2003, Visalia, Calif...At the 109th annual meeting of Sunkist Growers, grower-members and guests looked back at the successes and challenges of the 2001-02 season and forward to the dramatically changing marketplace.

2002 was a successful year for many Sunkist growers, with higher overall fresh fruit revenues and FOBs. It was also a year in which the marketplace spoke clearly about the direction for the future. Growers who produced what the market wanted -- good looking, good tasting, navels, lemons and minneolas for example -- fared well. But those who produced varieties out of favor with consumers -- such as grapefruit, Valencias and orlandos -- did not fare as well.

In 2002 Sunkist marketed 69 million cartons of fruit and generated the highest FOBs in history for a non-freeze year. In navels and lemons, the FOBs were the highest by quite a margin. In all varieties, nature provided a smaller volume crop of nice-looking, good tasting, right-sized fruit. Accurate volume projections helped in setting marketing plans and consistent strong demand drove sales at home and abroad.

The year started with a smaller-than-normal crop of excellent quality, very large-sized navels. The small crop and the quarantine-mandated absence of Spanish Clementines helped ensure consistent movement throughout the season. In addition, good planning and hard work by the sales team kept FOBs up all season long.

For lemon revenue generation, 2002 was Sunkist's best year on record. Short winter crops in Arizona, the California desert and the Central California growing area not only helped drive winter revenues and significantly higher FOBs, but also allowed a smooth transition to Southern California summer fruit. During the summer period, both volume and revenue increased from domestic sales and despite stiff competition from Chile in Japan, good export market information allowed Sunkist to manage the season to generate maximum revenues there also.

In the lemon market too, however, times are changing as the global market becomes much more competitive. Last year, Spanish lemon imports into the U.S. hit a million cartons for the first time and Chilean shipments also hit record levels. The Mediterranean countries are all back into full production. With the disarray in the European market, these producers will ship anywhere they believe they can get some FOB valuation. And they believe they can get it from the U.S. market.

The Valencia crop was an exception to the season's successes as domestic sales reflected the dynamics of the current marketplace. Valencias are becoming less a retail item and more an item for foodservice and wholesale. They also face increasing competition from Australian and South African navels as well as summer fruits and melons.

Despite the tough market, Valencia export sales went well through the end of June until the demand curve shifted, as it always does, to a larger piece of fruit which the southern hemisphere now grows and ships in increasing volumes and at lower prices than we do.

Grapefruit consumption continues to slide. Another double-digit decline saw Florida moving 15 percent less product domestically than the year before. As always, Florida's situation affects Sunkist, it's static supply leaving a shorter opportunity in which to move western product.

An important change in grapefruit movement, however, is the growing separation between the super-red varieties and the traditional ruby grapefruit. All the super-red varieties, especially the Stars, are proving more popular than the regular rubies and commanding significantly higher FOBs.

In export, the Japanese market built a huge backlog of Florida grapefruit and before it could be completely moved, South Africa delivered a million cartons to take its place. A bright light, however, is the resurgence of Sunkist's specialty grapefruit program with its rapidly building sales of Oroblancos, Melogolds and cocktail grapefrui



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