Citrus Farmers Hope Crop Buries Bitter Memory of ’03
The last thing the citrus farmers assembled in Ventura needed to hear was another reminder about America’s love affair with high-protein, low-carbohydrate diets.
That’s just what they got from the senior vice president from Wal-Mart Stores Inc., who gave the keynote speech Wednesday at Sunkist Growers Inc.’s annual meeting.
“Five years ago, it was fruits and vegetables, five times a day -- but now it’s all bacon and eggs,” said Bruce Peterson, who heads Wal-Mart’s perishable-food division. And when people indulge, Peterson said, they tend to go for chips or cookies, not oranges.
Considering that Wal-Mart is the world’s biggest retailer and one of the biggest buyers of California oranges, grapefruits, lemons and limes, Peterson’s comments didn’t go down well. But members of the Sunkist cooperative had heard much of it before.
For citrus growers these days, “the competition is for share of stomach,” said Jeffrey Gargiulo, chief executive of the 110-year-old Sherman Oaks-based cooperative. Sunkist’s 6,500 members, who are primarily from California and Arizona, pay fees for rights to use the name and to cover marketing and advertising costs, and they share in the profits.
Orange farmers have been on the losing side of the competition for some time now. Americans eat about 12 pounds of fresh oranges annually, compared with 19 pounds in 1960, according to the U.S. Department of Agriculture. And as families increasingly spend more of their food budgets on prepared meals and dining out at restaurants, they spend less on basic meal ingredients such as fruit and produce.
Beyond that, Peterson pointed out, “maybe the customer doesn’t want to take the trouble” to peel a piece of fruit. It’s easier to open a bag of Doritos.
In Ventura, angst over the future of one of California’s hallmark industries was evident among the 700 growers and tradespeople braving a driving rain to attend the meeting at the Ventura County Fairgrounds.
“Last year’s crop was one of the worst in many years,” said Santa Paula lemon rancher Henry Vega. “We had a lot of crappy fruit. We were just able to cover the cost of picking and hauling the fruit and pruning the trees; that left nothing to pay for the ranch hand, or investment in the land, or even water and electricity.”
Sunkist members sold 575,000 tons of citrus last year, up 83% from 2002. Revenue fell to $744 million, a 7% decline. Exports were a 2003 bright spot, climbing 1.9% to a record $219 million, but domestic sales fell 10% to $525 million.
There are some signs that 2004 will be better. Mother Nature has helped out, producing what the ranchers believe will be a smaller volume of higher-quality fruit, a crop that should win higher prices at the market. Keith Neilmeier said he was excited by the quality and sugar levels (the higher the level, the sweeter the fruit) in the navel oranges that were being harvested on his 70-acre ranch near Fresno. The current crop, he said, “is very good.”
Beyond hoping for a sweet harvest, what else can Sunkist do? “There is a real opportunity in the health message for citrus and other produce,” CEO Gargiulo said. “We can’t stand back and watch other groups like the fad diets claim that message. We have some of the best-tasting product of any kind and it is good for you -- we have to find more creative ways to market it.”
Starting this week,the familiar blue-and-white Sunkist label will be visible for the first time on cartons of California-grown strawberries. The brand name is on about 600 products sold in 45 countries.
Whatever the strategy, Fresno farmer Neilmeier said, Sunkist had better get moving on it.
“We have to be available to move forward on these things, because if we don’t we will be left behind.”
