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TOUGH
TIMES FOR
AUSSIE
GROWERS
Key acquisitions in the global beverage market
ALSO IN THIS ISSUE • Latest research • USA market • FCOJ futures
Fruit Juice FOCUS • March/April 2020 1
2 Fruit Juice FOCUS • March/April 2020
CONTENTS
04
04 USA market
14 18
06 News briefs
14 Australia
18 Drink acquisitions
20 FCOJ futures
24
21 AJC report
22 Crop round-up
Welcome to the March/April issue of Fruit Juice Focus. The juice industry needs to seek positive role
models to stand up for it. I’m starting to feel that juice is having a similar dilemma to the dairy industry
- the negatives out there are more readily available than the positives in the press and that’s got to
change. A small reprieve for dairy has come in the form of bad press for plant milk production and the
environmental effects, one headline from a Guardian reader made me smile - “so what are we supposed to drink now?”
Good point. Consumers are looking for new, functional, and often an ethical slant. You can create that perfect blend
- no animals involved - no deforestation - you have more control than you realise and the opportunity to create the
best back story. Watch out for Coca-Cola, who talk about ‘category blurring’ for the drinks industry, the company
aims to achieve ‘speed-to-market through leveraging an agile, test-and-learn launch model’, it has been reported.
Enjoy the issue.
Caroline Calder, Editor, Fruit Juice Focus
If you have any comments or feature suggestions
for future editions please contact me any time at From the publishers of:
caroline@fruitjuicefocus.com
According to the latest data from Decline of traditional juice start ups - that are succeeding in the
food and beverage consultancy sales fresh/premium/organic/natural juice
Zenith Global, fruit juice accounted space. Examples of premium brands
Whilst both volume and value have
for 7.8% of total soft drinks market include Suja, Evolution and Vive.
been in decline for a number of
in the US in 2019, the third-largest years, this began to slow in 2019, Within fruit juice the mainstream
category behind carbonated soft thanks, in part, to a shift towards segment is dominant with the
drinks (CSDs) and sports drinks. The premiumisation in the chilled 100% highest number of brands occupying
volume fell in 2019 by 3.3% to reach juice segment. American consumers this space. It is a mature market
6.1 billion litres. do like their juice and, where the offer where, in some cases, there is little
is fresh, clean, chilled, with innovative differentiation across mainstream
Traditional orange juice in particular
flavour combinations, they are willing brands in terms of innovation and
has suffered as a result of changing
to pay a premium price. relatively low consumer loyalty. The
consumer habits. Household
market leaders remain those of the
consumption of orange juice has fallen
big soda brands, Tropicana, Naked
over the last 20 years, from three (both PepsiCo) and Minute Maid
Mature market with premium
quarters of all American households (Coca-Cola).
to just two thirds purchasing often or
products holding up
sometimes in 2019. At the premium end of the category, Private label is also significant in
smaller convenience packaged brands the US, for example in Walmart it is
In value terms, fruit juice occupied are positioned at an average price of branded under the Great Value label
second place in the soft drinks market USD6.20 per litre. This positioning is and retails at around USD1.25 per litre.
at USD15.8 billion by the end of 2019, not the exception, as there are many This is significantly lower than other
a decline of -2.9% on previous year innovative 100% juice brands - from economy brands such as Welch’s at an
performance. global manufacturers to small batch average of USD1.69 per litre.
21.1%
6.3%
56.7%
7.8%
8.1%
CSD Sports drinks Fruit juice RTD tea Other soft drinks
6,800
New innovations driving 6,600
interest 6,400
Back in 2015, Cold Press and High-
6,200
Pressure Processing (HPP) juices
began growing in popularity, driving 6,000
interest in a category in freefall and
5,800
bringing new consumers to the chilled
juice aisle. 100% chilled fruit juice 5,600
is the observed ‘sweet spot’ in the 5,400
wider fruit juice, nectars and fruit 2017 2018 2019 2020f 2021f 2022f
drinks (FJNFD) market, all of which are
forecasted to post a slow decline in
consumption towards 2022.
Despite the last few years of decline,
fruit juice is showing signs of slow for a variety of reasons: juice is no Americans like juice but they
recovery, however, brands have longer part of the breakfast occasion, want innovation
been slow to respond to consumers with modern families foregoing
The volume losses seen in fruit juice
concerns about the sugar content traditional at-home breakfasts; the over recent years are forecast to
in fruit juice, although in most cases extensive functional and healthful slow, with the percentage of decline
this is natural sugar rather than added beverage choices available; price contracting year on year as the
sugar. rises on raw orange juice; traditional category starts to address the issues
juice consumers changing with rapidly around its negative image. Zenith
evolving dietary needs. These cited Global identified that flavours (including
Health concerns and changing reasons could post an opportunity, taste fusions, experimental ingredients
consumer habits as American consumers like the and superfruits), functionality, organic
A number of other factors have led functional benefits of juice and there credentials and premium positioning
to falling sales in the US. Consumers are multiple consumption occasions are all key trends to explore for
reported purchasing less fruit juice to tap into outside of breakfast. producers looking to gain ground.
This may be taken a step further in the UK as Public ten were unaware that there are no preservatives in
Health England proposes to include the sugars in 100% fruit juice.
pureed fruit, vegetable and legume products as free
fruitjuicematters
sugars, such as smooth vegetable soups, hummus,
extruded fruits, and tomato puree. The revised Nutrient
Profiling Model would also label 100% fruit juice as ‘high
fat, salt, sugar’ and restrict its advertising. Yet, 100%
CORONA VIRUS UPDATE
fruit juice still sits within the Eatwell Guide as a portion
of fruit, which could lead to some confusion. Fundecitrus and the organization of the International
Citrus Mechanical Harvesting Workshop announced
Misconceptions about 100% fruit juice may also that, due to the worsening of the spread of Covid-19
influence HCPs’ views, as more than a third of people in Brazil and in several countries in the world and the
surveyed were uncertain or disbelieved that 100% recommendation by the epidemiological authorities
orange juice means that the only ingredient is orange to avoid agglomerations to prevent this disease, the
juice. Around a half believed wrongly that sugar had workshop planned for end of March was postponed to
been added, or were unsure, while just under seven in the second half of 2020.
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30108
TOUGH TIMES...
for Aussie growers
Problems down under continue to put pressure on juice industry while
leading businesses are urged to innovate to keep pace with changing
consumer tastes. One report says that poor prices could mean an end of
fresh Australian orange juice in five years, writes FJF.
It’s not just adverse weather due to seasonal conditions. CEO crop.” Mr Hancock said growing juice
that’s affecting Australia – frosts, Nathan Hancock says prices paid fruit is unprofitable based on current
bushfires, water, the citrus industry for fresh juice by supermarkets to rates, which barely cover the cost to
is suffering from an onslaught of juice companies does not reflect the grow the fruit.
issues that are making life tough. seasonal environmental impacts of
The domestic citrus crop will be way frost and drought on the 2019/20
down in volumes, farming is proving Valencia crop. Operating environment
a tough livelihood for growers with
“This limits the amount of money that Operators in the Fruit Juice Drink
rising costs, and to top it consumer
juice processors can pay growers, Manufacturing industry have faced a
demands are changing dramatically
which will exacerbate the long-term difficult trading environment over the
which makes juice staples less
decline in juice variety production,” Mr past five years, according to analysts
attractive to younger consumers as
Hancock said. IbisWorld.
they look at alternatives.
“The juice growing industry is under Strong competition, both internally
immense pressure and Australian from private labels and externally
Weather issues consumers may not have access to from other beverages, has negatively
fresh Australian orange juice in as little affected industry revenue. In addition,
Citrus Australia, the industry body
as five years. slow growth in household disposable
representing the nation’s commercial
citrus growers, says major retailers “The high cost of water and low income has caused consumer
must lift prices to juice growers, who returns for juicing oranges mean less preferences to shift to cheaper
are facing a decline in production incentive to irrigate and maintain the alternatives over the period.
opting for more premium chilled have been pressed or crushed, and
Look to innovation products. Looking further ahead, unique juice blends, many of which
The Australian Beverages Council is the expectation is that growth will include coconut water. Some producers
positive about the industry and sees remain modest across the category have also branched out into other
premium products as key to success with the greatest promise of better categories, such as non-dairy yoghurt
going forward. Since 2008, chilled margins and sales in premium lines. and sparkling juices or flavoured
juice has been increasing in market Clearly this will be contingent upon waters.
value at the expense of ambient juice, the local supply of fruit regaining some
Just recently, market research on
certainty over the forward horizon,
growing in value by more than AUD140 Australian fruit juice suggested
comments the Council.
million. While the overall value of millennials and families with young
the juice market has been declining Some of the premium lines introduced children are key targets for premium
since 2011, forecasts indicate value by Members of Juice Australia include juice products. The report found
losses will slow and value should combinations of fruit and vegetable millennials perceive juice consumption
peak this year due to consumers juices, greater density juices which as an indulgence, while families with
Figure 2. Global food and drink acquisitions over USD1 billion 2014-19
Source: Zenith Global
40
35
33
30 28
27
24
22
20
10
0
2014 2015 2016 2017 2018 2019
biggest increases
TOP BUYERS
FCOJ futures have had a relatively this highlights the problems with the lower that the current levels. But
wild ride in the last few weeks. market right now. there is no real reason for any kind of
Prices went above 102.00 May for a major up move in futures to develop
There are plenty of Oranges in Florida
the first time since the beginning anytime soon. The best the market
right now for making FCOJ. The can hope for is a choppy and sideways
of the year in February and acted
crop is still being harvested but all trade rather than a V bottom and a
ready to move higher and perhaps
reports indicate that a bumper crop big move from here. We will need to
significantly higher. Then, prices
has arrived. There are reports of absorb the harvest before any kind of a
stalled and futures moved back
some production problems this year major rally can even be contemplated.
down into the trading range between
in Mexico from earlier dryness, but The amount of FCOJ made from the
98.00 and 102.00 for a few weeks
Brazil’s crops are looking good and will current crop plus imports will go a long
before dropping below support and
offer plenty of competition for sales way to deciding the longer term upside
testing down to 92.15 May. Then the
abroad and here at home. price potential. For now one would
Coronavirus hit and futures went
On the demand side, the Coronavirus think that the price rally potential is
back up to the range. Now prices are
rather slim.
fading lower again. makes transportation that much more
difficult. The workers on the ships
It has been quite a ride and it is
could carry the disease and people
somewhat disappointing that the
with the disease or even virus free About the author
onslaught of the Coronavirus has not Jack Scoville is a futures market
are not going out too much. So, the
really produced more demand for analyst specializing in grains, softs,
demand might crop due to the virus rice, oilseeds, and tropical products
FCOJ in the American market. After
instead of increase. such as coffee and sugar. He offers
all, Americans should want to try to
brokerage services to an international
prevent getting the virus and one FCJ futures can hold in the 90’s for the clientele of agricultural producers,
way to do that is by drinking a glass of foreseeable future either way. Prices processors, exporters, and other
Orange Juice each morning. But the might be cheap enough although professional traders.
demand bump has been minimal and historically prices have been even
China vs Europe
The recovery for January was driven by large quanties
of imports from China, up 827% from the prior year.
Europe was down 66% from the prior year. This reflects
the continued shift from a year ago when Europe was
the dominant supplier. Turkey leads the way for Europe, South America
providing 48% of this month’s total. South America is up 37% over last year in this first month.
Figure 2. US AJC Imports from China monthly Figure 5. US AJC Imports from South America
monthly
800000
600000
500000
The 2019/2020 orange crop forecast update for São
400000
Paulo and Triângulo Mineiro/Southwest Minas Gerais
citrus belt is 384.87 million boxes (40.8kg). This figure
300000
Source: WAPA
International conference
on the development of
local associations and
professional bodies
Baku, Azerbaijan • 18th February
MARCH 2018
IN THIS ISSUE:
ORANGE JUICE remains at 500 000 boxes.
ORANGE JUICE The forecast of Valencia
USA production is
The 2017/18 orange down 1.00 million boxes
crop in Brazil at 26.0 million
lasted longer than usual, The USDA’s current boxes. Current fruit
but it is now forecast on size is below
almost finished. Florida’s 2017/18 orange average and is projecte
crop is 45.0 d to be below
million boxes, down 1.00 average at harvest. Current
million boxes droppage
from the previous report. is above the maximu
APPLE JUICE If realised, m and projected
this would be 35% to be above the maximu
Industry sources predict lower than last m at harvest.
that Poland will season’s production.
produce no more than
160 000 tonnes of
For the previous
apple concentrate this 10 seasons, the Februar
season. y forecast Industry opinion
has deviated from final
production by
an average of 5%, with Going into the second
GRAPEFRUIT JUICE four seasons half of the
above and six below, season the drop rate
with differences for Valencia
There are a few processo fruit seems to have
rs in Flroida ranging from 16% stabilized, so
still running small volumes, below to 10%
but all plants above. the one million-box
should be closed by 15 cut to Valencia
March. production instead
The forecast for of the early-
non-Valencia midseason fruit was
production is unchang a surprise to the
LEMON JUICE ed at 19.0 million industry. Analysts suspect
boxes. Size and drop that it is
The availability of concentr components the smaller-than-av
ate in Ar- were final last month erage Valencia
gentina is extremely with sizing below
limited, but there fruit sizing that prompte
are sporadic offers on average, requiring 286 d the USDA
the spot market pieces of fruit to adjust the figure downwa
ahead of the new crop
there. to fill a 90lb box, and rd. Some
droppage above industry sources in Florida
the maximum at 62%. say they
do not expect the crop
GRAPE JUICE The Navel forecast, size to decline
included in the further, others meanwh
The 2018 winter grape non-Valencia portion ile, cite the old
crop in Argentina of the forecast, adage in Florida that
is now underway - says, ‘a small
the recent heavy
rains are not expected
to have an
impact on either volume
or quality. 250
PINEAPPLE JUICE
FCOJ FUTURES 190.30
Growing conditions for 21 MAR 2017
the Thai Summer 200
crop have been favourab 225.85
le and there 02 NOV 2016
is expected to be sufficient
supplies to
meet demand.
150
MANGO JUICE
European traders say
that there are
definite signs the market 100
has picked up
over the past month.
105.35
PASSION FRUIT JUICE 50 02 OCT 2015 131.40
21 JUN 2017
Producers in Ecuador
say the climate
there has changed significan
Juice Market is a monthly report covering the fruit juice concentrate market, it includes data, news and
market reports to help producers and buyers make informed decisions.
The IFU will hold its Regional Juice Conference in Stellenbosch/Cape Town,
South Africa. The conference will be held in conjunction with the South
African Fruit Juice Association (SAFJA) and combined with their annual
meetings. Looking at the global juice market and trends, South African juice
market, and supply chain, quality & technology, health & sustainability.
Tel: +44 (0) 7496 155650
E: dominique@ifu-fruitjuice.com
www.ifu-fruitjuice.com
Fruit Juice Focus encourages all country/region recognised juice associations to post events and news in this space
- the due date for editorial content for the May/June 2020 edition is the 1st May 2020
If your association wishes to submit any event details or news items please email caroline@fruitjuicefocus.com
INTERNATIONAL DENMARK
IFU. The International Fruit and Vegetable Juice Danish Fruit Juice and Jam Industries
Association 1787 Copenhagen V, Denmark
23, Boulevard des Capucines-F 75002 Paris, France Tel: +45 33 77 33 77; Fax: +45 33 77 34 20
Tel: +44 1934 627844 Mobile: +44 7850 910989 Email: gh@di.dk Web: www.foedevarer.di.dk
Email: john@ifu-fruitjuice.com
Web: www.ifu-fruitjuice.com FINLAND
Finnish Fruit & Vegetables Industries’ Association
SGF International e.V.
PO Box 115, Pasilankatu 2, 00241, Helsinki, Finland
Am Hahnenbusch 14b, 55268 Nieder-Olm, Germany
Tel: +358 914 88 72 28; Fax: +358 914 88 72 01
Tel: +49 6136 9228 12
Email: elisa.piesala@etl.fi Web: www.etl.fi
Email: info@sgf.org Web: www.sgf.org
FRANCE
EUROPE UNIJUS - Union Nationale des Producteurs de Jus de
The European Fruit Juice Association
Fruits
AIJN Secretariat, Rue de la Loi 221 box 5, B-1040
Boulevard des Capucines 23, 75002, Paris, France
Brussels, Belgium
Tel: +33 1 47 42 82 82; Fax: +33 1 47 42 82 81
Tel: +32 (0)2 235 06 20; Fax: +32 (0)2 282 94 20
Email: aroyant@unijus.org Web: www.jusdefruits.org
Email: aijn@aijn.org Web: www.aijn.org
GERMANY
AUSTRALIA The Association of the German Fruit Juice Industry (VdF)
Fruit Juice Australia (FJA)
Mainzer Straße 253, 53179, Bonn, Germany
Australian Beverages Council, ABN: 12 115 440 166
2/2 Allen Street, Waterloo, NSW 2017 Tel: +49 228 95 46 00; Fax: +49 228 954 60 30
Email: info@fruchtsaft.org
Tel: +61 2 9698 1122
Web: www.fruchtsaft.org
Email: info@australianbeverages.org
Web: www.fruitjuiceaustralia.org QJF. Quality Juice Foundation
Am Hahnenbusch 14b, 55268 Nieder-Olm, Germany
AUSTRIA Tel: +49 6136 9228 0
Verband der Fruchtsaft- und Fruchtsirupindustrie Email: info@qualityjuice.org
Association of Beverage Producers Austria, Web: www.qualityjuice.org
Zaunergasse 1-3, 1030 Wien, Austria
Tel: +43 (0) 1 713 15 05; Fax: +43 (0) 1 713 39 46 IRELAND
Email: getraenke@dielebensmittel.at Irish Beverage Council
Web: www.getraenkeverband.at/fruchtsaft 84/86 Lower Baggot Street, Dublin 2, Ireland
Tel: +353 1 6051622
BELGIUM Email: kevin.mcpartlan@ibec.ie
AJUNEC
Belgian Association of Producers, Bottlers and ITALY
Importers of Fruit juices and Fruit Drinks. A.I.I.P.A. – Associazione Italiana Industrie Prodotti
Rue de la Science 14, 1040 Brussels, Belgium Alimentari
Tel: +32 (0)2 550 17 57 Email: contact@ajunec.be Corso di Porta Nuova 34, 20121, Milano, Italy
Tel: +39 02 65 41 84; Fax: +39 02 65 48 22
BRAZIL Email: f.peron@aiipa.it Web: www.aiipa.it
CitrusBR – Brazilian Association of citrus exporters
Federvini
Rua Joaquim Floriano, 820 – room 193 – 04534-002 -
Via Mentana 2/B, 00185, Roma, Italy
São Paulo – SP – Brazil
Tel: +39 06 44 69 421; Fax: +39 06 49 41 566
Tel: +55 11 2769-1205 Email: citrusbr@citrusbr.com
Email: federvini@federvini.it
Web: www.citrusbr.com
Web: www.federvini.it
CHINA Conserve Italia Soc. Coop. Agricola
China Beverage Industry Association (CBIA) Via Paolo Poggi, 11, 40068, San Lozzaro Di Savena (Bo),
No.2C, Dongsanhuanbeilu, Chaoyang District, Beijing Italy
Tel : 86 10-84464668 Tel: +39 051 6228 495; Fax: +39 051 6228 540
Email: zyx@chinabeverage.org Email: gcapra@ccci.it Web: www.conserveitalia.it
Web: www.chinabeverage.org
If you would like your association listed here please email caroline@fruitjuicefocus.com
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