Co-op going offshore for citrus: Sunkist to be year-round supplier

Sunkist Growers, the nation's largest citrus marketing cooperative, is borrowing a page from the California stone fruit industry, and is becoming a year-round supplier of citrus.

That means the famous Sunkist stamp will soon appear on citrus produced outside the U.S.

Several years ago California grape and stone fruit packers began importing peaches, nectarines, table grapes and plums from Chile to supply American consumers with fresh fruit in the wintertime. By providing fresh fruit year around, stone fruit maintains year-round presence in supermarket produce sections.

In approving the exporting of foreign citrus by Sunkist, the cooperative's board of directors believes the exports will complement the citrus produced by Sunkist's 6,000 grower-owners in California and Arizona.

“Today's marketplace is global,” said Jeff Gargiulo, Sunkist president and CEO. “U.S. politics promote it; economists support it; retail customers demand it; and consumers want great citrus, year round.

“Today, almost half the produce sold in the United States is grown outside our borders. American producers have increasing competition as our government opens the U.S. market to imports.”

With today's retail trade market consolidating, Gargiulo said Sunkist's largest customers are demanding a single, year round supplier for the citrus category.

“Our customers tell us they are going to buy the best product for the best price, and they don't care where it comes from. Large international retailers require a comprehensive package of services. To increase efficiency, they are asking Sunkist and their other suppliers to become ‘category managers,’ able to meet the retailer's entire needs for a specific product area.”

As a cooperative's president, Gargiulo's charge has been to sell the fruit members grow. “In the long term, however, we need to insure that we have the opportunity to sell their fruit in the future.”

Buy elsewhere for Wal-Mart

At Sunkist's annual meeting earlier this year, members learned that for the first time Sunkist had has purchased oranges from Florida and limes form Mexico to meet demands from one of its largest customers, Wal-Mart.

Sunkist is expanding its process business as well, supplying California orange juice for the Florida Natural Brand and lemon juice to Coca Cola.

Sunkist is now formulating the operational structure and exploring many different options for offshore sourcing. The final organization could involve export companies, partnerships or licensing agreements. The cooperative probably will not have the same arrangements in all countries.

“The added dimension of marketing citrus grown offshore is being pursued in a carefully-reasoned and researched manner,” said Gargiulo. “The Sunkist name, for instance, is still highly regarded in Europe although we haven't sold citrus there for many years because of the European Community's discriminatory tariff practices and the high cost of transportation. Soon we will be in a position to outsource fruit into that market under the famous Sunkist name and to overcome those obstacles.”

“The key to our future lies in the broad base of our marketing strength and our ability to be the kind of supplier with the kinds of services that today's retailers need. In addition, we have the strength of our brand name, which denotes quality, value, health and safety to consumers worldwide,” Gargiulo added.

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