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JUICE

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04 JUICE CONSUMPTION

10 CIDER

16 TOMATO PRODUCTS

20 ORANGE JUICE

22 FRUIT SHORTAGE

CONTENTS / EDITORIAL

SEA CHANGEAre you worried about the decline in pure juice consumption? Perhaps you shouldn’t be.

There is a massive change affecting the entire fruit juice market. Companies in every sector are noticing the decline in pure juice consumption in the developed

market (chiefly the US and Europe). A couple of years, FOODNEWS wrote about it, under the headline ‘The Death Of Juice?’. Of course, what is happening is not the death of fruit juice at all, but merely its re-positioning and its penetration into new sectors.

Also, from being a product whose health-giving properties were completely taken for granted, juice has fallen foul of the same slurs levied against many soft drinks: it has a sugar content, which may be quite high in some juices.

In the rush to label fruit juice as a demon which contributes to obesity as well as tooth decay, the popular press and any number of television shows have conveniently forgotten the benefits of juice, and also dodged the question of excessive consumption, but that is another story.

If you look at the production and export figures for fruit juice, though, as much goes into the industry as ever – more, in some cases. It’s just that people are drinking less pure juice these days, and this is largely because there are many more choices of beverages competing for the ‘share of throat’.

So fruit juice is going into soft drinks. Carbonated drinks, still drinks, energy drinks, health drinks: more and more boast a sizeable juice component. And that is without considering the proposition offered by products such as PepsiCo’s Trop 50 which is (basically) a 50/50 blend of water and pure juice, although it would be interesting to see just how many consumers are unaware of this.

FOODNEWS thinks that one of the saviours of the presently stagnant juice markets, as highlighted by a recent Euromonitor presentation in the following pages, is super-premium juices: exotic blends, fruit/vegetable combinations, ‘green’ juices, and the like, especially those made by the HPP process, whose shelf life is gradually growing. Just two days after the Euromonitor article was put onto page there came news of another new such range in the US, this time from Evolution Fresh.

If pure juice volumes decline, but values increase dramatically, and more juice finds its way into the new generation of soft drinks and ‘healthy’ beverages, then the industry really does not have much to complain about. Business will go on, but it will simply be in a slightly different form. n

CONTENTS

Neil Murray Julian Gale Davide Ghilotti

Editor Neil MurrayEmail: [email protected]

Deputy Editor Julian GaleEmail: [email protected]

Specialist Reporters Davide GhilottiEmail: [email protected] RuibalEmail: [email protected]

Advertising sales Ben WatkinsEmail: [email protected]

Stuart VeldenEmail: [email protected]

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Lorena Ruibal


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On a global basis, the performance of the juice sector remains

strong, according to a recent conference presentation by Euromonitor. The sector saw 1.5% value growth in 2013 and 3% volume growth, and Euromonitor expects slightly better performance in 2014. It estimates the size of the category to be approaching USD150 billion in 2014, which equates to 76.5 bln litres of juice in total volume – including of both retail and foodservice sales, although roughly two-thirds of that market, in value terms, comes from the retail segment.

Euromonitor expects a global 2.7% CAGR in constant US dollars and a volume CAGR of 4% annually a stronger performance over the next five

years than the last five years for juice as a whole.

The market should rise to about USD167 bln in combined retail and foodservice sales by 2018, a quarter of which is likely to emerge from functional juices alone. This growth is going to come from many of the same places and sub-categories that succeeded over the recent review period. The two-track global market is going to continue to diverge.

In 2013, juice remained the third-largest category within soft drinks as a whole, when considered in terms of ready-to-drink volume. This ranking hasn’t changed recently, at least on a global basis, says Euromonitor and is unlikely to change in the near future.

The report, however, thinks

that RTD tea drinks, currently the fifth-largest category by volume, could overtake concentrates into fourth position on a global basis over the next five years.

Asian expansionAsia is now the main area of juice growth, led by low juice content juice drinks. Most of this growth emerges from China alone. With off-trade value sales nearing USD18 bln, juice is China’s most valuable soft drink category. As little as 10 years ago, juice trailed carbonates and RTD tea in value terms and accounted for less than USD3.6 bln in retail sales. Coca-Cola, thanks mainly to its popular Minute Maid Pulpy brand launched in 2005, helped develop the category and remains the retail value share leader today, despite a variety of newer,

True, juice consumption in the big markets is stagnant at best, but the market is moving towards even more premium (and valuable) products, while Asia drives traditional segment growth, as Euromonitor explains.

JUICE CONSUMPTION I JUICE 2015

BY NEIL MURRAY

IT’S NOT ALL BAD NEWS

A new functional market? Goodnight is made from valerian, lavender and rosehip and is claimed to be a “relaxation” drink that “naturally aids a better and deeper sleep experience”. At least one major airline is interested in offering it on night flights.



domestic juice drink brands. Latin America is also a robust

growth story over the last five years, led by nectars but with diverse growth prospects in low juice content drinks and 100% juice. Euromonitor has seen some trading up behaviour in the LatAm region, whereby consumers (particularly families with young children) trade up the value chain from powdered concentrates to ambient multi-serve nectars, which occupy a more affordable price point but offer more in the way of freshness and nutritional content.

The Middle East has been the value growth hub for 100% juices over the past five years, and also continues to grow sales of nectars. Total per capita volume consumption remains much higher in these regions presently, but the opportunities for revenue growth are now smaller and more niche, as consumer demand for juice is really segmenting. And there is still very strong demand for 100% juices in the Middle East, particularly the Gulf states, where there are powerful local brands and an increasing production capacity.

“The second story is a more negative one,” says Euromonitor, which is flat or negative value growth for the juice category over the last five years in North America and Western Europe, with no stand-out growth opportunity. In North America and large parts of western Europe, juice is having an “identity crisis”. Volumes are down for a variety of reasons and value growth is really minimal. Health trends and perceptions of what is fresh or natural are changing. This impacts not just juice but all packaged beverages. Carbonated drinks, even diet colas, with reduced sugar, have struggled over the same time period and in

the same mature regions while iced teas, energy drinks and sports drinks have outperformed.

“We’ve had five straight years of volume declines in sparkling or carbonates in the US, and many of the cola brands appear to have lost their ‘edge’ with consumers” says the report.

Over the past three years there have been production issues ad commodity pricing issues that impact the availability and price of juice to the consumer and are linked to retail performance. But Datamonitor argues that a lot of the change in behaviour, both positive and negative, is consumer-led.

Affordability of the product is probably the most fundamental. There is still a definite value chain in consumption of juice, beginning with concentrates at the most affordable price point for developing market consumers, climbing to low juice content drinks, then nectars, 100% juices and then a variety of super-premium, HPP or speciality food service products.

If a US consumer has an annual disposable income of around USD40,000, that works out to USD110 a day. As 100% juice is about USD2.30 per litre in the US, at retail, that works out to 2% of income per day. It is the same in Spain and across western Europe, where a litre of 100% juice is also about 2-3% of daily disposable incomes, despite income disparities.

In a high growth market for 100% juice like Saudi Arabia, that rises to 6%: more expensive but still affordable. However, the figure is 20% of daily income in China and about 23% in Brazil. And in India, it works out to more than half of daily disposable income.

This is part of the reason that lower fruit content juice are succeeding. It is a value proposition for consumers that

crave fruit drinks but cannot climb this value ladder.

Even in mature markets, super-premium 100% juices are trying to become more affordable and broaden their consumer base. Suja Elements, a new sub-brand from the growing Suja line of super-premium juices in the US is a good example. Suja built its brand on green juices intended for devoted lifestyle consumers. These were frequently sold direct in meal replacement sets. The new Elements line is still sold exclusively through the Whole Foods premium supermarket chain, but is priced a little more affordably. Even major manufacturers, like PepsiCo with Naked Green juices and the

Power Garden series, are showing more experimentation with natural ingredients and functional additives but staying relatively affordable to keep the mainstream consumer engaged and interested in the category.

The second issue involves taste and novelty. Regardless of five-a-day content or ingredients, juice is first and foremost a soft drink, and has to taste good to succeed. In the markets where juice is growing fastest, the branding and positioning are very flavour-driven, and increasingly reminiscent of other soft drinks on the shelf. New flavour combinations, local fruit flavours and textures are driving juice brands in emerging economies.

JUICE 2015 I JUICE CONSUMPTION

More juice is going into premium carbonated drinks – this is Uludag’s excellent lemonade, which has a much higher juice content than many products found in Europe.



Coca-Cola’s Minute Maid Pulpy beverage is a great example: a product that was wildly successful since launching in 2005 in China, because it entered the market with flavours and textures that appealed to a broad cross section of Chinese consumers.

The most successful juice products recently in China – such as the Crystal Sugar series from Master Kong and a variety of pear, goji berry and date flavoured juice drinks from domestic manufacturers – succeed first and foremost because they are new, and tasty. Importantly, they are competing for the same usage occasions and the same consumers as colas, waters and teas.

In Asia, the gap between spending on CSDs and juices is shrinking since 2003. By 2018, Euromonitor thinks that

advantage will be almost eroded. Juice will be on a par with CSDs in Asia in terms of annual consumers spending.

Even in mature markets where sales of 100% juice or lower juice content sales are not impressive in terms of growth, there is still demand for new fruit flavours in packaged drinks, and an emerging trend towards fruit juice as a natural sweetener in CSDs. Examples are fruit sweetened CSDs like Die Limo in Germany, from Eckes, or the Finley brand of fruit flavoured CSDs in France, released this year by Coca-Cola. There is also a variety of independent fruit flavoured sodas in North America.

Despite health trends, these fruit flavours are still appealing to consumers.

Then there is the issue of functionality, and juice can enjoy an advantage here over products

elsewhere in packaged drinks. Functional juice’s share has

doubled from 10% of global retail volume in 2003 to 20% in 2013. Over 30% of juice volume in Asia is positioned as functional. Juices with added ingredients for bone health or energy, with added probiotics – even salts or added electrolytes for hydration in warm climates – are drivers of the juice category in some markets.

The Chinese crystal pear juice product mentioned above succeeded because of new and interesting flavours, but also because it was positioned to alleviate congestion problems and winter cold symptoms. In many markets, seeing juice ingredients – honey being a great example in Asia and the Gulf states – are added to address specific ailments or wellness concerns.

So consumers expect more from their drinks today than ever before, and from their calories in general, and juice that can address functional needs can provide a convincing value proposition for the consumer.

Is it good for me?In 2013, Euromonitor conducted a global consumer trends survey that asked consumers: “What do you look for on labels?” It found that among US respondents, “limited sugar or no added sugar” was the number one thing looked for on food and beverage labels, followed by lack of corn syrup, all natural, claims and low calorie content.

Juice has a perception problem here. It is simply not the default health option. Two of the fastest-growing categories in the US are functional waters and teas, products that usually contain less sugar. Brands are being forced to justify their labels and educate their consumers about naturally occurring versus added fructose or naturally occurring alternative sweeteners like stevia versus high intensity synthetic alternatives that reduce the overall sugar count.

Major retailers are also taking more interest in expanding their healthier beverage options also, both to satisfy this new consumer demand and to align with more regulatory or public pressure to do so.

Natural sweeteners are not the only way to address this problem. Parents are diluting fruit juices for children. New brands in the past year have attempted to mix fruit juice concentrate with herbal teas, fruit teas or sparkling waters to appeal to health conscious parents and reduce sugar count on the label.

This is not a trend that is going away. But it is a trend allied with the final question: is it natural?

‘Natural’ is a trend with many interpretations from marketers


How to raise the profile of simple apple juice: Omi’s Apfelstrudel, from Austria, is NFC, has added cinnamon, can be drunk hot or cold, and boasts a premium price tag. In single-serve bottles.

Levy Group International 83 Avenue André Morizet, 92100 Boulogne (France )Tel : 33 1 46 03 82 44 Fax : 33 1 46 03 84 00

Email : [email protected]; [email protected]

We have audited and chosen the mostreliable suppliers of fruit juices and purees

from AFRICA, ARGENTINA, BRAZIL, CANADA, CHINA, COSTARICA, ECUADOR, FLORIDA, GERMANY, GREECE, INDIA,

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Levy Group International, 31 bis Rue des Longs-Prés, 92100 BOULOGNE ( France)Tel : 33 1 46 03 82 44Fax : 33 1 46 03 84 00



Levy Group International 83 Avenue André Morizet, 92100 Boulogne (France )Tel : 33 1 46 03 82 44 Fax : 33 1 46 03 84 00


We have audited and chosen the mostreliable suppliers of fruit juices and purees

from AFRICA, ARGENTINA, BRAZIL, CANADA, CHINA, COSTARICA, ECUADOR, FLORIDA, GERMANY, GREECE, INDIA,

INDONESIA, ISRAEL, ITALY, KENYA, MEXICO, PAKISTAN,PHILIPPINES, SPAIN, THAILAND, TURKEY ...

for their quality products and reliabilityfor their quality products and reliability

SELLING THE BEST TO THE BEST!

In France fruit juice means Levy Group InternationalMember of Unijus

COMPETITIVE PRICES - QUALITYSERVICE - RESPONSIBILITY

are key to the success ofLevy Group International,

the “Juice People” since 1973.

We sell only top quality raw materialsto the European fruit juice industry,from friendly and reliable producersto friendly and reliable customers

Levy Group International, 31 bis Rue des Longs-Prés, 92100 BOULOGNE ( France)Tel : 33 1 46 03 82 44Fax : 33 1 46 03 84 00





and from consumers, and so lots of confusion. There are indicators that suggest that this is an accelerating trend. It is no surprise that the super-premium segment in the US and western Europe, in particular, have outperformed the juices in other parts of the store. Likewise, the brands that have distribution in the ‘natural’ leading retailers in the US and Europe have outperformed those in mainstream supermarkets and hypermarkets.

Juice bars, unpackaged juices and juice prepared at home have a clear advantage in the ability to convey natural ingredients or authenticity. In the US, Euromonitor is still seeing growth in independent juice bars with a distinct premium focus, catering to lifestyle consumers with an interest in juicing or green juice as a meal replacement option. Over the same five-year period that packaged juice has declined in North America and western Europe, the unpackaged segment has exploded. Juice bars became a USD2.0 bln industry in North America in 2014 and are a USD500 mln segment in western Europe.

In these urban markets in North America or western Europe, premium independent, green juice bars are becoming extremely prevalent. Big chains like Jamba Juice are also making less investment in indulgent smoothie drinks, and more investment in whole juice products with natural ingredients.

At-home appliances like high end premium blenders are driving sales of the category.

Growth summaryLow juice content drinks are continuing to grow in China, emerging as one of the most popular options in all packaged beverages for consumers. They are growing faster than the carbonates sector. China will

account for much of the total global growth.

India is the leading growth market in percentage terms, but this is still from a very low base of consumption. Low juice content branded drinks, such as Maaza or Slice, aimed at younger adults, continue to see very strong growth with a particular interest in mango flavoured product development.

Saudi Arabia and the UAE are growing consumption extremely fast on a per capita basis and are actually on track to catch Europe and North America in terms of per capita 100% juice consumption by 2018.

So that’s another area to follow closely…

In North America and Western Europe, there will still be demand for high value juice in new formats.

Use occasions need to expand. The volume consumed in larger packages at the family breakfast table is likely to decline but single-serve, impulse drinks and higher value premium juices will be a greater growth opportunity.

There has been recent growth in smaller, under 500ml pack sizes (impulse packaging) in contrast to pronounced declines in the larger pack segments. “This is also behaviour we’d expect to continue” says Euromonitor. “The package itself is going to be hugely important, in all markets but particularly developed markets, not only because it showcases the freshness of the product but because consumers read labels more than ever before.

“The focus on smaller, better packaging is something we’ve observed in juice and across soft drink: personalised packaging, retro glass bottles, mini-cans in colas that emphasise portion control rather than changing formula. These can be relatively high unit price SKUs that succeed even while volumes overall decline.”

Impulse channels, as well as smaller, less traditional retail channels are going to be the profit centre for juice in developed markets. The small juice brands that are succeeding (and will continue to succeed) are finding their way into retailers with a reputation for healthier, or natural foods and beverages.

Super-premium private label products will emerge – indeed, they are already appearing in the US, where Trader Joes on the West Coast launched its own brand of premium cold press private label juices in the past year or so.

Coconut water is starting to compete directly as a natural alternative to sports drinks and isotonics – products like Lucozade or Powerade for gym goers and athletes. It is a good example of a juice product leaving the

breakfast table and encroaching on a new use occasion, a new time of day and new category in which to compete.

So finally, how is the juice category likely to be different at the end of the decade?

First, two-track development continues: juice is increasingly just another soft drink in the minds of many of its most important emerging market consumers. It competes successfully on flavour, hydration and function directly against carbonates, teas and water brands.

Juice brand managers will be forced to think more in terms of cola or sports drink marketers, particularly when it comes to reaching younger, trend conscious consumers in China and other high growth markets.

The retail environment for juice is going to fragment and change pretty dramatically in mature markets. Even today, in a traditional supermarket, there are successful points of sale (in coolers next to fresh produce) and lagging points of sale at the back of the store where juice presently gets a lot of shelf space that is going to be increasingly hard to justify.

On the other hand, premium juice is going to enter non-traditional environments that suit the new use occasions it needs to win: gyms, yoga clubs: places where it is easier to reach health-conscious shoppers.

And finally, Euromonitor is tipping super-premium juice products, saying there are going to be opportunities to bring the products into the mainstream. Big brands and big retailers are showing commitment to higher value juices, including in private label options in this space as well. High value juices are going to be key to maintaining pockets of revenue growth in otherwise slow volume markets of Europe and North America. n

“The retail environment for juice is going to fragment and change pretty dramatically in mature markets. Even today, in a traditional supermarket, there are successful points of sale (in coolers next to fresh produce) and lagging points of sale at the back of the store where juice presently gets a lot of shelf space that is going to be increasingly hard to justify.”



CIDER I JUICE 2015

The global cider industry is continuing to expand, and the

industry is sucking in ever-increasing volumes of AJC.

The largest markets in the world are in the UK and France, whose combined consumption outstrips practically all the other markets put together. Both countries have a long history of cider consumption and (perhaps oddly) the centres of the industry and consumption are geographically very close: south-western England for the UK and north-western France, separated only by a few dozen miles of sea.

Right now, everyone is watching the US market, because this is the one with the greatest potential. Australia and South Africa have thriving and fast-growing cider markets, but the US has its large population and extensive domestic apple and

apple juice industry to fuel it.The US market is growing so

fast that statistics are outdated almost as soon as they are published. US sources estimate it at 32 million gallons (about 125 million litres). Euromonitor estimates that by 2023 the market will be around 1.2 billion litres.

Rabobank thinks the global market is growing at a CAGR of 6%. According to The Beer Institute, a US industry group, the country’s cider market last year was about 690,000 (31 gallon) barrels, equivalent to 227 million 12oz bottles.

Exactly how much AJC goes into cider is unknown. Cider manufacturers would have one believe that all their products are made entirely from fantastically round, juicy rosy ripe apples, delivered to their plants by equally rosy-cheeked farmers. The truth is slightly more prosaic.

“They ought to show the raw material being delivered in tanker trucks,” said one caustic FOODNEWS source. In fact, some ciders contain virtually no apple juice at all – they are closer to alcopops in specification, with carbonated water, alcohol and flavourings combining to make the beverage.

However, a number of quality and traditional ciders have the variety of apples used in their manufacture proudly emblazoned on their advertisements and publicity material. They are unlikely to be completely made from a single apple variety, but it is important that they contain at least some of the specified apples, if only to conform to the laws governing advertising. This has opened the door to AJC made from single varietals.

FOODNEWS is aware that AJC makers are already shipping

such products to the manufacturers. This is an interesting niche market, and offers a better return for the AJC processor.

The UK, which accounts for at least half of global cider production, recently enacted legislation that decrees that cider (and perry) must contain a minimum of 35% apple juice. Artisanal ciders may contain much more. Ciders made in countries where such legislation does not exist may contain much less. Just about anything can be used in cider: flavourings, preservatives, other ingredients (such as other juices or flavourings, especially relevant in these days of raspberry, blackcurrant, or strawberry flavoured cider).

This is in stark contrast to (for example) the German Reinheitsgeböt, otherwise known as the German Beer Purity Law. This is a 15th century law decreeing that only water, barley and hops may be used in the brewing of beer, and it is still adhered to.

Australian legislators are aware of the flexibility in standards governing cider and are likely to impose ‘minimum fruit juice content’ standards in the near future.

As the industry has expanded, however, cider makers have made more use of AJC as the raw material. Added water is still a large component of cider (not least, because it is added to help control fermentation and thus alcohol levels).

FOODNEWS estimates that about 3.5 million tonnes of apples, or the equivalent thereof, worldwide, go to cider manufacture. That is equivalent to 500,000 tonnes of AJC, but obviously it is absolutely impossible to calculate how

While markets for most ‘major’ fruit juices are stagnating, this sector is booming and offers excellent long-term prospects.

BY NEIL MURRAY

CIDER INSIDER

Russia’s food import ban and the implications for the global food economyAn analysis of the new agrifood Cold War

This timely report examines all aspects of Russia’s move in early August 2014 to impose an embargo on imports of a wide variety of agri-food products from major western suppliers, notably the EU. It reviews what is at stake for both Russia and the EU, assessing whether, or to what extent, Europe can cope without its Russian exports, or whether Russia can get by without European agri-food products. As well as the immediate market implications, the report also takes a close look at the longer-term agri-political fall-out from the EU-Russian stand-off, and considers how Russia’s virtual full-stop on European imports is likely to affect the global geopolitics of food.

This RepoRT fRom AgRA euRope Will exploRe:

All aspects of Russia’s embargo on agri-food product imports from major western suppliersWhat are the consequences for Russia and the EUWhat is the long term agri-political fall-outHow the global geopolitics of food will be affected

This RepoRT Will help you undeRsTAnd:

All aspects of Russia’s embargo on agri-food product imports from major western suppliers

The consequences for Russia and the EU

The long term agri-political fall-out

How the global geopolitics of food will be affected

1

2

3

4

hoW To oRdeR… email: [email protected] Call: Shahid Qazi on +44 (0) 20 3377 3664

Russia’s Food Import Ban and the Implications for the Global Food EconomyAn Analysis of the New Agri-Food Cold War

REPORTS


Russia’s food import ban and the implications for the global food economyAn analysis of the new agrifood Cold War

This timely report examines all aspects of Russia’s move in early August 2014 to impose an embargo on imports of a wide variety of agri-food products from major western suppliers, notably the EU. It reviews what is at stake for both Russia and the EU, assessing whether, or to what extent, Europe can cope without its Russian exports, or whether Russia can get by without European agri-food products. As well as the immediate market implications, the report also takes a close look at the longer-term agri-political fall-out from the EU-Russian stand-off, and considers how Russia’s virtual full-stop on European imports is likely to affect the global geopolitics of food.

This RepoRT fRom AgRA euRope Will exploRe:

All aspects of Russia’s embargo on agri-food product imports from major western suppliersWhat are the consequences for Russia and the EUWhat is the long term agri-political fall-outHow the global geopolitics of food will be affected

This RepoRT Will help you undeRsTAnd:

All aspects of Russia’s embargo on agri-food product imports from major western suppliers

The consequences for Russia and the EU

The long term agri-political fall-out

How the global geopolitics of food will be affected

1

2

3

4

hoW To oRdeR… email: [email protected] Call: Shahid Qazi on +44 (0) 20 3377 3664

Russia’s Food Import Ban and the Implications for the Global Food EconomyAn Analysis of the New Agri-Food Cold War

REPORTS



CIDER I JUICE 2015

much of that raw material comprises AJC.

All FOODNEWS knows is that European, and to a much lesser extent, Latin American AJC manufacturers are shipping AJC to cider manufacturers in increasing volumes. For the Europeans, this is because cider manufacturers actually prefer slightly higher acid AJC, because it ferments better, and the fermentation is easier to control, than sweet juice. Chilean AJC, despite being low acid, also ferments better than equivalent acid Chinese AJC, for reasons that FOODNEWS doesn’t know!

The labelling requirements for cider are as flexible as the standards governing its manufacture. As with most alcoholic drinks, there is no legal requirement (in most major markets) to list the ingredients. From the point of view of AJC suppliers, this lessens the need for a tight specification for their products, since sweet AJC can be tempered with the addition of malic acid, and higher acid AJC can be tempered with sugar, although (as stated) it seems to be that cider makers prefer higher acid product anyway. But, and this is the crucial point, it doesn’t really matter if the AJC is cheap

enough. Even if it has to be blended, if the AJCs cheap, it’s worth doing.

If anything, FOODNEWS thinks that the forecast growth figures for the global cider industry, especially the North American industry, are understating the case. This is mainly because, since those forecasts were made, there have been some major developments not just in marketing, but also (crucially) in the legislation governing the tax rates for cider, and also how it may be sold.

Poland is the world’s second-largest producer of AJC, and yet the country makes hardly any cider worth mentioning. Why is this? It is partly because of the old Communist regime, which imposed strict controls on home production of alcohol, although (as in Russia) the law was more honoured in the breach than in the observance.

The law remained in place after democracy was restored, and cider was classed as a wine product, and advertisements of any alcoholic beverages other than beer were forbidden. It was only repealed in 2011, when Polish farmers were allowed to make up to 10,000 litres of alcoholic drinks annually.

Further to hobble the industry, excise duties on any product that had an alcohol content of more than 5% were the same as for wine, at PLN158 (USD42.44) per hectolitre. This was in line with an amendment introduced in December 2012, which aimed to be more favourable to producers of non-spirits, but many ciders remain slightly above the 5% alcohol level.

However, on January 1 2013, the Polish government reduced the tax to PLN97/hectolitre. The effect has been immediate, and Polish cider production (and consumption) is accelerating hard, though it still remains relatively small.

“In the first half of 2014, sales of cider were twice the volume for the entire year of 2013,” Michal Rozalicz, marketing director of the Ambra group, which produces Cydr Lubelski, told the Rzeczpospolita daily last year. Sales in 2014 are expected to be around 6.0 mln litres, three times as high as the volumes sold in the previous year. That is equivalent to around 400-500 tonnes of AJC (remember that few ciders are 100% apple juice), and of course fresh apples may form an important component of the raw

material, but it is a start.Cydr Ignacow reckons that

cider makers may consume about 15,000 tonnes of fruit in 2015, or less than 1% of the country’s output, based on the Polish Council of Winemaking estimates.

But what is really important is what is happening in the booming US market. First, individual states have started relaxing the rules governing (hard) cider production. This was not just to encourage the industry ,but also to establish cider farms on the tourist trail, rather in the way that wineries are in California.

In 2013, New York State governor Andrew Cuomo signed the Farm Cideries bill that established a new licence for farm cideries similar to licences already available to farm wineries, breweries, and distilleries. The state had already established licences for farm producers of wine, spirits and beer, but not for cider.

The Farm Cideries law authorised the establishment and licensure of farm cideries for the manufacture and sale of cider made from crops grown in New York. It also excluded licenced farm cideries from the requirement to file a sales-tax



JUICE 2015 I CIDER

information return. And the state voiced a belief that farm cideries will become “destination locations” that will promote tourism within their communities because, like farm wineries, they may also sell products such as mustards, sauces, jams, jellies, souvenirs, artwork, crafts and other gift items.

Kentucky enacted similar legislation in 2014. Individual states have also been revising their tax regimes for cider, an incredibly important point. In some states (Virginia, for example) cider with an ABV content of over 7% was classified as an apple wine, and thus more heavily taxed. Very recently, the CIDER Act, a federal law, passed the Senate Finance Committee and is now awaiting action on the Senate floor. This legislation amends the section of the Internal Revenue Code (26 USC Section 5041) to allow hard cider makers increased flexibility in their final product without the possibility of facing increased tax liability. Specifically, the legislation (1) increases the carbonation level for cider (really fizzy cider was previously classified as a sparkling wine, and taxed more

heavily) (2) includes pears in the definition of “hard cider,” so perry can be made as well, and (3) aligns the alcohol-content standard for cider with the natural sugar content of apples. The legislative changes made by the CIDER Act would ensure that cider is taxed consistently.

Basically, it lifts an entire industry into a more favourable tax structure. The federal tax on cider will fall to the same level as it is on beer, and cider with an ABV of over 7% will not be taxed at a higher rate. The ABV level for stronger cider is moved upwards to 8.5%.

“This is the first step in bringing reform to the existing laws governing the making of hard cider, which are outdated and hindering American competition in this industry,” commented the US Association of Cider Makers (USACM), the national trade association of the cider industry.

There are signs that Canada is following suit. Most recently of all, Ontario’s provincial government has freed up the laws governing sales of alcohol in the state, with beer now to be legally sold from supermarkets rather than dedicated alcoholic

drinks shops. The Ontario Craft Cider

Association (OCCA) is lobbying to have cider treated in the same way. At present, it is regulated as wine.

“Ontario Craft Cider is asking not to be left behind,” said Thomas Wilson, chairman of OCCA. “We have asked the province for equal footing with Ontario Craft Beer and VQA (the state’s wine authority), which have both been incubated by provincial programmes to grow their industries.

About 80% of ciders sold in the state are presently imported (2014) and Ontario has the largest apple industry in Canada. The drink is seen as offering a major boost to rural economies. Increasing quantities of local fruit, and apple juice, as well as imported apple concentrates, are being used in cider manufacture.

The effects of these changes (and there may be more to come) should not be under-estimated. What is more, they have come at exactly the same time as Europe, principally Poland, has re-entered the US AJC market in force. As before, it is very hard to calculate exactly how much AJC will be

sucked in by the growing cider industry in North America in the next few years, but it may be substantial, even allowing for the fact that large quantities of US-grown fresh apples may also be snapped up by cider makers.

Whether the raw material comes from AJC or from fresh fruit does not matter so much, in the processing connect, because whichever happens, it still impacts directly on the supply of processing apples in the US and in Europe.

Finally, it is worth considering that the established cider industry in the UK is used to taking a long-term view for its raw material supply. British cider makers frequently sign supply contracts for as long as five years with apple growers. FOODNEWS has been informed that some Polish suppliers to the US have been contracting for two years, for AJC destined for cider manufacture (as well as for possible use elsewhere, it must be admitted).

This market, long established in France and the UK, is going global and it will affect the global supply of AJC. In the meantime, let the good times roll. n



Headquartered in Singapore, Goodpack operates through a

global network of subsidiaries and regional offices in more than 70 countries. With over 3.2 million IBCs and more than 5,000 collection and delivery points, customers can hire and de-hire Goodpack IBCs practically anywhere in the world.

Versatile food-safe packagingThe Goodpack rental system is ideally suited to the food industry. Our IBCs have the strength of steel construction and the

flexibility of design to be used for a wide range of food products, including: aseptic banana puree, apple juice concentrate, frozen concentrated orange juice, aseptic single-strength orange juice, aseptic single-strength pineapple juice, aseptic pineapple juice concentrate, aseptic tomato paste and aseptic diced tomato.

The all-steel construction of Goodpack IBCs removes the need for fumigation and heat treatment, putting them in high demand with Food & Beverage customers. Problems related to wooden boxes such as mould, rotting wood, wood chips and other

HACCP-related issues are eliminated. Hygienic and food-safe, Goodpack IBCs are also functional in wet wash-down environments. They help customers meet certain environmental standards, such as ISPM 15 and ISO 14000.

Goodpack IBCs have a large capacity of 1.65 tons and can be fitted with a hygienic food-grade barrier or non-barrier plastic bladder. During unpacking, the IBCs can be rotated to empty the product; or the top of the bag can be cut open, allowing product to be pumped from the top, making them perfect for juices, concentrates and other food products.

Convenient and efficientGoodpack IBCs can be easily integrated into a customer’s supply chain system. The IBCs are made of galvanised steel and feature a convenient built-in pallet with four-way entry for forklift handling. They can be collapsed

within seconds to maximise warehouse space; and unlike wood and corrugated bins, they do not require structural strapping. The stackable, interlocking design when full or empty offers efficiency in storage, especially over drum containers. One IBC is equivalent to seven 200-litre drums, creating inherent efficiencies throughout the supply chain. Goodpack IBCs offer other advantages as well, including:

• Suitable for shipping in both dry and refrigerated 20-foot and 40-foot containers

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• Flexible and cost-efficient term and trip lease options

GOODPACK ADVERTORIAL I JUICE 2015

GOODPACK IBCs ARE CLEAN, LEAN AND GREENGoodpack owns and operates the world’s largest fleet of patented, steel Intermediate Bulk Containers (IBCs). This multimodal, reusable metal box system provides packaging, transporting and storage rental solutions to the Food & Beverage industry.

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Handling/Waste Disposal, etc.* 15% – 25%

Packaging 10% – 20%

*Labour savings/reduced manpower by using IBC



Reduces global supply chain costsFood & Beverage companies face issues such as increasing costs, a complex supply chain, changing consumer preferences, food safety and compliance. There is constant pressure to reduce operating costs, improve top line revenue, manage procurement volatility due to seasonality and better integrate planning and execution. Globally, companies want to make the supply chain cleaner and less cluttered, and are looking to pursue efficiency while simultaneously delivering better service and products to their customers.

The controlled and predictable costs of Goodpack IBCs make it easy for Food & Beverage manufacturers to plan and manage expenditures. Since Goodpack IBCs are hired on a rental basis and include door-to-door delivery and full track-and-trace capability, no capital outlay is needed.

“We have a structurally strong product; but more importantly, we help companies save costs through

our rental programme,” said George McFarlin, president of the Goodpack Global Food and Liquids Division. Because Goodpack owns and operates the world’s largest fleet of IBCs, this allows them to provide one-way trip rentals to most export destinations. Whereas with smaller suppliers, customers have to pay to return the IBCs to the country of origin.

Goodpack’s cost-effective bulk packaging gives customers a worry-free and standardised global supply chain solution. This provides a flexible planning system with real time visibility into the inventory status of both raw materials and finished goods, which enables businesses to minimise inventory and increase capacity utilisation.

The inherent inefficiencies of steel drums, such as the high cost of storage, disposal and transit, make Goodpack IBCs the perfect solution. Goodpack IBCs reduce labour costs for container handling, lower packaging and

shipping costs, minimise disposal costs and require less warehouse space.

Supports sustainabilityGlobally, there is an increasing trend toward environmentally-friendly products and more sustainable business processes. Compared to other conventional IBCs and drums, returnable Goodpack IBCs have the lowest environmental impact and lowest carbon footprint, which makes them a truly superior packaging solution. According to McFarlin: “Every year, the Goodpack IBC fleet saves the equivalent of over seven million trees from being harvested to make disposable IBCs.” Goodpack IBCs reduce the impact of expendable packaging and eliminate waste for a greener supply chain, helping Goodpack customers gain a competitive advantage.

The Goodpack model has shown that cost efficiency does not have to be achieved at the expense of sustainability. Goodpack offers a solution that satisfies today’s environmental concerns through:

• Waste minimisation (no bins, drums or pallets to dispose of)

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containers are collected and reused)

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“Reusing is a step ahead of recycling,” said McFarlin, highlighting that if both practices are aimed at reducing landfill waste, reusing containers also cuts down on the energy and water required for recycling. The life cycle of the IBC is much longer, since it can simply be used again and again. “Goodpack IBCs reduce the amount of solid waste, reduce water consumption and conserve energy in all facets of the supply chain.”

Goodpack’s partnership approachGoodpack takes pride in its partnership approach with customers, which enables them to bring value to customers’ operations and to grow with existing and new businesses in every part of the world. Used by top Fortune 500 Food & Beverage companies, Goodpack IBCs are the established and proven global standard.

For more information, visit: www.goodpack.com

JUICE 2015 I GOODPACK ADVERTORIAL



TOMATO PRODUCTS I JUICE 2015

At the same time, trying to analyse in depth this industry remains a

difficult task, due to the lack of complete and reliable data, scarce availability of directories and the very nature of the product. Tomato juice is employed horizontally in various segments of the food and beverage industry, which are difficult to compare.

In the midst of all this, this commodity expands its reach.

For the sake of clarity we should point out, first of all, that

most of the tomato juice available for sale and manufactured today on the wider market is made with tomato paste, to which water and seasoning are added.

A notable exception to this is Canada, where a specific law states that tomato juice produced in the country must be extracted from whole tomatoes, rather than tomato paste as is done in neighbouring US. This factor was crucial for the ultimate saving of the former Heinz plant in Leamington, Ontario, which was bought by a

consortium of investors and is currently producing – among other items – tomato juice for the domestic market.

Another point to make early on is that all the figures that FOODNEWS is considering in its analysis are for single-strength, or NFC juice, which is the premium product.

Tracking the use of tomato juice as a commodity/ingredient is a hard thing to do, as it ultimately comes down to companies’ proprietary information: volumes supplied to

firms for their own manufacturing operations, source of the material, country of origin and the like – all of this information is not in the public domain.

Some of the confusion regarding this product is the fact that, as not everyone may not be aware of, tomato juice is a fruit juice. Such confusion is understandable: it took 37 years for the EU to agree on this. At the time of the first Fruit Juice Directive, which was drawn up in 1975, tomato juice was left out, due to reticence on the part of

Still considered a niche and peripheral market by many, the tomato juice industry has been growing rapidly over the last few years, and is now becoming a point of focus of several companies’ research and development and product offering.

BY DAVIDE GHILOTTI

TOMATO JUICE: TODAY HERE, TOMORROW THE WORLD


SCP_half_page.indd 1 2015/05/06 9:30 AM



TOMATO PRODUCTS I JUICE 2015

some countries – namely, Italy and France – to agree on juice made with tomato paste.

The debate raged on for almost three decades until March 2012, when the authorities finally included tomato juice under the EU legislation aligning the Fruit Juice Directive with the Codex Alimentarius.

FOODNEWS reckons a focused look at the tomato juice industry to be worthwhile. A number of reasons drove our editorial choice here. For one, the sector is growing – in both traded volumes and sales or traded value. We see a potential growth of demand for tomato juice, related to the rise of the so-called

‘health-conscious consumers’, and the activity of related industries (alcoholic beverages, soft drinks, juice making). Lastly, we have identified, over years of coverage, a defining trend in companies’ R&D specifically in tomato juice.

Usage, production and analysis issuesTomato juice is a basic ingredient used for cooking, in alcoholic drinks and cocktails, soft drinks, in juice making. The rising demand for organic products is also to take into account when dealing with this commodity.

As it features in many culinary uses, tomato juice often

criss-crosses with other ingredients sub-sectors: salt, sugar, onion powder, garlic powder, herbs, spices, alcohol and others.

Tomato juice features in the larger tomato products family, which includes tomato paste, canned tomatoes (chopped/diced, peeled, crushed), passata, ketchup and sauces.

But how much tomato raw material is processed into juice? The answer is simply that we do not know. Many aspects of this industry are for still foggy and hinder detailed market analysis.

There is a lack of information on the industry itself, with missing data on production,

consumption, directories and lists of players. There is a clear lack of customs figures on imports and exports from notably important tomato products origins, such as Italy. Customs offices’ figures often clash or appear dubiously reliable.

Again, standards can vary widely from country to country, with some listing their tomato juice volumes in tonnes, others in short tons, and yet others in litres. Despite having its own commodity code (200950), tomato juice is often counted as part of other traded commodities in some countries (eg. Europe), or is simply not monitored.

Despite all this, we can extrapolate some meaningful trends with what little we do have at our disposal.

The tradeBetween 1994 and 2013, the value of global tomato juice exports rose from USD7.8 mln to USD69.4 mln, according to Customs/GTIS data. That was an increase of 789%. At the same time, the first 10 years under review are riddled with missing and incomplete data sets.

Still, taking a shorter time frame, between 2005 and 2013, shows that global tomato juice exports in value terms went from USD33.5 mln to USD69.4 mln, or +107%.

Even though the latter may be a pretty minor estimate compared with the first, the development here is clear.

Amon the main exporting countries we have, in order of appearance, the US, Ukraine, Italy, Germany, Spain and Canada, plus scores of other smaller origins.

Imports have fared in a similar way, rising from USD36.7 mln in 2004 to USD78.5 mln in 2013. Although, in an ideal, world total imports and exports should match, in reality there is a gap

Source: Customs Data

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

36,748,592 35,704,383

44,260,04847,586,830

61,082,648

74,536,440 73,501,041

71,795,39768,783,776

78,535,257

30,000

40,000

50,000

60,000

70,000

80,000


2005 2006 2007 2008 2009 2010 2011 2012 2013

33,509,171

45,536,23047,592,482

59,340,265

49,295,288

51,096,924

68,660,918

68,279,874

69,415,154VALUE GROWTH IN 2005-13:107%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Mex

ico UK

Russia

Belaru

s

Germ

any

Hong K

ong

Nether

lands

Japa

n

Fran

ce

Poland

Lithu

ania

Belgium

Denm

ark

Kazak

hstan

Hunga

ry

Singa

pore

Roman

ia

17,291,716

10,944,659

5,952,2074,886,525

3,563,4322,624,023

1,732,4451,111,395 953,434 953,434


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

36,748,592 35,704,383

44,260,04847,586,830

61,082,648

74,536,440 73,501,041

71,795,39768,783,776

78,535,257

30,000

40,000

50,000

60,000

70,000

80,000


2005 2006 2007 2008 2009 2010 2011 2012 2013

33,509,171

45,536,23047,592,482

59,340,265

49,295,288

51,096,924

68,660,918

68,279,874

69,415,154VALUE GROWTH IN 2005-13:107%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Mex

ico UK

Russia

Belaru

s

Germ

any

Hong K

ong

Nether

lands

Japa

n

Fran

ce

Poland

Lithu

ania

Belgium

Denm

ark

Kazak

hstan

Hunga

ry

Singa

pore

Roman

ia

17,291,716

10,944,659

5,952,2074,886,525

3,563,4322,624,023

1,732,4451,111,395 953,434 953,434

VALUE OF GLOBAL TOMATO JUICE EXPORTS (USD, 2005-13)

VALUE OF GLOBAL TOMATO JUICE EXPORTS (USD, 2004-13)



JUICE 2015 I TOMATO PRODUCTS

due to some data going missing and some other data being counted twice – at exit and entry. Customs figures also miss out any volumes that are bought and then re-exported to other countries, which goes again to explain the differing figures.

As of 2013, the largest destinations for tomato juice were led by Mexico (USD17.2 mln), followed by the UK (USD10.9 mln), Russia (USD6.0 mln), Belarus, Germany and others.

Consumption trends and new developmentsThe existing manufacturers and brands of tomato juice and related products are an unquantifiable number, ranging from big corporation to small firms. Campbell, RW Knudsen, BiosaborNature, V8, RedGold, Welch’s, Hirzel Canning Company, Sacramento, Hannaford, Kevian, Pomì, McCain, Lakewood, Heinz, Kagome, Del Monte – the list goes on and is expanding.

Firms are exploiting a number of drivers that are pushing upward consumer demand for tomato juice. The health factor is a primary example, with conscious consumers in

developed markets (UK and Europe, North America, Australia, Japan) looking for products with specific benefits to preserve and boost their health.

These chunks of the population are behind the rising demand for products that are perceived to be healthy, such as

tropical fruit, nuts and dried fruit, superfoods, berries, tomatoes.

Specifically to tomato products, the single biggest driver of health-related consumption is probably lycopene. A carotene and carotenoid, lycopene is found in tomatoes as well as other red fruits and vegetables (watermelon, red carrot, papaya). It gives the tomato its red colour, and has antioxidant and anti-inflammatory properties.

Research and studies carried out over the last decade have linked lycopene to, among others: reduction in heart disease risk, in risk of prostate cancer in men, obesity, prevention of type 2 diabetes, and as helpful in controlling blood pressure, prostate and pancreatic health.

The alcoholic drinks market is an additional primary driver of tomato juice demand. What we may call ‘the cocktail culture’ in developed markets, as well as other developing regions such as south-east Asia, requires high and steady supply of tomato juice as ingredient for cocktail blends. The UK has the classic Bloody Mary and scores of other cocktails with tomato juice. The US and Canada have what they call Calgary Red-Eye/Bloody

Beer/Red Beer (beer and tomato juice), which in Mexico goes under the name Cerveza Preparada or Michelada. There is also growing interest in red fruit for blends (cranberries/other berries, tomatoes).

The globalisation of culinary and drinking customs, migration trends and the ‘search for the exotic’ by consumers (particularly in developed markets) are making products such as these more popular by the day in places where they were unknown until not long ago.

Manufacturers have followed suit, devoting their research department to the designing of new products to satisfy demand in these markets.

In 2013 alone, Hirzel Canning Company & Farms (US) launched ready-to-drink Truly Tomato! Juice; Biosabor Nature SL (Spain) launched Cherry Organic Tomato Juice; Pomì (Italy) launched ready-to-drink tomato juice Pomì L+ Juice and Kagome (Japan) launched Tomash, a carbonated tomato beverage.

Similar developments can be seen in developing regions as well: in July 2014, Kevian Kenya announced it will invest in new production lines, including tomato juice.

All available data shows that the tomato juice industry has developed significantly over the last 10-20 years. To some extent, it is still a niche market, but we can see it is evolving rapidly. Tomato juice exports have doubled in eight years, reaching an overall turnover close to USD70 mln.

Growth of the sector is expected to continue, as demand for tomatoes and related products is on the rise due to consumer trends (health, cocktails, organic) and food diversification.

All seems well on the tomato juice front. Stay tuned. n


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

36,748,592 35,704,383

44,260,04847,586,830

61,082,648

74,536,440 73,501,041

71,795,39768,783,776

78,535,257

30,000

40,000

50,000

60,000

70,000

80,000


2005 2006 2007 2008 2009 2010 2011 2012 2013

33,509,171

45,536,23047,592,482

59,340,265

49,295,288

51,096,924

68,660,918

68,279,874

69,415,154VALUE GROWTH IN 2005-13:107%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Mex

ico UK

Russia

Belaru

s

Germ

any

Hong K

ong

Nether

lands

Japa

n

Fran

ce

Poland

Lithu

ania

Belgium

Denm

ark

Kazak

hstan

Hunga

ry

Singa

pore

Roman

ia

17,291,716

10,944,659

5,952,2074,886,525

3,563,4322,624,023

1,732,4451,111,395 953,434 953,434

LARGEST TOMATO JUICE IMPORTERS IN VALUE TERMS (USD, 2013)

“The alcoholic drinks market is an additional primary driver of tomato juice demand. What we may call ‘the cocktail culture’ in developed markets, as well as other developing regions such as south-east Asia, requires high and steady supply of tomato juice as ingredient for cocktail blends.”



The main problem affecting Brazil’s orange juice industry

(production and exports) is simply that the world has fallen out of love with orange juice as a product, with the notable exception of premium NFC juice. This is affecting everything.

The second problem is that of disease – greening is rampant, as it is in Florida, and is cutting production.

The third problem is that drought is having a severe effect on Brazilian orange juice production. The effects of last year’s drought on the 2015/16 citrus crop in São Paulo are still uncertain because of the differing states of orange groves across São Paulo, which makes it difficult to make a reliable prediction, Brazil’s Advanced Research Centre in Applied Economics (CEPEA) has warned.

In the south-west region (Avaré), drought-related damage has been minimal as rainfall in the summer was quite regular. As a result, citrus growers in this region can expect a harvest similar to 2014/15.

Meanwhile, in eastern São Paulo (Limeira), the first flowering resulted in a low rate of flower setting. Nevertheless, the second flowering attempt by citrus trees was much more successful. Consequently, losses in this region will not be as large as in other parts.

In the northern part of São Paulo’s citrus belt (Bebedouro), drought and heat were relatively strong and they limited success in

both flowering attempts. However, flowers did set and more appeared in late 2014.

Losses were the most severe in the central region of São Paulo state (Araraquara), with some areas perhaps unable to produce during the main season.

Orange production in São Paulo state will drop by 2.2% to 284.88 million boxes in 2015/16, according to the first production estimate released by São Paulo’s Agricultural Economics Institute (IEA). Last year’s harvest was 291.2 mln boxes, representing 11.86 mln tonnes of oranges. According to the IEA, despite a good initial flowering of the crop, low precipitation since the end of 2013 and sparse rainfall during the summer caused a unsatisfactory development of the fruit.

Florida will produce 102 mln boxes, unless the forecast is downgraded again (it remained unchanged at the last monthly forecast).

And the fourth problem is that Brazil still has a large inventory of FCOJ, and it is taking much longer to whittle down than Brazil expected, because of Problem One. In mid-March, CEPEA said that the pricing scenario for orange fruit in 2015/16 remained “rather

uncertain” after the Brazilian Association of Citrus Exporters (CitrusBR) announced last month that the FCOJ inventory in June 2015 could end up at around 447,000 tonnes.

Orange growers Taquaritinga, Pirassununga and Novo Horizonte signed two-year orange fruit supply deals with Citrosuco at USD5.00 per box, or BRL16.24/box at the then rate of exchange. The dollar has gained in value since then.

The two remaining large OJ industries – Cutrale and Louis Dreyfus Commodities (LDC) are believed to have fewer orange fruit supply contracts in place with third-party suppliers for the upcoming season and this may force them to be more reliant on spot market purchases than Citrosuco. If the dollar continues to strengthen, then more spot purchases may be made, because the sellers will get more Brazilian reals for their dollar sales.

The fall in Brazilian exports in 2014 was severe: some 876,000 tonnes represented a decline of 13% over 2013, and this was the lowest export tally since at least 1997 – a fact that appears to have escaped many pundits. Europe only took some 513,000 tonnes through its main points of entry (the Netherlands and Belgium),

down 75,000 tonnes from what was imported in 2013. Exports to the UK, which have been pretty consistent at between 45,000-53,000 tonnes for years, slumped to 12,692 tonnes.

There are no new markets presently opening for Brazilian FCOJ. A decade or so ago, great hope was placed on sales to China, but they have not materialised. China is making its own orange juice, albeit much less than it originally planned to make, and exporters have realised that first, the Chinese do not really rate orange juice as a flavour; secondly that the market there is still for juice drinks with a typical juice content of 10%; and thirdly, that consumption patterns are different. The Chinese simply do not drink juice at breakfast, as is done in the West. There are still the BRICs countries as potentially lucrative markets, but sizeable exports to these countries lie some distance in the future (if at all).

To a certain extent, Brazilian FCOJ exports have been declining, at least to the markets in the US and Europe, because some 15 years ago demand started climbing for NFC juice. Exports of NFC juice grew spectacularly in the decade from

Despite the futures pundits, and despite the depredations of disease and drought, there is still an over-supply of orange juice.

ORANGE JUICE I JUICE 2015

BY NEIL MURRAY

THE HOUSE OF ORANGE

BRAZILIAN NFC ORANGE JUICE EXPORTS (FULL YEAR, TONNES) 2007 2008 2009 2010 2011 2012 2013

Belgium 293413 357747 353410 441163 494491 436359 551962

US 256590 206670 280112 262070 249501 284572 192246

Netherlands 238082 364597 273638 232667 296785 246933 355014

Switzerland 4984 232 31014 14332 0 7941 2527

Chile 485 563 386 0 0 0 55

Japan 0 237 18 66 43 39 33

Others 1724 2040 864 243 208 34 15

Total 46984 49198 52843 47833 48112 46115 45029

Source: GTIS, Brazilian Customs



2002 (barring a slight dip in 2008 and 2009 due to the financial crash), but have since stabilised. Last year’s exports of 1.04 mln tonnes were 5% down on the 2013 figure, and really, exports have been stable for the last four years.

The futures market has been volatile his year, with speculators piling in every time the USDA has downgraded the Florida orange forecast, and on every production report from Brazil. Futures also spiked at the start of the hurricane season, but then it frequently does. Fundamentally, the bears have been disappointed this year, because the world is still awash with orange juice, and a strong rise in the price doesn’t seem feasible until we reach the point where the Brazilian inventory is brought right down, and production is also low. That does not look likely this year, but could happen next year.

The major Brazilian processors have also faced resistance to their high prices from some of the large bottlers, despite trying to set a notional ‘official’ price. The independents are able to supply at prices perhaps USD300 per tonne lower than the Big Three. True, the quality of their FCOJ may not always be as good, but it is perfectly good for cheap product (and so appeals to the discounters) and is more than good enough for soft drinks manufacture.

The USA’s 2013/14 season opened with an inventory of 538 mln single strength equivalent (SSE) gallons, and ended at 561 mln SSE gallons. US per capita consumption is down to 2.6 gallons per year, from 3.7 gallons/head five years previously. With the US domestic retail market still in free-fall (currently running at 8% down by volume, for the season so far), and retail prices rising at more than 5% at a time of historically low inflation, the options for orange juice processors would appear limited. Remember that pure juice sales, globally, only account for 29% of juice beverage sales. n

JUICE 2015 I ORANGE JUICE

BRAZILIAN FCOJ EXPORTS (FULL YEAR, TONNES) 2007 2008 2009 2010 2011 2012 2013 2014

Belgium 479000 488445 466523 429276 385269 389006 339114 270462

Netherlands 247139 197715 216269 223734 186149 204268 249510 242747

US 245059 145866 132947 97820 122166 82394 180888 168135

Japan 84880 53433 71351 56829 70417 65043 54469 56569

China 29994 32359 48900 55143 53948 37948 37591 37069

Switzerland 51338 56722 49104 32177 18119 24373 41875 23164

Australia 15043 23628 26220 17714 16733 15109 14314 19037

UK 46984 49198 52843 47833 48112 46115 45029 12692

Puerto Rico (US) 7205 13256 7989 10518 8782 5559 10051 7974

Israel 7268 7865 5404 2940 6113 8427 10368 6878

Chile 4576 4394 4091 4918 5107 5923 6227 6024

Indonesia 81 230 616 1179 1644 1284 1323 3382

Saudi Arabia 2894 1465 2279 2228 1239 543 566 3105

New Zealand 4395 3831 3415 2933 1936 1630 2091 2427

South Korea 15388 16311 12241 13439 16339 3225 66 1983

Argentina 5162 3537 2136 3500 1568 1397 1015 1707

Taiwan 1266 1927 2739 2090 1096 1178 1542 1639

Singapore 798 1209 2089 1740 966 1583 1763 1556

Cyprus 97 292 902 1192 544 1056 1348 1528

Turkey 0 0 433 764 1697 1325 1409 1462

Kuwait 785 1056 981 934 314 563 1100 1444

Malaysia 1130 1141 1216 895 637 1405 1752 1328

Russia 430 19 0 546 439 410 663 1068

Iran 0 0 340 869 1409 284 0 1066

Vietnam 716 1119 1476 1579 962 1134 954 1031

Thailand 937 915 1011 1620 1290 1622 1934 1026

Ireland 2086 832 122 516 2362 4650 2800 827

Colombia 579 703 808 624 1056 703 192 816

Italy 702 964 2176 834 208 1099 824 775

Philippines 377 471 548 510 131 932 561 571

India 657 933 658 757 242 377 940 525

Greece 822 352 354 192 75 230 488 507

Algeria 64 1292 1341 1073 1209 1111 76 428

Canada 170 56 569 138 74 75 46 427

Lebanon 82 248 449 99 361 585 377 408

Poland 180 0 50 0 0 298 428 391

Dominican Rep 86 30 0 0 0 0 51 339

Austria 0 0 0 50 51 91 0 337

Ecuador 295 272 138 223 252 291 363 336

UAE 682 1353 2305 866 1078 469 514 328

Peru 283 256 330 178 460 318 184 312

Uruguay 24 20 133 72 162 221 260 308

Germany 1257 399 430 751 55 1311 208 215

Cambodia 0 0 0 0 0 142 151 188

Bulgaria 2 0 51 103 48 115 117 163

Norway 75 204 46 100 19 82 19 136

New Caledonia 19 76 95 56 113 76 95 113

Paraguay 9 8 36 22 328 223 84 106

Others 9911 7427 5593 5530 4197 2957 2817 672

Total 1270927 1121829 1129747 1027104 965476 919160 1018557 885731

Source: GTIS, Brazilian Customs



The processed pineapple industry (canned as well as juice) is still feeling

the pinch from the long-running production problems in Thailand, and these problems are reflected in the country’s PJC exports last year, which fell to an eight-year low (and probably even longer than that).

The low production was flagged up well in advance – in October last year FOODNEWS reported that the plants were only receiving very small volumes of (not entirely satisfactory) fruit. Sources reckoned that the supply of the winter crop from Thailand would only be around 600,000 tonnes, or four to five months’ supply.

The pineapple industry is long used to the boom-and-bust cycle in Thailand, and the present shortage is just one of these cyclical low points. Thailand had a huge harvest in 2012, fruit prices dropped to THB3.4-4.0/kg (USD0.10-0.12/kg), and so farmers migrated to other crops and neglected their pineapple plantations. Not even the small 1.8 million tonne harvest of 2013 was enough to push prices up, and so this led into 2014 and 2015.

So Thailand only exported slightly over 102,000 tonnes of PJC last year, down about 34,000 tonnes from 2013. Sales to Europe are down by more than one-third, and sales to the US by about a quarter. These are the two main markets for Thailand – interestingly,

exports to the three main Asian destinations of South Korea, Japan and Taiwan have remained almost unchanged, but as all three combined do not come close to the volumes imported by the US, let alone Europe, this is something of an irrelevance.

The Philippines has fared better. It suffered from a smaller harvest as well, but still pushed its exports to over 126,000 tonnes, way above its eight-year average, and only (just) exceeded by the bumper exports in 2012. The US is the only major market for the Philippines, and fortunately for the Philippines, US uptake went up by about 8.5% to just over 110,000 tonnes.

Indonesia has had some surplus stock this season, but it remains a minor player. On the other hand, its annual PJC exports have

remained remarkably stable for the last six years (Customs data is unobtainable from GTIS beyond 2008). The 20,917 tonnes exported in 2014 compare with the six-year average of 20,577 tonnes.

That leaves Costa Rica, which has traditionally majored on its NFC juice sales, and for which concentrate production and export is secondary. However, Costa Rica has had a different supply problem in recent years: it is exporting more and more of its fruit as fresh. Despite an energetic planting campaign, there has not really been enough fruit to supply the demands of the fresh, NFC and PJC markets together.

So last year, Costa Rica’s PJC exports dipped again to 31,320 tonnes, the third year of decline after the bumper year of 2011. Costa Rica is also reported to be

Thailand is presently in a ‘bust’ period of its habitual boom-and-bust cycle and this is having an effect on PJC prices and the general global supply situation.

PINEAPPLES I JUICE 2015

BY NEIL MURRAY

FRUIT SHORTAGE

INDONESIAN PJC EXPORTS (FULL YEAR, TONNES) 2009 2010 2011 2012 2013 2014

Netherlands 7974 8953 5424 9695 7935 4944

US 5160 3787 7065 1788 2512 4499

Saudi Arabia 555 1347 1889 2177 2416 4069

Spain 2428 1535 1777 1708 1984 1613

Singapore 313 605 38 1621 725 782

Puerto Rico 944 1398 188 513 340 732

Pakistan 84 215 279 472 293 685

New Zealand 202 249 225 238 444 654

Australia 365 193 300 564 469 555

UK 406 161 363 365 325 547

Turkey 210 252 147 252 318 294

Israel 99 200 21 63 209 249

Japan 724 426 279 243 41 174

Portugal 248 358 250 248 177 157

Egypt 42 64 107 107 129 150

India 39 116 39 190 43 145

France 43 0 0 0 105 144

Kazakhstan 0 0 0 0 0 126

Others 1316 1414 917 869 1235 398

Total 21152 21273 19308 21113 19700 20917

Source: GTIS, Indonesian Customs NOTE: Data prior to 2009 unavailable

COSTA RICAN PJC EXPORTS (FULL YEAR, TONNES) 2007 2008 2009 2010 2011 2012 2013 2014

Netherlands 15825 14128 34247 30474 27893 6324 15705 13690

Spain 1913 2510 7084 4318 5892 2538 4556 4267

US 2742 4936 2834 4129 4999 3417 1237 3501

Belgium 0 13056 11138 13691 22246 15831 10680 2440

Japan 313 1846 725 1156 2312 2034 1885 2138

Puerto Rico 66 146 395 199 523 673 994 982

France 2325 2074 3863 3625 4299 483 3626 826

Lebanon 0 0 19 0 82 71 76 475

Honduras 0 0 0 0 327 345 473 465

Jamaica 534 166 497 338 352 126 226 420

Trinidad & Tob 0 0 0 0 42 0 122 364

Guatemala 0 0 59 125 106 231 59 239

UK 1192 3930 836 336 987 401 0 202

Germany 115 391 774 166 258 526 1095 197

Canada 20 7 961 1479 877 88 0 174

El Salvador 0 20 0 108 700 538 372 167

Belize 0 37 116 0 157 419 60 148

Dominican Rep 142 20 76 109 50 43 148 146

Others 1394 834 1575 3289 4300 2156 789 479

World 26581 44101 65199 63542 76402 36244 42103 31320

Source: GTIS, Costa Rican Customs



JUICE 2015 I PINEAPPLES

THAI PJC EXPORTS (FULL YEAR, TONNES) 2007 2008 2009 2010 2011 2012 2013 2014

Netherlands 47121 49355 52704 54378 53697 50522 50031 35125

US 22568 30251 26590 19938 17811 22786 20697 15487

Italy 9632 9148 10040 10905 15795 12241 7302 5096

Australia 3069 3653 3957 3468 6144 7025 6573 4470

Iran 1430 2409 2137 4620 5379 3875 5332 4225

Japan 5671 5905 5893 5628 6722 3630 3949 4144

South Korea 1483 2100 2306 2154 1815 1300 3152 2996

Taiwan 415 287 142 225 608 3560 2698 2711

Spain 10466 8740 7175 5158 4273 4463 3813 2694

Nigeria 366 82 97 382 1158 1641 2008 2084

UK 3230 1424 738 1742 1665 2659 2782 1973

Egypt 484 790 815 1094 1120 710 1431 1770

UAE 1436 1804 1526 1506 1471 1832 1765 1682

France 928 789 1098 1173 1815 1108 1270 1522

Canada 1648 2810 1372 676 1031 1149 1238 1460

India 628 286 934 958 1401 1149 1531 1443

Saudi Arabia 938 1824 1212 673 979 1204 2222 1257

Israel 4794 2733 4332 2908 4892 2257 2139 1065

China 51 142 400 232 317 906 1353 988

Russia 4393 2811 707 668 669 1232 1897 791

Belgium 546 1393 1244 1062 731 471 501 713

Libya 176 112 244 350 256 613 1430 656

Chile 673 1273 757 321 1063 977 1186 645

New Zealand 140 263 426 292 396 245 188 565

Argentina 19 0 22 39 184 181 260 549

Lebanon 1194 1405 2051 1613 875 1046 1062 491

Algeria 35 0 0 37 289 390 1035 489

Ukraine 1285 760 414 661 379 836 712 389

Jamaica 334 741 314 546 507 510 299 359

Laos 29 327 135 316 237 80 347 326

Greece 145 351 296 320 282 366 360 308

Puerto Rico 856 100 57 77 19 186 165 267

Denmark 311 406 358 449 216 202 267 247

Ghana 0 68 262 307 332 314 463 189

Cyprus 172 313 316 321 82 182 237 179

Senegal 0 35 95 108 175 71 305 172

Barbados 133 116 38 76 76 38 19 170

South Africa 3 26 5 1 1 125 218 166

Malaysia 149 94 79 128 152 127 232 159

Singapore 68 931 123 148 170 164 201 156

Papua N Guinea 69 113 45 115 86 131 120 156

Germany 669 365 1026 944 2123 242 322 155

Mauritius 24 45 20 0 1 174 110 144

Latvia 0 0 1 1 20 82 41 143

Sri Lanka 0 2 3 1 0 2 138 129

New Caledonia 80 80 61 79 85 92 99 127

Turkey 0 25 0 21 121 226 350 120

Finland 190 129 68 0 31 0 47 113

Switzerland 12 163 101 148 24 1 292 112

Cambodia 57 63 82 58 72 114 104 103

Others 4478 6441 7803 4291 2922 2888 2560 1047

Total 132598 143483 140621 131316 140669 136325 136853 102527

Source: GTIS, Thai Customs

suffering from a fruit shortage this season. According to Procomer, the country’s official export body, first-quarter exports of fresh fruit fell by 15% to USD110 mln from USD129 mln last year. Irregular rain cycles last year delayed the planting, which in turn affected the

crop, and cold weather meant that it took longer for the fruit to ripen and achieve the desired brix levels. At present, this is only affecting fresh fruit shipments, but there will almost certainly be an effect on the country’s juice production as well. n

PHILIPPINES PJC EXPORTS (FULL YEAR, TONNES)

2007 2008 2009 2010 2011 2012 2013 2014

US 91045 93673 96702 84877 95310 105145 101578 110195

Canada 6404 5206 4577 4246 4054 5228 3520 3522

China 190 69 22 35 777 302 463 2835

Saudi Arabia 271 296 718 1304 537 1109 403 1347

Japan 963 1619 490 944 3080 1422 584 1079

Netherlands 6687 1194 1896 990 1279 2732 1200 862

UAE 400 412 849 884 937 1282 1036 721

Hong Kong 764 517 671 658 1202 3427 690 710

Bahamas 154 95 86 183 163 257 181 313

Israel 56 75 305 652 275 543 774 305

Australia 743 425 833 84 236 394 196 299

Italy 75 59 524 130 185 182 24 282

Singapore 4140 3140 2014 286 471 533 518 278

Trinidad & Tobago 188 18 0 108 69 165 122 276

Spain 1563 1000 188 377 318 229 228 265

Qatar 146 132 565 338 247 296 189 247

Kuwait 31 78 82 129 40 180 215 234

Hawaii 259 158 160 141 198 484 284 231

Curacao 0 0 0 0 162 179 156 228

Guam 351 324 400 323 268 271 243 200

Korea South 1113 500 318 277 437 195 182 193

Puerto Rico 694 645 553 651 519 519 179 149

Pakistan 44 257 33 96 78 238 77 119

Others 4665 4601 2924 2296 3975 3967 2279 1230

Total 120946 114493 114910 100009 114817 129279 115321 126120

Source: GTIS, Philippines Customs


www.rhodesfoodgroup.com

Rhodes Food Group (Pty) LtdPniel Road, Groot Drakenstein, 7680

Western Cape, South AfricaTel: +27 (0)21 870 4000Fax: +27 (0)21 874 1445

[email protected]

INNOVATION AND EXPERTISE: A FRUITFUL COMBINATION

Rhodes Food Group is a leading internationally recognized food production company, which provides local and international markets with premium quality meal solutions, beverages and canned food products.

RHODES FOOD GROUP

Rhodes Food Group enjoys a rich history of fruit farming and processing that dates back to the 1800s. Today, we are a world class Southern African supplier of high quality bulk fruit purees and concentrates to the global beverage industry. We have state of the art processing facilities located in the deciduous fruit-growing region of the Western Cape, South Africa as well as in Swaziland – close to our pineapple farms and the wider citrus orchard area. Our commitment to international food safety standards sees us producing peach, pear, apple, apricot, tomato and pink guava purees; in addition to pineapple, orange, marsh and ruby grapefruit concentrates. Our expert production, technical and product innovation teams have also crafted a wide range of balanced juice blends, which are packed into ambient juice retail products (in either Tetra Pak® or Elopak formats) for various global third party brands, premium private label programmes and our own brands.


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