A Bitter Analysis of the World’s Orange Juice Market

Global Perspectives
Orange juice market

Marcos Fava Neves

By Marcos Fava Neves

During the last five years, I was involved in a study that examined data in depth about the world’s orange juice (OJ) consumption. This study, led by Markestrat, gathers data from Citrus BR associates, U.S. Department of Agriculture, Tetrapak, Compass, Nielsen, Planet Retail and other recognized international organizations that collect data.

The analysis was performed in 40 countries (markets) that represent more than 99 percent of frozen concentrated orange juice (FCOJ) consumption (not considering juice produced directly from the fruit). The numbers for 2015 are not encouraging.

In 2015, the world consumed 1,938 million tons of orange juice (converted to FCOJ). This represented a 5.3 percent drop (108,000 tons) from the 2.046 million tons of 2014. Looking at a 10-year comparison, the consumption drop was 19.2 percent (2.397 million tons in 2005). At the same time, the world’s population increased 12 percent, and per capita income rose 39 percent. In a decade of growing food markets, OJ lost sales.

TOP-CONSUMING COUNTRIES
As the largest consumer, the 11 percent fall in the United States in 2015 (from 688,000 to 613,000 tons) was the major factor responsible for the world’s consumption decline. When compared to 2005, the United States lost 38 percent (it was 988,000 tons), and the per capita consumption fell from 18 to 10 liters in 10 years.

Germany and France hold the second and third positions as the world’s largest OJ consumers, representing approximately 150,000 tons per year. They both fell 4 percent in 2015. When compared to 2005, the decline was almost 30 percent in Germany (it was 208,000 tons) and 8 percent in France.

A negative surprise in this year’s analysis came from emerging economies, mainly China. This market has experienced growth of 133 percent since 2005. China is already the fourth largest OJ consumer, but fell 6 percent in 2015, dropping from 141,000 to 132,000 tons.

Canada and the United Kingdom (UK) are the fifth and sixth largest OJ markets. Each fell approximately 110,000 tons, but the UK had the largest loss (almost 8 percent).

In the seventh to 20th positions of the consumption ranking are countries with consumption varying from 20,000 to 60,000 tons. Saudi Arabia, Mexico, Japan and Argentina showed growth of more than 5 percent. Brazil, Australia, Spain, South Africa and Italy stayed the same. Belgium, the Netherlands, South Korea, Russia and Poland had demand falling more than 5 percent.

ECONOMIES AND CONSUMPTION
Data about per-capita consumption shows some interesting figures. Those in countries with developed economies consume approximately 10 to 15 liters per person per year. Those in countries with emerging economies consume approximately 2 to 4 liters per person per year. The Chinese drink only 0.5 liters per person per year. There is potential to increase this figure, but the issue is a lot of competition from the growth of other juices, nectars, flavored waters, teas, coconut water and additional beverages.

ORANGE REMAINS FAVORITE JUICE
In our study, orange juice was still the most consumed juice in almost all of the 40 most important markets, with more than a 50 percent share in the 100-percent fruit juice category. Orange juice only loses to apple juice in Germany and Russia, and to juice and vegetable mixes in Japan and Turkey.

A COMPLICATED CHALLENGE
Consumption numbers for orange juice are not promising. This is one of the only cases in all agribusiness commodities where the market has fallen. Grains, meats and several others have booming markets ahead. But due to several reasons, OJ production is falling faster than demand, bringing higher prices that may further complicate this scenario. It is a challenge that will require thoughtful strategies to revert.

Marcos Fava Neves is a professor at the University of São Paulo (Brazil), international adjunct professor at Purdue University (Indiana) and author of “The Future of Food Business” (World Scientific, 2014).

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