OJ Sales Impacted by Inflation

Jim Rogers Florida Department of Citrus, Orange Juice, sales

Approximately 67% of total orange juice (OJ) is consumed through retail channels, and as much as 93% of not-from-concentrate (NFC) OJ is consumed through retail channels. The Florida Citrus Commission (FCC) learned these statistics at its Oct. 26 meeting. Florida Department of Citrus (FDOC) Economic and Market Research Director Marisa Zansler provided the information, along with other citrus juice sales trends.

OJ

Zansler reported that retailers sold 408 million equivalent gallons during the 2021–22 season, which was 3.4% above the 2018–19 baseline year.  NFC OJ represented 51.2% of total volume movement, reconstituted OJ represented 41.9%, frozen OJ represented 3.6%, and the remaining 3.3% was sold as shelf-stable product.

NFC distribution is down by an estimated 15% compared to this time two years ago, a period before high inflation and sales were relatively strong, signifying the impact of declining supply on the whole category. Zansler reported total sales of $3.32 billion dollars from the 408 million equivalent gallons sold during the season, which was an increase over the prior year. Most notable was the significant increase in price due to various factors, including a reduction in retail trade promotion activity.

Amid inflation concerns, data shows that consumers are still purchasing OJ, and the impact may not be readily measurable in the short-term, Zansler said. While inflation in the food category outpaced the increase in the average price of OJ in recent months, the share of consumers who reported noticing higher food prices at grocery stores was more than 91%. Of those consumers, 83% indicated they were changing their shopping behaviors compared to 71% this time last year. Furthermore, average weekly expenditures on groceries increased by only 1% over the last 12-month period despite a 13% increase in food-at-home prices. Zansler said that suggested that consumers were purchasing less food and/or finding ways to save on the food they purchase.

Zansler advised that reaching consumers along the path to purchase in the 2022–23 season has become critical to maintaining the category. While price has always been a barrier to purchase, the data suggests that consumers are becoming increasingly concerned. Zansler stated that programs must be designed to keep OJ top of mind to reinforce a willingness to purchase and a willingness to pay.

Zansler stated that early projections for the 2022–23 Florida citrus season reveal a steady demand for fresh and processed citrus products amid an expected decrease in overall availability. At the same time, demand of both fresh and processed citrus is tenuous as consumers face tough decisions amid high inflation. Zansler said it is vital for the Florida citrus industry to stay the course in its efforts to ease harmful impacts to grower and processor returns due to severe multi-weather events in 2022. She said it can do that by alleviating higher production costs, increasing overall tree replanting rates, and protecting and revitalizing industry infrastructure.

Read more from Zansler.

Source: Florida Department of Citrus