Orange juice remains the nation’s most popular fruit beverage. The problem is many Americans just don’t drink it anymore.
Annual consumption for a juice that became a U.S. breakfast staple after World War II is now the lowest in at least 18 years. While smaller orange crops in Florida and Brazil have sent futures surging in the past month, sales of the top two brands, PepsiCo’s Tropicana and Coca Cola’s Minute Maid, have plunged in the past decade.
Demand has suffered as beverage choices increased, from diet sodas to sports drinks, and high sugar content has become a turnoff for calorie-conscious consumers, data from market researcher Euromonitor shows.
Sales of bottled water topped all juices for the first time in 2007. The waning appeal of orange juice has limited the impact of a 55 percent production decline since 2004 in Florida, the biggest U.S. citrus grower.
"The trend is persistently downward," said Lara Magnusen, a portfolio manager at La Jolla, California-based Altegris Investments Inc., which manages about $2.5 billion.
Americans still drink more orange juice than people in any other country. The industry was born in the late 1940s, after scientists figured out how to dehydrate the juice as "frozen concentrate," clearing the way for mass production of a drink singer Bing Crosby promoted on the radio. Before then, juice was squeezed directly from the fruit.
Producers got another boost from pasteurization methods in the 1970s and 1980s that paved the way for ready-to-drink juices, and consumption peaked in 2000 at 1.6 billion gallons, data from the Florida Department of Citrus show.
Since then, the appeal has waned. Demand in the year that began Oct. 1 will drop 1.1 percent to 925 million gallons, the least since 1996 and the eighth decline in 10 years.
While orange juice accounted for about 60 percent of U.S. fruit-juice sales in the past decade, the market shrank 21 percent over that period, Euromonitor estimates. Since 2004, annual sales tumbled by a third at Tropicana to $1.4 billion last year, and Minute Maid dropped 27 percent to $927.5 million.
Even as consumption drops, output is falling faster. Demand exceeded production for 10 years in Florida, where the crop slid 22 percent last season to 104.6 million boxes, after drought and citrus greening disease hurt groves, U.S. Department of Agriculture data show. A decade earlier, the harvest was 242 million boxes.
The global harvest last season was 1.89 million metric tons, less than estimated demand of 1.96 million, USDA data show. Growers in Brazil saw damage in trees because of an extended drought and high temperatures in the season that began July 1, Cepea, a University of Sao Paulo research unit, said last month.