Sunkist smiles

Here are excerpts from the press release with today's date describing the Sunkist annual meeting:

“Despite the freeze, our 2006/07 sales were close to $1 billion,” Sunkist’s President and CEO Tim Lindgren said in his operational report. “And grower returns were proportionally higher than volume would indicate, not only because of the shorter supply, but also because of aggressive selling.
For Sunkist, 2008 is off to a good start despite the challenges at the front end of the navel season and greater-than-normal competition overseas. It’s going to be a long season as the navel estimate was just increased by 10 million cartons, bringing it to a total 96 million cartons, the largest navel crop on record. “But as our growers and shippers know,” Lindgren said, “Sunkist is an historically strong performer in large crop years due to our internationally famous brand and our large and loyal customer network.”
Sunkist’s specialty citrus program, with some variation by variety, is also on track to beat the record set in 05/06. In addition to its strong program on tangerines, Sunkist has introduced a tangerine juice pool, a strong growth category for the future.
“The fact that we are working with a much smaller total lemon crop this year is widely documented,” Lindgren added. “Perhaps not so widely known is how Sunkist has been able to move the market up dramatically on price. The average FOB on lemons, season-to-date, is more than double the average FOB in 05/06.
With its aggressive marketing and attractive new packaging, Sunkist’s organics program is off to a good start with three packinghouses, one in each district, certified to pack organics. “Our customers tell us they are anxious to have Sunkist involved in organics in a big way,” said Lindgren. He predicts that organic citrus, combined with Sunkist quality, service and dependability will command a premium.
“Sunkist took many bold steps in 2007,” Lindgren concluded. “The operational restructuring now underway is enhancing our brand, streamlining our operations and allowing us to take advantage of new opportunities that better position us in the marketplace. We have reduced expenses by 22%, and while some of the reduction was freeze-related, most of those savings are on-going.
At the same time, Sunkist is gaining volume. “We embarked on a program to add new acreage on a very selective basis,” Lindgren explained. “We are adding quality production of the varieties we need to meet market demands. We set a strategic goal of bringing 2000 acres of quality citrus into Sunkist annually and in 2007 we successfully reached that goal.

TK: Sunkist, in my estimation, has made some savvy moves in recent years. Looking ahead, managing growth in tangerine production, maximizing navel prices in a heavy crop year and positioning Sunkist in the event Argentina lemons are cleared for export to the U.S. seem to be key priorities going forward.