New York
Cnn
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Florida has exploded with tighter hurricanes than ever before. A fertile insect disease continues to destroy orange trees. And, above all, consumers are watching their sugar intake. It is adding up to a disaster for Tropicana orange juice.
Tropicana, founded in 1947 by an immigrant from Sicily who developed a process for freezing orange concentrated juice, is in financial concerns and can be directed for bankruptcy.
Tropicana Brands Group, who owns Tropicana, Naked, Kevita and other juicy drinks, has seen sales and profits deteriorate in recent years. The company’s revenue fell 4% the last quarter and its revenues dropped 10%, according to Debtwire, a publication of financial services.
Actions from its owners paint a much heavier look. Pai Partners, a European private capital firm that received a company controlling share four years ago from Pepsico, recently provided an emergency loan of $ 30 million for Tropicana, “indicating that they are a recent resort lender” and “are not sure that any value remains from their initial investments,” Tim Hynes said.
Pepsico, who still owns a minority stock in the company, also said she wrote the value of her investment with $ 135 million in the last quarter.
“Tropicana’s financial difficulties have raised concerns about how the company will manage its balance,” Hynes said. “Tropicana faces an uphill battle.”
Tropicana and Pai Partners did not respond to CNN requests for comment.
Lack of supply in the highest growing areas of orange-exacerbated by catastrophes influenced by climate change as the most severe hurricane in Florida and intensive drought in higher prices, competition and changes in American diets have blocked tropical. The Department of Agriculture expects this year’s orange production to be the lowest to 88 years.
Orange production has become as harsh as Alico, a large tropicana supplier, ended his growing citrus operations. The company said last month that “growing citrus fruits are no longer economically applicable to us in Florida”, with diseases and hurricanes that reduce its production by 73% over the last decade.
Consumer trends have also damaged OJ. Customers are replacing orange juice with teas, carbonated water, sports drinks, energy drinks and other drinks that claim to be healthier or offer functional benefits such as improved immune systems or energy levels, say analysts.
Inside the orange juice market, Tropicana is squeezing at the bottom end from the cheapest service brand of the Coca-Cola minute and the highest end from simply, which has prices similar to Tropicana and is grabbing customers ready to pay more for orange juice, said Duane Stanford, Beverage publisher.
Tropicana is facing a “corncopy of challenges,” he said.
Hurricane Milton hit Florida last year with deadly tornades, historical rain and large winds – and the storm was overseen by climate change, according to a scientific analysis.
It also destroyed the orange industry in Florida. Florida makes up most of the orange produced in the United States.
“Milton came to the center of the state and really affected perhaps 70% of the most productive citrus area in Florida,” said Matt Joyner, CEO of Florida Citrus Mutual, a advocacy group for growers, said last year.
And it is not just atmospheric disasters that have destroyed the industry. The production of orange in the United States has fallen in recent years due to the spread of citrus greenery disease, a bacterial infection that interrupts the main nutrients in orange trees, which first hit Florida in 2005. Trees infected with the disease produce less orange, lower quality and eventually die.
The production of orange in the United States was projected to drop 10% in 2024 at 2.2 million tonnes due to weather and disease problems, especially the greenery of citrus in Florida, according to USDA. Florida production was projected to fall 33%, while production in California was expected to fall 1%.
Although people have stopped buying as much orange juice as possible, supply issues have led to OJ prices to fly despite.
Orange juice prices are almost doubled compared to 2020, reaching high record levels at the end of 2024. The average pricing of a 12-ion orange juice was $ 4.50 in January, from $ 2.30 in January 2020, according to the Bureau of Work Statistics.
And those high prices are turning off clients even more, said Stephanie Mattucci, an analyst in Minel Market Research Company. Only 19% of American consumers think that orange juice is a good value, according to a mincel study of 2,000 customers in April for a report on juicy drinks.
The rise in orange juice prices have come while prices in other foods, such as eggs, have increased.
Customers in the dollar stores are abandoning orange juice faster than buyers in grocery stores, warehouse clubs and large box chains, said Chris Costagli, a vice president and leader of food penetration at the NIQ market.
Dollar stores usually take care of lower -income customers, and attraction has a sign that the most sensitive buyers are falling orange juice, he said.
Recently, instead of raising prices, Tropicana tried to address cost growth by shrinking her bottle. But the attacked movement.
Tropicana rejected her special clove, with its circular shape, rare neck and wreath -like bottle lid. During the summer, it supported a more traditional plastic bottle and reduced the bottle from 52 ounces to 46 ounces. Tropicana also narrowed the label to fit the most compact bottle.
OJ fans were frustrated for the new look and protested that Tropicana was removing them selling smaller bottles. Tropicana told CNN at the time the company changed the bottle to address reactions from clients, including making it easier to spill and storage while reducing plastic on the lid.
Changing consumers ideas for health have also damaged orange juice and other fruit juice, which are relatively high in sugar and calories. Today, freshly pressed green juices, enlarged water and protein -filled drinks are considered healthier than OJ.
Aware of changing tastes, Tropicana has tried to stay forward.
In 2023, Tropicana launched a line of zero sugar. Tropicana also released bottles with limited edition without the letters “A” and “I” in her name (“Tropcn”) to bring attention to its natural ingredients. Marketing stunt was intended to highlight “the fact that there is nothing artificial, and it has never been artificial” in the brand orange juice.
Tropicana is also shifting to faster growing drinks.
Last year, the company introduced Refreshers Tropicana, a non-orange juice line and a gas drink line.
But the Tropicana brand is synonymous with orange juice. Changing the Customer Association with Tropicana after nearly 80 years is difficult, Stanford said of Digest drinks.
“When much of your business is concentrated about 100% orange juice, it takes some time to diversify.”