Spend Matters welcomes this guest article by Liliana González of Mintec.
Grapefruit is one of the world’s healthiest foods, due to its high vitamin C content, antioxidant qualities and nutrients that protect against cell damage. Studies, released in the 1990s, stated that eating grapefruit could interfere with some medications, may have reduced consumer confidence. Since then, further studies have been released that have proved grapefruit can reduce cholesterol, prevent kidney stones, aid weight loss and even protect against certain cancers. The industry has therefore been recovering steadily.
Florida (55%), California (20%) and Arizona (11%) are the main grapefruit producing regions in the US. However, production has had its challenges over the past 10 to 20 years, with citrus trees in Florida experiencing major issues following the onset of citrus canker disease, in 1994. Citrus canker is a bacterial disease that causes premature leaf and fruit fall, a decline in fruit health and consequently lower production. It has affected commercial and residential citrus trees in the US and Brazil.
But it doesn’t stop there. Citrus fruits have also been affected by the devastating citrus greening disease that stops the fruit from maturing. As there is currently no cure, and trees may not show symptoms for years, emergency quarantine measures are in place in the southern US states to contain the spread of the disease by killing the infected trees.
As a result, production of grapefruit has declined year after year, which has also affected grapefruit juice production, and grapefruit concentrate prices have risen in the US. In 2014/15, grapefruit production is down 12% from 2013/14 due to lower yields and reduced fruit-bearing acreage in Florida. Lower fruit harvesting has limited the amount of fruit sent to processing, down 14% when compared to the previous season. A larger proportion of grapefruit has been sent to the fresh market due to steady demand for fresh produce. The reduced supply to the juice market has resulted in juice prices going up by nearly 30% since the start of 2015.
It is likely that grapefruit juice prices will remain high in the coming season as the industry continues to find ways to adapt to the challenging factors experienced in the last few years. Furthermore, grapefruit juice not only competes with orange juice, but with the wider soft drink market. As more and more thirst-quenching alternatives come onto the market, juices are also in a fight for market share which could see processors cutting margins to stay competitive.