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OJ concentrate

US: The frozen concentrated orange-juice market has virtually disappeared

Americans drank less orange juice in 2015 than in any year since Nielsen began collecting data in 2002, as more exotic beverages like tropical smoothies and energy drinks take market share and fewer Americans sit down for breakfast.

When they do drink orange juice, they aren’t drinking it from concentrate.

Frozen concentrated orange juice was invented in Florida in the 1940s, primarily as a way to provide juice for the military, readily storable and easy to ship. But frozen juice has been losing favour for years.

Not-from-concentrate orange juice surpassed the concentrated orange-juice market in the 1980s. Now, the 1.4 million gallons of frozen concentrate that Americans drink each month pales in comparison to the 19.1 million gallons of fresh juice consumed each month, Nielsen said.

Louis Dreyfus Co is scaling back the one citrus facility in Florida that is devoted entirely to concentrated orange juice. The commodities giant is laying off 59 of the plant’s 94 workers as its sells the operation that packs frozen concentrated orange juice into cans for retail.

There are now seven orange-juice processors left in Florida, down from the four dozen that once called the state home.

Most negotiate multiyear supply contracts directly with grove owners. The futures contract isn’t very useful in hedging those deals since producers say frozen concentrated orange-juice prices don’t move in tandem with prices paid for fresh juice.

The irony is this is a year when growers really could have used a good hedge. But the incurable bacterial disease, citrus greening, has slashed the crop in half over the past few years…..

Wall Street Journal: Read the full article