view current print edition




Sunkist celebrates another billion-dollar year

by | February 18, 2009
VENTURA, CA -- "2008 was another billion-dollar year for Sunkist, the 11th in the past two decades -- which includes four freeze years," Sunkist President and Chief Executive Officer Russ Hanlin was quoted in a Feb. 18 company press release as saying to the more than 500 growers attending Sunkist Growers' 115th annual meeting at the Ventura County Fairgrounds. "In 2008 our total revenues were up 8 percent over 2007, and at $839 million, payments were up 5 percent."

Because 2007 was a freeze year, Mr. Hanlin noted that these figures topped the pre-freeze three-year average by 4 percent. The results, he added, are especially gratifying because they were achieved while not only dealing with a record navel crop but also while transitioning the sales organization to a more centralized structure.

Mr. Hanlin recapped the 2007-08 season, starting with the huge 95-million carton Navel crop and a Navel season that lasted from mid-October well into July. "While as is typical, grower returns varied widely depending on fruit quality and size as well as the mix of domestic and export shipments each grower had," Mr. Hanlin said in the release, "the overall result was the best f.o.b.s ever for a crop of this magnitude, and a respectable utilization percentage considering the long marketing window needed to work through a crop this size."

The record Navel crop was followed by a large crop of Valencias that also presented some marketing challenges which were exacerbated by record high fuel prices followed by the worst economic down turn in decades.

Lemons, he noted thankfully, were a different story. "It was another one for the record books, & the highest f.o.b. and revenue ever, exceeding the record set the prior year by $20 million and a pretty good 2006 by $60 million."

Helping the bottom line were ongoing improvements in Sunkist's citrus juice and oils operations, Mr. Hanlin added. In 2008 Sunkist completed the plant consolidation, and now all citrus byproducts are processed at Sunkist's Tipton plant, driving greater economies of scale and increased efficiencies. "We are now the leading high-quality, low-cost producer on the West Coast and a top supplier of value-added citrus products," he stated in the release.

Mr. Hanlin reminded growers that the industry is changing rapidly. "Competition is increasing with offshore fruit impacting both domestic and traditional export markets in ever-expanding volumes with new trade agreements adding to that competitive equation. Customers continue to consolidate, concentrating more and more purchasing power in fewer and fewer hands."

Sunkist has restructured to meet the demands of the new marketplace, according to Mr. Hanlin. "Over the past year, we took a long, hard look at every aspect of our business and made some significant changes -- both structural and procedural. We have strategies in place that allow us to more effectively compete in the global marketplace. The result is better service at substantially lower costs -- both to our growers and to our customers."

Sunkist said that its sales organization is now leaner and more efficient and effective, tailored to today's market needs and employing the latest in technological resources. "Trading bricks and mortar for electronic technology," Mr. Hanlin said, "we have realigned our sales network to better serve customers, packers and growers."

Sunkist said it has a progressive agenda and is positioned to quickly take advantages of opportunities. "Our goal is to harness the value of the 'Sunkist brand and to leverage that value for the benefit of our growers. We are focused, first and foremost, on our core business and our efforts to conduct that business as efficiently and effectively as possible," according to Mr. Hanlin. "In addition, we are continually expanding and enhancing our for- profit businesses: global sourcing; research and technical services; Sunkist Taylor, a fresh-cut business offering healthy snack products to school lunch programs as well as foodservice and retail outlets; and global brand licensing, with more than 600 products in 45 countries."

Currently, the profits from those businesses are used to reduce the cost of operation to growers, and Mr. Hanlin told growers that he hoped, in the very near future, to use these profits to also pay a dividend to growers.

Although the year ahead will be difficult, with demand constrained by the unstable economic conditions worldwide, Mr. Hanlin said that Sunkist is well positioned to weather the storm.

"While the next several months will not be easy, there is comfort in the fact that Sunkist is armed with more than a century of experience to meet the challenges ahead, he concluded in the release. "Our business is headed in the right direction, our staff is among the most knowledgeable in the business, our company is strong financially and our vision is focused. We remain the premier marketer of citrus, and my goal as president is to ensure that Sunkist continues to create value for our growers."

This was Russ Hanlin's first annual meeting as president of Sunkist. After 30 years working for Sunkist Growers in various and increasingly important positions, he was chosen Nov. 1, 2008 to succeed Timothy J. Lindgren as president and CEO of the 115-year-old citrus marketing cooperative. He is the second member of his family to serve as Sunkist president. His father, Russ Hanlin Sr., was Sunkist president from 1978 to 1998.