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Pundit’s Mailbag —
Sunkist And The Australian Citrus Deal

Jim Prevor’s Perishable Pundit, February 22, 2007

We just received a letter regarding a piece we ran some time ago entitled Pundit’s Mailbag — In Defense of Sunkist’s New CEO, in which we ran a lengthy letter to the Pundit supportive of Tim Lindgren and analyzed that letter’s many points.

Among other things, the letter-writer had dealt with the issue of many staff departures from Sunkist as follows:

Rick Eastes is a nice guy but was obviously not the man for the job at Sunkist, and I’m sure that had nothing to do with the change in the guard. Sure, there have been a few people leave Sunkist recently but that had a lot more to do with their incompetence than with Jeff’s leadership or lack of same.

The Pundit responded with this comment:

Our letter-writer is entitled to his opinion on others who have been affiliated with Sunkist, but his opinions are not widely shared. To say that “Rick Eastes is a nice guy but was obviously not the man for the job at Sunkist, and I’m sure that had nothing to do with the change in the guard” is to deny reality.

In what sense was Rick not the man for the job? He built the company from nothing. And, why our letter-writer is so “sure” that Rick’s departure had nothing to do with the changing of the guard is beyond this Pundit.

To say that “Sure, there have been a few people leave Sunkist recently but that had a lot more to do with their incompetence than with Jeff’s leadership or lack of same.” Who are these incompetent people who left? Jim Padden, who was Vice President and Chief Operating Officer of Sunkist? Would that be the same Jim Padden who David Krause, then Chairman of Sunkist’s Board of Directors and President of Paramount Citrus, identified as an “in-house candidate” for President and CEO when Jeff Gargiulo announced his intention to leave? It is an absurd claim.

Now we receive a letter asking for clarification:

Question, can you please explain this statement to me?

“In what sense was Rick not the man for the job? He built the company from nothing.”

In regards to Rick Eastes at Sunkist. What did he build from nothing? And how?

— Jeff Gaston
Sunkist Vancouver

Jeff is the sales manager for the Sunkist sales office in Vancouver. He is young, ambitious and has an excellent reputation in the trade. He has a heritage in the business as well. Many remember his father, Gerry Gaston, from his days as a senior executive at Oppenheimer.

Jeff’s question is logical as Rick Estes’ position was principally on the procurement and logistics side of the business whereas Jeff worked on the sales end of things.

One of Rick’s projects was developing the Australian orange deal into Canada. Before Rick did that deal Sunkist had never sold Australian fruit in Canada.

There is not the slightest question that Jeff has been instrumental in the sales success of Sunkist’s Australian citrus program. One just had to walk in the stores and see that Sunkist went from zero to a 70% market share in three years on Australian navels. Much of this growth was based on Jeff’s ability to set up seasonal navel deals with Western Grocers, Overwaitea, Thrifty and many other retailers.

He has done a terrific job of building up business for Sunkist’s Mildura Fruit deal and deserves high praise.

Yet, no sales guy can do anything if they don’t have the product to sell and, bottom line, it was the LLC that Rick was out procuring for that made all this possible.

Rick also was instrumental in handling the logistics of the deal, making sure fruit was available for Jeff to sell even during dock strikes and other interruptions in the normal flow of business.

Beyond his role in Australian navels, Rick Estes built a lot from nothing:

  • The Goede Hoop product from the Republic of South Africa to the USA.
  • An enormous multiplication of the Freshworld business, particularly into Asia.
  • The Mexican lime deal.
  • And, in general,, Rick built the agreements and trading terms that permitted the business to function and grow.

In answer to Jeff Gaston, we took our first letter-writer to be implying that Rick had to leave the LLC because he was “obviously not the man for the job”at Sunkist, which was not true of him, nor was it true of Jim Padden or many others who have left. One supposes he could have been saying that Rick was not the man to be CEO of Sunkist, but that would be ridiculous because Rick never had any interest in that position and never applied for that position.

The more important concern is that there has been talk among Sunkist board members of just closing down the LLC and consolidating the international activities in the main Sunkist Co-op.

This would be a confirmation that Sunkist has turned the wrong way. The LLC was set up to facilitate deals between Sunkist and foreign entities. If Sunkist wanted to open packing houses in China, it would be difficult to bring the Chinese into the Co-op, but the LLC could do a joint venture with ease. If the LLC is ended, then Sunkist’s most flexible tool would go with it.

We hope we clarified our meaning for Jeff Gaston and thank him for his note.

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