Of Two Citrus Companies
Jim Prevor’s Perishable Pundit, September 1, 2006
Seeing Bruce McEvoy here from Seald Sweet tells us a lot. First that both Bruce and Seald Sweet deserve a hat tip for making a commitment in South Africa that includes acquisition of land. Second, it demonstrates what an important part of its business South Africa has become. Third, it demonstrates the desirability of geographic diversification in the produce industry.
I think the grower/owners of Sunkist ought to think a lot about Bruce McEvoy being here. As they evaluate the importance of these international ventures, including Sunkist ventures in South Africa, they should think long and hard about where Seald Sweet would be, if, post-hurricane, it didn’t have these international ventures.
We’ve mentioned several times — including a piece here, and I linked to an editorial column I wrote 15 years ago — the urge for the growers/owners of Sunkist to reassess their situation.
South Africa is very internationally oriented because the domestic market is so small. So there is much talk here about China and, specifically, massive plantings in areas such as citrus.
Up to now, Sunkist efforts internationally have focused on the southern hemisphere, which is counter-seasonal to Sunkist’s California and Arizona fruit. The growers/owners of Sunkist have accepted this on the basis that servicing customers year-round makes sense both from a relationship-maintenance and a sales staff-utilization standpoint.
What will Sunkist do about China?
If Sunkist would end the co-op and turn it into a publicly traded company, the answer is obvious. Sunkist would build packinghouses in China and market Chinese fruit to maintain its Asian business. Afterall, Sunkist’s current business will most surely be lost to much cheaper fruit from China, especially as Chinese quality is dramatically improving every year.
Indeed, maybe the Chinese fruit could even be used in other markets where Sunkist can’t sell now due to price issues.
But will the growers be able to see beyond their self-interest in maintaining a vibrant Sunkist, as a corporate entity, not simply as a tool to sell their own citrus? On this question much hangs.