Citrus Big Business in California

Citrus at U.S. retailers is trending ahead of 2023.

Citrus is big business in California. According to the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service, there are currently an estimated 140,000 acres of oranges under production in the state, as well as 69,000 across of mandarins and tangerines, and 52,000 acres of lemons.

And despite the state enduring some testing times, this product category appears to be in rude health with an expansion into premium lines and innovative new varieties.

Based in the heart of citrus country in Orange Cove, CA, Cecelia Packing Corporation grows, packs, ships and markets premium California citrus, over 60% of which is drawn from its own production covering over 4,500 acres in the area surrounding its packing house.

According to the company’s Allison Garza, Cecelia has experienced a very successful past 12 months with record sales in some items, which it has not been able to reach in the past three to five years.

Garza puts the success down to an extended season due to the higher availability of Valencias and stronger demand for premium citrus. In fact, the company is expecting an increase in production of 10-12% for the 2024/25 season, across the board on all varieties.

Starting harvesting in November through to April-May, and occasionally June, Cecelia’s citrus offer includes navels, blood oranges, Cara Caras, grapefruit, Minneola Tangelos, mandarins, and then Valencias to round off the season. Specialty offerings are offered using labels including Cara Cara Pink Navels, “kid-friendly” Dimples Mandarins and Sky Valley Heirloom Navels.

“At the moment, demand is extremely high because a lot of imports are coming in and citrus is a prized possession right now,” says Garza. “We’re hoping that will hold into the beginning of our navel season.”

Another California company focusing on the premium end of the market is Bee Sweet Citrus in Fowler, CA. The business, which offers oranges, lemons and mandarins, is this introducing a new premium line for customers featuring pomelos, Golden Gem grapefruit and Royal Red oranges; all specialty varieties.

While oranges, mandarins, and lemons have always been everyday household purchases for families, we’ve seen a growing interest in specialty citrus varieties during the winter and spring seasons.”
– Monique Mueller, Bee Sweet Citrus, Fowler, CA

“While oranges, mandarins, and lemons have always been everyday household purchases for families, we’ve seen a growing interest in specialty citrus varieties during the winter and spring seasons,” says Bee Sweet’s director of communications Monique Mueller. “During those months, our citrus varieties are in peak season, and there are various opportunities for shoppers to be creative with produce.”

SEASONAL OUTLOOK

In terms of its current season, which runs from October through to late May or early June, Bee Sweet Citrus sales representative Jason Sadoian says crops look to be normal following a slight drop in orange, lemon and mandarin volumes in 2023/24.

Headquartered in Delano, CA, Wonderful Citrus is of course best known for its Halos mandarin brand, but the company is also strong in seedless lemons — marketed under the Wonderful label — as well as grapefruit, navels and limes.

“Last season, we had a very nice season, all the way through to the beginning of June with a nice transition into the counter-seasonal program from the Southern Hemisphere to keep Halos on shelf 52 weeks a year,” says Wonderful Citrus’ senior vice president of sales, Dave Rooke.

As well as Halos and seedless lemons, Rooke says Wonderful Citrus grew in volume and market share in 2023, which has enabled the company to move forward with new innovations, including Organic Halos.

Wonderful Citrus also formed a partnership with Ventura Pacific, a lemon grower-packer in Ventura County, CA. “They’ve got about 6,000 acres of lemons all throughout districts one, two and three, and starting Nov. 1, we’ll be marketing their fruit,” says Rooke.

October is Wonderful’s main seasonal transition, beginning with navels, Wonderful seedless lemons and Texas grapefruit, followed by Halo mandarins in November, Cara Caras in December, and limes year-round. “Crop estimates are all positive, there’s more fruit available, size structure is more normal, and availability should be plenty,” says Rooke.

Citing data from analyst Circana, Cassie Howard, senior director of category management and marketing at Sunkist Growers, says season-to-date citrus at U.S. retailers is trending ahead of 2023, outpacing total produce and total fruit.

“There is a lot of buzz with growers, suppliers, and retailers anticipating a good season,” she says. This past season, we had to be nimble and adjust to what Mother Nature provided. We saw a very big swing toward large fruit, some of the biggest in terms of its share in recent history.”

Sunkist’s response was to expand its offering to fit the needs of retail partners through larger bag options and customizable merchandising. Given the presence of more USDA “choice grade” fruit, Howard says Sunkist also created more value-led deals for customers.

This season, after two years of rain, California drought conditions improved, and Sunkist expects the crop to be more traditional with smaller sizing.

INFLUENCING FACTORS

So, what is driving California citrus sales? With the 2024/25 season almost underway, Howard expects to see a strong showing from specialty favorites, in particular Blood oranges, Cara Cara (of which Sunkist is the largest supplier), and Minneola Tangelos from December, following Pummelos, Navel oranges and grapefruit.

According to Garza at Cecelia, some of the highest recent demand on the specialty side has been on Minneola Tangelos. “It’s a cross between a tangerine and a grapefruit with the tangerine sweet and the tart grapefruit, and I think it’s that mix of flavors that is driving demand,” she says. “It’s also a different-looking fruit and that might explain it as well.”

Mueller at Bee Sweet believes the biggest influencing factor is shoppers on the lookout for high-quality produce that’s fresh and adds value to their day. “While there’s no doubt that citrus fruits add nutritional value to someone’s diet, they also act as a healthy alternative for those looking for delicious, on-the-go snacks,” she says.

“It starts in the field and farming. If the fruit is good-looking and eats well, it will sell. Farmers play the biggest role,” adds Mueller’s Bee Sweet colleague Sadoian.

According to Garza, as well as eye-catching packaging, having a positive reputation is also important. “If you go to a store and buy a great-looking orange, take it home and it tastes delicious, although there might have been a cheaper orange, people are willing to pay more as long as they know it’s going to be good.”

Rooke says mandarins and limes are helping drive Wonderful Citrus’ sales, while its Seedless Lemon brand looks to be performing above generally flat lemon sales. “Mandarins have done well, they’re up about 20% for the summer; limes continue to be on fire, they’re up 25% over the same timeframe, so those two citrus varieties are growing very nicely,” he says.

“Lemons tend to be flat, but Wonderful Seedless Lemons have been driving a lot of growth in the winter season. Navel oranges and grapefruit are definitely off a little bit. My sense is that some of the decline could be attributed to lack of supply.”

But where citrus is doing better, Rooke says is due to a combination of snacking, convenience and high quality. “Those three things are all things we see consumers looking for: better-for-use for snack opportunities — Halos are a great snacking item — plus consumers are really drawn to products with high vitamin C, which citrus naturally has,” he continues.

The company’s Sweet Scarlett Texas grapefruit has an “above-normal, high-quality” standard, according to Rooke, which it has been able to use as a differentiating factor. “We do believe quality matters and quality sells, and when a consumer has a good experience with your brand, and it resonates with them, they’ll come back and buy it,” he says. “We see the adverse effect of poor quality on the shelves where we really start to see a decline in the industry, and it really hurts the category as a whole.

“I firmly believe consumers will pay a premium for the right quality and the right product offering. A perfect example is the Wonderful Seedless Lemons and the price premium we’ve seen at that level.”

PACKAGING & MARKETING

The key to driving citrus sales is being creative in your approach to marketing, according to Garza. “Creativity and curiosity lead to increased demand — if you have someone with some type of creative marketing or a phrase that goes on the bag, it’ll spark curiosity, which leads to increased sales for the retailer and goes down the totem pole,” she says. “You’ve got to have marketing that catches the eye, and you’ve got to grasp these customers — strategically!”

With limited floor space often being a challenge for many retailers, Howard says Sunkist will be promoting new, space-efficient displays that are engineered to fit seamlessly into any store layout. The company will also be providing new grower bin headers that allow shoppers to meet the people behind the hard work that goes into growing the citrus they see in stores.

CHALLENGES

For Garza, robotics presents the best, most practical solution for dealing with the labor shortage at all levels of a citrus operation. “A lot of people are leaning toward robotics, from the field to the packaging,” she says. “Implementing robotics, like drone mapping and spraying machines, and even baggers, is essential. It’s definitely helping costs down for suppliers, which will hopefully bring the cost down to consumers.”

As a staple during the holiday season, Howard says health and wellness are top-of-mind for consumers when it comes to citrus purchases, given the category’s positive benefits for everyday health. “As we head into the spring, consumers start to hit the grill, and citrus remains an important part of consumers’ basket spending throughout the summer months,” she says.

In the opinion of Rooke at Wonderful Citrus, the citrus category as a whole has been over-saturated and over-supplied in a lot of areas, which in turn has put a lot of pressure on growers and shippers. “If you have to lower price for a sale, it’s hard to reinvest that into optimal varieties or marketing investments,” he explains.

To thrive in such an environment, Rooke says the company has tried to focus on what it calls “the Wonderful experience,” which can be defined as “creating value beyond the product.”

“We’re here to sell product — we grow, ship and sell citrus items — but at the end of the day, if we’re not selling a different experience, if we’re not creating value outside of just the products we sell, we’re going become commoditized with every other grower-shipper,” he argues.

Rooke says the “Wonderful Experience” consists of a higher level of customer service, higher quality standards, and product innovations. In a business that is commoditized, he believes going the extra mile is essential for a company like Wonderful Citrus to be able to continue to differentiate itself.

Such a focus comes amid a backdrop of rising costs across the board for growers and shippers, whether that be agrochemicals, labor or water, not to mention packaging materials, transport and other inputs.

Rooke, who says Wonderful Citrus has “felt significant input cost increases,” admits that many retailers push back on any proposed changes to pricing due — in some cases — to a lack of awareness of the situation on the ground.

“It makes it hard in a highly commoditized space where some of the citrus varieties that we sell could be oversupplied,” says Rooke. “Oftentimes, people are selling them below total farming costs. There’s a significant amount of pressure on the costing for sure, and we have to figure out how to balance the equation.”