Written by The Business Journal Staff
Citrus farmers, including Sunkist members, had a phenomenal year in 2014.
Unfortunately 2015 was no repeat, as reported by Sunkist Growers in its annual report released in recent days. The cooperative held its annual meeting Feb. 17 in Valencia announcing its sixth-straight, billion-dollar revenue year despite a drop in both domestic and export citrus sales.
Total revenues reached $1.15 billion in 2015 after a record $1.23 billion in 2014. The big hit was in export sales that declined to $242 million from $305 million the year before — about a 20-percent drop-off. Domestic sales fell to $712 million from $739 million in 2014.
A big drop in citrus exports in 2015 was the result of compounding negative factors including the port strike in early 2015 followed by a Chinese ban impacting all citrus shipments from Tulare County that lasted for six months. The ban was due to a find of brown fungus in some shipments.
Tulare County accounts for about half of all citrus exports in the state and is the home to many top Sunkist growers and leaders.
Despite the tougher times, there was some good news to report. For the first time in Sunkist’s history, the organization issued grower payments of more than $1 billion for the second consecutive year.
“Sunkist has made many advancements to keep the cooperative well-positioned in the current business environment, and last year’s results demonstrate the positive impact of those improvements,” Sunkist President and CEO Russell Hanlin said in a statement.
Notable changes in the past few years include the implementation of the cooperative’s grower distribution program.
“We made our third distribution to growers in 2015, and are committed to increasing these distributions annually,” Hanlin added. “This program was accomplished through an effective cost-containment plan and revenues from our for-profit businesses.”
Sunkist’s juice processing joint venture with Ventura Coastal in Tipton has yielded positive results for the organization. Now in its fourth year, the business partnership continues to generate improved by-product earnings, more timely payments and greatly contributions to grower distributions. Sunkist’s robust licensing program and global sourcing business is also advancing. With 49 licensees in total, the Sunkist brand is used to market approximately 700 products in 77 countries.
“All of these businesses continue to contribute to positive revenue streams and also help strategically position Sunkist for future growth,” Hanlin said.
Looking ahead, Sunkist’s report says, “No season is without its challenges, and the enduring drought, anticipated storms from the upcoming El Niño, and serious pest and disease risks are formidable threats to our industry in this upcoming year and beyond. In coordination with government and industry groups, Sunkist’s Board and management remain dedicated to finding solutions to overcome these issues and continue our legacy as the leading brand for California and Arizona fresh citrus.”
New chair is a local
As his term as chairman of Sunkist’s board of directors comes to a close, Mark Gillette’s contributions were recognized during the meeting. The Dinuba grower — president of Sunkist affiliate Gillette Citrus Inc. — served as chairman for five consecutive terms, which is the maximum time allowed under Sunkist by-laws.
Gerald Denni, general manager of Golden Valley Citrus Inc. in Strathmore, and co-owner of Mittman-Denni Citrus Management, was elected to his first term as chairman following the meeting.
“We are excited about the fact we have eight new members on the board — younger growers who are taking a leading roll,” Denni said.
Asked about co-ops growing acreage of organic citrus, Denni notes growing navel oranges organically is not an easy task. ”Sunkist was one of the first to grow organic oranges,” he said, adding that organic citrus is now found in a wide number of supermarkets, “not just at Whole Foods.” Denni’s Strathmore ranch has 750 acres of organic citrus.
Another significant event for the cooperative was Sunkist’s headquarters relocation to Valencia in 2014, which strengthened Sunkist’s financial position and also geographically centralized its business operations to the cooperative’s grower base.
“The positive changes and growth we have achieved in recent years have been accomplished with the leadership and dedication of Sunkist’s board of directors, chaired for the past five years by Mark Gillette,” Hanlin said. “His commitment and leadership has been instrumental to our organization, and we are thankful for his valuable contributions to Sunkist.”