For the fifth year running the Juice Summit brought together representatives of the global fruit juice industry in Antwerp, delivering yet another stimulating and topical conference.
The Juice Summit has quickly built a reputation for providing the essential international forum for the juice industry to meet and discuss and learn about the issues of the day. The 2017 Summit was no exception. High calibre speakers from across the European and international fruit juice sector shared their vision of the future for the fruit juice industry, covering a wide range of topics of concern and interest to the delegates. These included a detailed session on the dynamics of the global fruit juice market, the effect of digitalisation on the industry and the ever-present topic of Brexit.
Here Fruit Juice Focus takes a brief look at a selection of the sessions from the two days.
Corporate social responsibility (CSR): an importers perspective
More and more companies across all industry sectors worldwide are introducing CSR strategies. The juice sector is no different and Don Giampetro, iTi Tropicals Vice President for innovation and quality presentation ran a session at the CSR stream at the Summit, taking the audience through the definition and history of CSR with examples and how iTi Tropicals were handling their CSR programme. Don kicked off with a definition of CSR: a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. The component parts of a CSR programme cover the environment, philanthropy, ethical labour practise and volunteering. Did the audience know that 91% of companies consider CSR when making purchasing decisions? Case studies revealed disturbing facts that highlight the need for a cogent CSR strategy in companies. For instance in one working environment case study employees were drinking unsanitary water, some were sexually harassed, some were earning 60% of the legal minimum wage and some were exposed to toxic pesticides. The list went on. The Washington Post had reported back in 2015 that ‘tethered monkeys were bred and trained – often with punishment to harvest coconuts’.
Don explained how important it was that the ‘monkey’s harvesting coconuts’ piece from the Post was addressed by iTi Tropicals and he presented a copy of a statement from one of their processors that is sent to all customers as reassurance and proof that iTi’s processor base do not participate in such a practice. The iTi processor statement read: ‘To Whom It May Concern, We do hereby guarantee that The Sambu Group does not use any animals including monkeys in the harvesting of coconuts from its plantations for all coconut products we manufacture. All harvesting, planting and maintenance of the coconut plantations use human labour.’
Mr Giampetro took us through iTi’s CSR commitments as an example of what needs to be done. This included education programmes for farmers to optimise agricultural practices, the creation and treatment of wastewater ponds, subsidised health plans, annual donations to local communities, help to build schools and provide educational equipment and funding life-saving medical treatments. iTi also required that its processors had, amongst other things, no child labour or slavery and no bribery and corruption and that they adhered to the iTi code of conduct.
Social Audits are becoming more and more critical and important, Don added, in providing proof and details that proper practices are being implemented and documented. The Social Audits show and prove that things are actually being done – it is not just talk.
A history of success in supporting the Brazilian citrus growers (CSR)
Antonio Juliano Ayres, General Manager at Fundecitrus, reminded the audience just how large the Brazilian citrus industry is within global citrus production. There are 140 citrus producing countries in the world of which 70% of the total production is concentrated in China, Brazil, US and Mediterranean countries with Brazil being the main orange juice producer. Within Brazil, Sao Paulo state is the centre of OJ production and boasts the best soil, good ports and roads, history of research and industry knowledge. Orange juice yields have risen by over 200% in the past 25 years to 970 boxes/hectare, whilst the area of bearing groves per 1000 hectares had decreased by 50% in 20 years.
Figures from Antonio demonstrated Brazil’s dominance as a global supplier in the orange juice business with Brazil’s share of the world’s total orange production standing at 38% and orange juice at 65%. The country took a 78% share of the world’s international trade in orange juice with domestic consumption at 4% of output compared with 96% for export. All for the period 2016/17.
Fundecitrus is very active in helping growers in educating and preventing the spread of the HLB disease. Interesting comparisons were made between Sao Paulo and Florida in the US where there was only a 17% incidence of HLB infected trees in Sao Paulo compared with a 90% incidence in Florida. Fundecitrus attribute some of this success in containing the disease to the measures they have introduced including the ’10 commandments against HLB’ which include controlling the vector, eliminating symptomatic trees, new planting systems, working with neighbouring farmers and regional management control. Antonio wrapped up the session by acknowledging the success of Fundecitrus was down to their involvement with all areas of the community from government departments and research institutions to technicians, agronomists, consultants and the growers themselves.
Dynamics of the global fruit juice market
Philip Coverdale of Global Data concentrated on two key areas of interest for the Summit audience, the global performance of juice and nectars and top trends impacting the industry. Global Data’s research revealed that in the EU fruit juices and nectars are declining – down 2.4% against 2015/16. But on the positive side leading brands are realigning themselves to maximise the opportunities that changing consumer trends are bringing to the market and they are concentrating on delivering real value growth. Performance during the period 2015/16 show that by volume chilled juices are on the rise, up 4.8%, and ambient juices are down 4.3%. During the same period not from concentrate volumes have risen by 5.3% with from concentrate falling by 4.9%. The research showed that the premium end of the price spectrum of the market is strongly on the increase with France and the UK showing cumulative annual growth rates (CAGR) increasing by 14.2% and 10.3% respectively for the 2014/16 period.
Moving onto trends the report made some interesting observations. Using the terms raw, clean and pure on your packaging is a must if you want to appeal to consumers purchasing soft drinks in todays’ health conscious markets noted Philip. The term ‘cold’ also creates a feeling of a more natural product as in cold pressed juices. The research highlighted the fact that 76% of consumers were more likely to purchase drinks that were good for digestion and gut health. Alcohol avoidance amongst all age groups, barring the over 65’s, has led to increased demand for more adult soft drinks and marketers should be encouraged to promote their juices as a creditable alternative to alcohol. The session also touched on the point that the inclusion of spicy and savoury flavours in drinks would appeal to the health-conscious buyers especially those containing ginger, cinnamon or turmeric.
Plant power is the buzz word these days with brands looking to maximise sales by aligning their products with plants and botanicals. In an ever more competitive market brands must capture the shopper’s attention within a split second both online and in the supermarkets with exceptional design and packaging.
Adding value to juice through digitalisation
Tetra Pak’s Giulia Pelliccioni brought the Summit up to date on how digitalisation is adding value to the juice market. According to Giulia, the research firm Kantar TNS tells us that there are now 3.6 billion people worldwide who are deemed as being part of the connected community. Of these, 58% engage with brands online, 48% share opinions about brands and products on social media and 38% buy soft drinks online. Within this large group of connected consumers, “Leaders“ and “Super Leaders” are the most active on social media with the most influence and engagement with brands. It’s all about reaching and engaging with the ‘Leaders’ and ‘Super Leaders’ and brands recruiting these online influencers to promote or share their products are seeing increased web traffic, social media chatter, YouTube viewings and sales. Juices and beverages are the most searched for category when Super Leaders are interacting with food and drinks brands online. Giulia explained that for the consumer, the traditional customer journey is moving away from a linear model to a new ‘distributed value network’ where, because of social media and online interaction with the brand at every stage in the lifecycle, the consumer is central to all aspects of the route from raw materials through to consumption. Whereas before, products would not touch the consumer until marketing campaigns, product placement and subsequent consumption of the juice occurred.
Packaging in the digital environment is playing an even more important role adding value at every touch-point with the consumer. From research – where a prospective purchaser views the products online and the visual presentation plays a key role in getting the order – to unwrapping and consumption, which can be an even more pleasurable experience when the packaging is innovative and reinforces the consumers view of themselves, through to sharing this satisfaction with online communities.
Francoise Sonneville from Rabobank’s Food and Agri Research team discussed the impact of Brexit on the food and drink and fruit juice industry concluding that although talks between the UK and the EU were well under way there were no obvious outcomes in view yet. It was felt that in the fruit juice sector, Brazilian orange juice and Chinese apple juice concentrate could end up being either winners or losers depending on the final terms agreed between the UK and these two countries, and Spanish orange juice and Polish apple juice may possibly face damaging tariffs. A final point concluded that possibly redesigning value chains and moving closer to the consumer could reduce the impact of Brexit on buyers and sellers.
Organic 2017: from roots to suits
This session from Ronald van Marlen of Toppas Organic Serbia looked at organic food sales in recent times. Research projected that, across selected European countries, organic foods distribution would grow by 10% each year for the next 10 years and the USDA reported that organic food sales has outpaced growth in organic farmland since the late 1990s. Ronald explained that against a backdrop of uncertainty and crisis in the world, changes in the way the organic movement and systems worked are in need of change to meet the demands of the changing social and environmental landscape.
Ronald went through the four basic principles of organic, namely health, ecology, fairness and care and then illustrated the presentation with details of the top multinationals and their stance on organic and GMO. He looked at which companies own the organic space, distribution and retail and the structure of the seed industry. Ronald then did a profile analysis on who was buying organic – the ‘cultural creatives’, touching on their values such as the love of nature and a deep caring about its destruction, authenticity – ‘walking the talk’ and wanting social transformation and change. Ronald finished with some tips and tricks for the organic sector one of them being aware of developments in pesticides residue.
The juice supply chain – orange
Larissa Popp Abrahão, International relations director of CitrusBR (the Brazilian Association of Citrus Exporters), outlined the association’s work and how its membership was primarily the three main citrus producers in Brazil, Citrosuco, Cutrale and LDC Juice (a Louis Dreyfus Company). Following recent research by CitrusBR, Larissa disclosed the latest figures on orange production across the citrus belt in Brazil which showed that although the crop was estimated to be bigger this season (2017/18) it was still not enough to recover four years of lower crops. The current crop should be in the region of 374 million boxes against 245 million boxes for 2016/17. Frozen Concentrate Orange Juice (FCOJ) production in Sao Paulo mirrored this increase with the figure of 1.176 million tonnes (66 brix) expected for 2017/18 – the highest since 2012/13 when production stood at 1.288 million tonnes. Conversely, 2017 saw a very low carry-in of just 107 000 tonnes against highs in 2013 of 766 000 tonnes. Expected carry-in for next season is expected to be in the region of 207 600 tonnes (estimated before the effects of hurricane Irma had been factored in).
Larissa said that São Paulo is a hub for innovation naming it the Agtech Valley – the Silicon Valley for Agribusiness – with entrepreneurs in Brazil flocking to the area to create start-ups. There followed a review of the situation in Florida where production has decreased more than demand and is unlikely to recover in the mid-term due to hurricane Irma and the ongoing problems with greening disease. Larissa concluded that orange juice is a great product and still has a bright future thanks to companies and industry associations pulling together to face the challenges – the Fruit Juice Matters initiative being a case in point.
Introducing his presentation on Lemon Trends, Santiago Martinez highlighted the fact that different customers were moving into lemon with lemon juice now being used more widely in a number of different ways. Citric acid was now being replaced by lemon juice as an acidifier in more and more products with the result that lemon juice is moving to the top of the ingredients list featuring on the front label. Examples of lemon juice being used as an acidifier is juice blended drinks where lemon juice concentrate is being used for tartness and in other products such as yoghurt. In non-alcoholic beverages lemon is considered to add the refreshing character to herbal, vegetable and fruit beverages and stands third behind orange and apple in the table of strongest flavours in non- alcoholic beverages last year.
Mr Martinez provided us with an overview of world lemon juice supply for the period 2016/17 confirming that Argentina is way ahead at 61% leaving the nearest country, Spain, trailing at just 15%. Santiago pointed out that 75% of Argentina’s fruit harvest goes to industrial use whereas this applies to only 35% across the other main sources of supply and that small fresh fruit exporters are losing ground and share to the big producers. The prediction was that demand for lemon juice will continue to grow and diversify into new usages and that new trends and changing consumer habits call for higher standards of fruit production and juice processing. It is expected concluded Santiago, that only processors that can meet these new standards will be capable of supplying lemon juice for the front label.
Speakers can be contacted through the AIJN at www.aijn.org
Pictures courtesy of AIJN/Erik Luntang