Florida Citrus Mutual Triangle Column – June 5, 2020

By Ned Hancock, Chairman of the Florida Citrus Commission

Over the past several months, we have witnessed drastic shifts in consumer behavior. As the country slowly begins to reopen, we can expect shopping habits to continue to evolve. With a new season ahead of us, we have an opportunity to not only adjust our marketing approach to fit the needs of the ever-changing consumer but also best support the Florida grower.

Now, more than ever, Florida growers would benefit from the promotion of NFC to increase consumer awareness of orange juice and support the entire orange juice category. Sales of NFC at retail increase the demand for Florida oranges, which, in turn, provide the best returns to growers. Yet, there has been a gradual decline over the last several years in the average number of NFC items carried by retailers in stores across America. A decline in the number of UPCs on the shelf is tantamount to a decline in the demand for Florida fruit.

A contributing factor to this decline in the category is the average increase in the price of NFC OJ over the last decade. The price of NFC OJ has increased at retailers by nearly 3 percent, on average, each season. The average price per gallon of NFC orange juice that American consumers are paying for NFC today is 30 percent higher than it was a decade ago.

This is three times the average price increase for Recon over the last decade with Recon prices on the decline over the last two seasons.

These trends are concerning and have a direct impact on Florida grower returns. It is highly unlikely we will see a reversal of these trends without action. We need concerted efforts to drive sales at retail with marketing programs that highlight the premium quality of NFC Florida Orange Juice.

At the May Citrus Commission meeting, Commissioners requested the FDOC staff put forth four different tax rate scenarios for processed orange.

Those scenarios, outlined below, include the assumption that the FDOC will receive $5 million in General Revenue from the state to support domestic marketing programs in 2020-21.

At $.07 with full use of planned spend down of fund balance, the total domestic marketing budget is $8.9 million. At $.12 with no use of fund balance, the budget is $10 million. At $.12 with full use of fund balance, the budget is $12 million. At $.15 with no use of fund balance, the budget remains at $12 million.

For reference, the 2019-20 budget allocated $5.7 million for domestic marketing, including $935,000 in General Revenue from the state.

An increase in the marketing budget in all scenarios will allow Edible to extend e-commerce programs with retail partners to cover the full year as well as deliver issues management, earned media, influencer outreach, Search Engine Optimization (SEO), social media, web, digital and video displays and content creation that support driving sales.

Additionally, at the $.12 tax rate without fund balance, Edible will broaden the target audience, customize content for specific segments of consumers, increase earned media outreach and further expand e-commerce programs and partnerships. At the $.12 tax rate with fund balance and the $.15 tax rate without fund balance, Edible will increase national e-commerce programs while adding regional components and further broaden the target audience in order to reach more consumers with our messages.

The current marketing program aimed at driving sales of 100% orange juice continues to perform well. Since its launch in January, the e-commerce program has driven more than $4.05 million in attributed sales of 100% orange juice, reached 294 million impressions and provided a Return On Ad Spend (ROAS) of $4.37. Overall, the program has helped move more than 1 million units of 100% orange juice and supports continued consumers’ awareness of orange juice to drive repeat purchases.

While I had hoped the last Florida Citrus Commission meeting of the season would end with us together in one room, we have decided it is in the best interest of all for the June meeting to again take place via video conferencing through ZOOM. Join us on June 17 at 9 a.m. The agenda and additional details will be available at FDOCGrower.com in the coming days.