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21/12/2010 - Lack of fruit limits the supply of ready to drink juice

 From January to October this year, sales of ready to drink juices grew by 19.3% in volume and 22% in revenue, according to Nielsen. The rise was expected by the industry but not with such intensity. After being caught by surprise by the sales peak and the lack of cans at the end of 2009, most of the producers of ready to drink juice invested to increase their production capacity. Today there is another bottleneck: the production of fruit. Consequently some juice flavors are becoming scarce at retail – mainly orange and grape.

"When we place an order, the amount is supplied, but not the assortment of flavors. The most popular favors, orange and grape, are the scarcest ones" says the director of a large supermarket chain.
Most fruit farmers suffered crop failure this year because of the climate. The 2009/2010 orange harvest will total 292.7 million boxes (40.8 kilos each), according to the National Supply Company. The amount is below the most pessimistic estimates of the market, which forecasted a production of more than 300 million boxes.

Grape production has fallen 30% in São Paulo. In Rio Grande do Sul, grape harvest grew by 3.9% this year compared to 2009 totaling 480.2 thousand tons, according to preliminary data from the Brazilian Wine Institute (Ibravin). However sales of grape juice have grown 22% from January to October over the same period last year and totaled 24.9 million liters. "The problem is that the grape available is of poor quality," says Isael Pinto, president of Grupo GB, owner of the brands Camp and Top Orange. "Five kilos of grape were necessary to make a kilo of pulp. With this year’s crop eight kilos of fruit are required to make a kilo of pulp," he says.

Producers of cashew nuts are going through a similar situation. The fall in the harvest of Ceará, the largest domestic producer, is estimated between 30% and 50%, according to the State Institute for Technical Assistance and Rural Extension (Emater). Last year, 130,000 tons of fruit were harvested. This year, the most optimistic views forecast 91,000 tons.

There was also a lower production of peaches. The fruit for making juice is imported from Chile, where the crop has suffered from the earthquake earlier this year. "We are already suffering from lack of fruit and the way it is, there will be shortages," says Isael Pinto. "The largest juice companies have signed a contract to supply concentrated juice too processing companies, such as Citrosuco, Cutrale, Golden and Tecnovin," said the Chairman of Grupo GB. "They will have priority in the supply because they buy in larger scale. But smaller producers will not get enough supply of the fruit" he says.
Supermarkets in São Paulo, according to the Paulista Association of Supermarkets (Apas), have plenty of juice. "There is not the same variety of flavors though," says Martin Moreira Paiva, vice president of the organization. "The consumer of juices is more flexible and less loyal to brands than consumers of soft drinks, for example" he says. "If a flavor is not available, they buy another one."

"The consequence of this lack of flavors will be an increase in the price. Between 5% and 6%, according to producers. This year, by the end of October, juice in retail had already accumulated an increase of 7.68%, according to the Consumer Price Index (IPC-Fipe).

At Wow! Nutrition, owner of the brands Sufresh andFeel Good, in addition to the rising demand and lower supply of fruit, there were problems with the installation of new machinery to increase the production capacity by 30%. "

"After the installation, the machinery did not work as they should and our production was lower than expected during August and September. This is the price for growing" says William De Angelis Sallum, president of both the company and also the Brazilian Association of Producers and Packers of Nectars and Juices (Abrasuco).

With their production affected during these months, retailers suffered with the lack of products between October and November. When contacted, Coca-Cola Brazil, owner of the brand Del Valle, gave no interview.
Apex Ibravin Estado do Rio grande do Sul
Alameda Fenavinho, 481 - Ed. 29 | Cx. Postal 2577
Bento Gonçalves - RS | 95700-000 | Phone: 55 54 3455 1800
contato@sucodeuvadobrasil.com.br
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