Limoneira Company to sever ties with Sunkist Growers, Inc.
By Peggy Kelly
Santa Paula News
Published: August 06, 2010
The Limoneira Company is going it alone come November 1 when it will sever its ties with Sunkist Growers, Inc., opting instead to do its own sales and marketing after a 100-plus-year relationship with the cooperative.
The two companies were formed in 1893 and had common founders. Limoneira left Sunkist in 1902, but returned three years later. Sunkist is a cooperative marketing association that represents growers in California and Arizona.
Limoneira President/CEO Harold Edwards said the company had evaluated its relationship with Sunkist on a daily basis, “something we’ve been doing historically,” and “the main impetus” to going it alone is “the world has really changed” and the industry fragmented by international imports. “We’ve been very loyal to Sunkist for more than a century, but the influence that Sunkist has in controlling the supply side is very limited, much lower than 100 years ago and lower than even 10 years ago.”
Edwards said the shift to its own sales and marketing will directly link Limoneira to its customers. “You’ve heard the old adage the customer is king? We felt in order to respond to the needs and wants of our customers our fruit should go from our trees directly to them,” without the blending of different growers marketed by Sunkist.
Edwards said the company’s assets are in a position “to do a great job in taking that step to market and sell directly.” Limoneira will be adding employees for marketing and sales, an expense that will be shifted from what was paid to Sunkist.
“When you add it all up we pay approximately $1 a carton for marketing” and other cooperative services. “Multiple that by the 1.3 million to 1.5 million cartons we sell every year,” going in-house already has a robust budget, said Edwards.
“That will be our budget and we look forward to marketing and selling at that same cost or even lower. And when we go directly to customers we will be able to ensure our customers exactly what they get.” And “Given all the incentives” Limoneira has taken to save power with its acclaimed solar orchard, reduction of water use through Agromin-partnered mulching programs, and decrease of pesticide use through the use of beneficial pests, “We believe we are a more relevant, better choice for our customers.”
Because of such efforts, Limoneira Company is currently the only Good Agricultural Practices (GAP) lemon shipper in the nation; and because of the rating and its highest ranking for food safety, “We can sell our lemons anywhere in the world. And, the response from our customers has been excellent!”
The relationship with Sunkist will end November 1, the start of the 2011 crop year.
Grower Bill Orcutt of Santa Paula said the shift wouldn’t really affect his 20-acre lemon orchard. “As far as the business angle goes, I’m just sitting back and waiting to see what happens... it’s cutting out the middle man, which is probably a good thing” for the grower, who sees a scant few cents profit from every dollar in sales. “Oranges and lemons are the same price today as in 1941,” and, noted Orcutt, “I can see now why my parents lived better than I do!”
Overall, Edwards said Limoneira’s relationship over more than a century has been “excellent and very profitable, not just with us” but also with other Sunkist members. “Our decision is not any disrespect to any of the other growers or Sunkist... we have achieved such success” that this business move in a new direction will prove to be “relevant to our customers,” and not compromise the cooperative or its members in the lemon hungry world.
“Now,” Edwards noted, “we’ll be a friendly competitor and we’ll work together as we make sure the industry grows, which is in all our best interest.”
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