Although commercial orange juice production in Brazil started in the 1920s, it acquired an industrial scale only in the 1950s, enabled by the development of frozen concentrated orange juice (FCOJ) technology in 1947. Brazil now dominates world orange juice production.
The country’s main ‘Citric Belt’ production area is in São Paulo State and the western portion of Minas Gerais State. Other production is located in the north east region. According to suppliers, 2014 was a difficult year for citrus production because of drought, disease, and increased input costs. Consequently, industry body CitrusBR reported that last year’s exports fell by 15 per cent in volume and 18 per cent in revenues. Europe, which buys around 70 per cent of Brazilian orange juice, had a decrease of 21 per cent in juice shipments.
According to Eurostat, in 2014 European orange juice import volumes from Brazil totalled more than 1.8 million tonnes (around 90 per cent of all orange juice imports). The UK volume was just under 400,000t, with most of this forwarded from Belgium, the Netherlands and Germany.
Juice processors are careful to use all the fruit. For example, Citrosuco declares that it splits the orange as 49 per cent citrus pulp pellets (CPP), 46.5 per cent juice, 1.5 per cent (frozen) pulp, 1.5 per cent oils, one per cent d-limonene, and 0.5 per cent essences. Of these, pellets will go into animal feedstuffs; oils and d-limonene into cosmetics, fragrances and cleaning products; and essences into fragrances and food products.
Brazil’s industry now has three leading actors: Citrosuco (partly-owned by Votorantim); Cutrale (headed by José Luis Cutrale); and Louis Dreyfus (the global commodities processor and trader). Smaller companies such as Atlantica Foods are also involved. Interestingly, Cargill left Brazil’s orange juice sector in 2004, when it sold its operations in separate transactions to Citrosuco and Cutrale.
Taking the Louis Dreyfus Brazilian operation as an example, the company has juice plants at Bebeduro, Matão, and Engenheiro Coelho in São Paulo State; and at Rolândia and Paranavaí in Paraná State; as well as having its port facility in Santos.
Over the past 50 years, Brazil’s juice exporters have developed a sophisticated lean outbound supply chain, although, as one industry professional observes, “they only ship because they have to” in order to reach their main markets in Europe and the USA. The Brazilian terminals are located in the port of Santos, some 80km from the city of São Paulo, and receive product from the juice plants in the interior by a virtual conveyor belt of stainless steel road tankers.
The ocean freight connections employ refrigerated vessels operating under a variety of contractual arrangements. Citrosuco has its own fleet of six vessels; Cutrale has vessels managed by Switzerland’s Atlanships; and Louis Dreyfus buys space on third-party vessels. Specialist bulk carriers include Gearbulk, with its four combination carriers deployed in these trades, shipping up to 400,000t of orange juice each year from Brazil to Europe and the USA.
The MV Carlos Fischer is a good example of the ships involved. Owned by Aleuropa (part of Grupo Fischer) in Hamburg, it is over 200 metres long and has a cargo capacity of up to 37,000t. It is effectively a four-hold refrigerated vessel, each hold having four vertical free-standing cylindrical fruit juice tanks. These tanks are supported and braced within each hold and are designed to enable complete discharge. The tanks in the aft hold are reserved for natural orange juice carried at a nominal zero degrees, while those in the other holds can carry either natural juice or concentrated juice. Frozen concentrate is loaded at -10 degrees and has the consistency of a gruel.
The European terminal network is strategically located to serve the needs of industrial packers and processors. Cutrale’s continental juice operations are based in Rotterdam and Avonmouth; while the Citrosuco and Louis Dreyfus terminals are both located in Ghent. These locations in turn support a wide network of other actors, such as PepsiCo’s Tropicana operation at Zeebrugge (served by Citrosuco’s vessels) and HIWA’s fruit juice and concentrate storage and processing operation in the Port of Rotterdam that is situated near the continental juice facility.
The terminals in Belgium and the Netherlands are obviously well-placed to serve the food and drink industries across Europe via truck, train or barge; the UK being connected by transport links such as the Ro-Ro ferry services coming into Purfleet and Tilbury. In addition, Cutrale’s Avonmouth terminal – which received its first consignment of 8,000t of orange juice concentrate in late 2002 – supports industrial customers in the west of England such as Gerber’s and Princes, who process and pack both branded and supermarket own-label products.
Juice jargon
FCOJ: Concentrate orange juice that is shipped frozen.
OJC: Concentrate orange juice that is sealed in an aseptic container and heat sterilised. On arrival it is re-constituted with water and packed.
NFC: Not from concentrate. This can be either pasteurised, frozen or aseptically-packed before shipping.
Freshly-squeezed juice: Produced directly from fruit in the final market.
Brix values: Freshly-squeezed juice and NFC juice typically have Brix values of 11-12 degrees; while the concentrates will be between 65-66 degrees. FCOJ can last for up to 36 months, NFC for up to 18 months, and freshly-squeezed 1-2 weeks, all dependent on having the correct temperature regime.
Trendwatch: The future of juice
• Changes in consumer taste and preferences. Consumers may be less sure about fruit juice from concentrate, and in any case are increasingly drinking alternatives to orange juice
• Global actors driving drinks innovation include PepsiCo (sourcing other juices in Brazil); and also WILD (now part of ADM), and Dohler in Europe
• Brazil’s leading actors are themselves diversifying: Louis Dreyfus has a broad drinks platform in any case; Cutrale has not only bid for Chiquita but is also in other source markets like Turkey
• New players such as Atlantica Foods who were exhibiting at Anuga in October, alongside major actors such as Citrosuco and Louis Dreyfus, are emerging
• Brazil itself is having problems on the farm and in the market place. As CitrusBR executive director Ibiapaba Neto notes: “Unfortunately the sector continues to decrease, due to competition with other drinks in the international market.”
Andrew Morgan is the director and Patricia Salume is an associate at Global 78, the independent research and consulting practice that specialises in mapping and improving food and beverage supply chains.
