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Rising orange juice prices press brands to innovate

Supply constraints, crop disease, high prices, and changing consumer preferences are hitting the orange juice industry. Manufacturers are responding by turning to alternatives like functional formulations.

Orange juice prices hit an all-time high in 2024, squeezing margins and challenging the industry to innovate.

The alarm bell sounded in May of this year, when Fundecitrus, an association of citrus growers and juice manufacturers from São Paulo, published a report detailing how Brazil, the world’s largest producer and exporter of orange juice, is forecasted to produce 232.4 million boxes of oranges in the 2024 to 2025 season — a 24% decline from the previous cycle, and its lowest level in more than three decades. The drop, driven by extreme weather conditions and citrus greening, has led to high prices that are expected to persist.

40% of Brazilian plantations are affected by citrus greening

Citrus greening, also known as huanglongbing or yellow dragon disease, is a bacterial infection that affects citrus plants. Andrés Padilla, senior analyst at Rabobank Brazil, spoke on the Liquid Assets podcast about RaboResearch’s report Global Orange Juice Outlook 2024/25. Padilla said that once a tree becomes infected with citrus greening, it will usually die within a few years. While the disease does not pose a threat to human or animal health, it has no cure.

The disease also causes bitter, stunted fruit, severely impacting orange production in Brazil. Padilla said: “The droppage rate increases significantly, so those fruits are going to be less ripe and smaller, and then production declines until it's not economical anymore.”

Around 40% of Brazilian plantations are affected, and the situation is only worsening, according to RaboResearch’s report. Padilla added that in 2023, 38% of Brazil's citrus trees had greening, a 50% jump from the previous year.

Farmers are incentivised to harvest early to combat the disease, which has complications, including reduced juice yields and affected fruit quality. This is particularly problematic in smaller groves that have limited resources to remove infected trees. This not only poses a problem for the affected farmer; when left untreated, the infection can spread to neighbouring plantations, Padilla added.

Given the current rate of disease spread and climate volatility, restoring normal stock levels in Brazil will require several consecutive good harvests, which are unlikely.

Brands will need to innovate to stay competitive in the market

Citrus greening is not the only challenge facing the juice industry. Orange juice sales have been in decline for years. In the US, for example, since 2010 retail orange juice sales have been plummeting year-on-year – with the exception of 2020, when the COVID-19 pandemic caused a short-term spike in sales due to consumers seeking ways to boost their vitamin C intake. In 2024, sales were down 11.6%, according to the Citrus industry.

Orange is not the only fruit taking a hit. The broader juice market is also being shaped by consumer health concerns, economic pressures, and sustainability trends.

According to market intelligence company Mintel, there are ways brands can navigate the evolving market landscape and stay ahead of trends. For example, brands may have to look further afield to functional aspects and other innovations.

Consumers want low-sugar, low price point, alcohol-free, sustainable formats

Consumers, driven by health trends, are looking for low-sugar options and non-sweet flavours, which Mintel says creates opportunities for brands to extend their offerings to night-time drinking occasions and those looking for alternatives to alcoholic beverages. These offerings could be in the form of fruit juice, juice drinks, and smoothies with spices or botanical flavours.

Functional claims were also featured prominently in new product launches in the juice category between 2020-2023. Immune support is one such claim, which is becoming increasingly important to today’s consumer. One example is the 2024 launch of the Innocent brand’s Berry Defense Super Smoothie. The product's formulation is a mix of fruit puree, vegetables, fruit juice, linseeds, and plant extracts. The smoothie drink includes vitamins B1, B2, and B6, which the brand claims contribute to normal energy metabolism, and vitamin C, which contributes to the normal functioning of the immune system.

The cost-of-living crisis coupled with the aftermath of the pandemic, has also led to higher production costs of fruit and decreased consumer spending power. This has meant consumers are trading down for cheaper options. According to Mintel, to remain competitive, brands are offering promotions, larger value formats, and some are adding water to juices to lower price points and appeal to cost-conscious consumers.

Sustainability is another top-of-mind aspect for consumers, with many worried about the food miles associated with tropical fruit juices. This is driving a preference for locally sourced and sustainable products. Brands are responding by highlighting locally sourced ingredients and sustainable farming practices to attract eco-conscious consumers and enhance their ethical credentials.