Growing for the future

Peak industry body representing the $7 billion non-alcoholic beverages industry.

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Growing for the future

Growing for the future: Challenges in juice persist, but a rosier horizon possible

In 2017-18, the Australian fruit juice industry continued to suffer from a shortage of Valencia oranges while competition and changing consumer preferences led to challenging operating conditions across the industry. While shouldering some stresses through 2018, the juice industry anticipates a slightly rosier 2019, but risks will persist, particularly as domestic citrus supply remains constrained and the image of juice is suffering from the current demonisation of sugar.

Earlier in 2018, Valencia orange growers in Australia were receiving the highest prices for their produce in almost a decade amid a global, chronic and sustained shortage. Juice Australia (JA) and our partners monitored this issue and we acknowledge it will be some time before prices will drop to their historical long-term average.

Many citrus growers who were eager to take advantage of lucrative export markets have replaced older Valencia trees with new varieties of Navels as well as mandarin. These market dynamics are compounding supply problems to the juice industry in Australia.

Since 2008, chilled juice has been increasing in market value at the expense of ambient juice, growing in value by more than $140 million. While the overall value of the juice market has been declining since 2011, forecasts indicate value losses will slow and value should peak in 2019 due to consumers opting for more premium chilled products. Looking further ahead, the expectation is that growth will remain modest across the category with the greatest promise of better margins and sales in premium lines. Clearly this will be contingent upon the local supply of fruit regaining some certainty over the forward horizon.

Some of the premium lines introduced by Members of Juice Australia include combinations of fruit and vegetable juices, greater density juices which have been pressed or crushed, and unique juice blends, many of which include coconut water. Some producers have also branched out into other categories, such as non-dairy yoghurt and sparkling juices or flavoured waters.

Just recently, market research on Australian fruit juice suggested millennials and families with young children are key targets for premium juice products. The report found millennials perceive juice consumption as an indulgence, while families with young children generally value high quality ingredients as a key factor in the decision-making process.

While it is of little surprise and while it supports our emphasis on the micro-nutritional benefits of juice, I was delighted to read recently that that one of the most common reasons for people drinking juice is because they want something healthy or nutritional. As a household of juice consumers, I can certainly attest to that.

For many, it’s not just the nutritional plus points that influence consumers. Innovative packaging, particularly recycled packaging, plays a decisive role in consumers purchasing a particular juice product. At the World Beverage Innovation Awards recently in Germany, packaging innovation was at the centre of new development. I encourage all to consider this throughout 2019 and beyond, particularly as environmental sustainability, alongside attractive packaging, is almost certain to be a major issue for the juice and wider beverage industry going forward.

In recognition of the changing nature of the juice industry, Fruit Juice Australia became Juice Australia in 2018. JA will continue to advocate strongly for fresh and ambient juice made from fruit and vegetables alongside juice drinks.

Geoff Parker is the Chief Executive Officer, Australian Beverages Council, of which Juice Australia is the organisation’s dedicated juice division.