Caught in the Squeezer

In the food industry, nothing has caught on faster than frozen orange juice. Its sales have soared from an initial 225,000 gallons five years ago to an estimated 31 million this past year. But the paradox is that the more juice the industry sells, the less money it. makes. Last year, both Minute Maid and Snow Crop--the industry's big two--had a rough time. The trouble? The cost of oranges skyrocketed from 46-c- a box to $2.12, while at retail the industry has been racked by price wars which have recently forced juice producers to sell below cost.

Last week Snow Crop took a drastic step to end some of its risks. It sold all its Florida processing plants (concentrated-juice capacity 14 million gallons a year) for $11 million to a growers' cooperative, the Florida Citrus Exchange. As a clincher, Snow Crop's boss, 60-year-old Charles W. Metcalf, quit his job and took over as manager of the concentrate operations. Under the deal, Snow Crop was assured of a constant supply of juice and hoped that most of its worries about gyrating orange prices would be solved.

But a similar remedy did not work in California, where a growers' cooperative started marketing the Sunkist brand of frozen juice earlier this year (TIME, June 25). The California growers found that even the tax advantages held by a cooperative (no taxes on distributed profits) cannot solve all the industry's problems of cut-price competition. Some 14,000 members of the California Fruit Growers Exchange have sunk $4,000,000 into Sunkist's processing machinery. But the exchange, which recently set below-cost retail prices to try to grab the frozen concentrate market away from the older eastern brands, is losing money, and orange growers are squawking.

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