The smiles Monday at Lake Wales Country Club were as big and the applause as expansive as the orange groves that fill southern Polk County.
That’s because several hundred stockholders and citrus producers for Florida’s Natural Growers learned that the company’s previous fiscal year was a record breaker.
“Despite unprecedented cost increases for energy, operations were successful in managing costs through productivity increases and we close the year experiencing a record high market share, record gallons sold, record dollars sold and record loyalty,” said Chief Executive Officer Steve Caruso.
Overall, gross sales for 2012 were
$624.8 million, company officials indicated.
“In virtually every aspect, the financial condition of Florida’s Natural Growers indicates not only an improvement from recent years’ already impressive results, but in many cases represented new records with a return of $1.90 for oranges and grapefruit at $1.55 per pound solid,” said Florida’s Natural Chief Financial Officer Chip Hendry. “The company also generated a profit on non-member business that significantly strengthens the Co-op’s balance sheet.”
Hendry also noted that the company had made more than $73 million in capital investments in the past five years, but has long term debt of only about $40 million, the lowest in five years. Improvements included the automation of the not-from-concentrate juice blending system, a premium pulp recovery system and high speed packaging lines.
“There was much emphasis placed upon improving operational efficiencies, reducing waste and costs. This has combined to produce one of the highest gross profit percentages in history,” he added. “Although the amount of the fruit processed during the 2012 season was far from a record, the amount of member proceeds were at an all time high. The 2012 season may well be remembered for a number of records broken, and it certainly is a testament to the advantages of brand ownership.”
He said that decision 25 years ago to create Florida’s Natural brand may have saved the firm that locally was known for decades as Citrus World Inc.
“None of these financial results would have been possible without the success of the Florida’s Natural brand,” he added. “In fact, and this is my opinion, there’s a very strong possibility that without the vision of our members and our marketing team and support of our financial partners that we could have been one of the many former citrus processors remembered only in historical records if it were not for the Florida’s Natural brand.”
Officials said about 37 cents of every dollar in sales was returned to member growers last year, a number that impressed auditor Clay Worden of McGladery, one of the nation’s largest accounting firms.
“It was only two years ago, that figure was 29 cents. That speaks to the efforts that management has put in,” he said. “The history of this co-op has positioned it to continue to pay good dividends.”
One of the major developments of the past year was the addition of a 14th member, the Southern Gardens Grove Corporation in Clewiston.
“Growing the member fruit supply is necessary to support real opportunities to increase market share,” Caruso added.
Monday’s meeting was a true celebration in more ways than one. In addition to celebrating a quarter-century of Florida’s Natural brand, it also marked the final stockholder meeting for the company’s Vice President of Sales and Marketing, Walt Lincer, who has been with the co-op for three decades and was there at the beginning when Florida’s Natural, originally branded as “Fresh ‘N Natural,” was created from scratch.
Four years after its launch in 1987, the company was forced to come up with a new name because the Food and Drug Administration said it could not use “fresh” in its labeling because the juice was pasteurized.
“The Florida’s Natural Brand changed this cooperative 25 years ago from a private label packer to a consumer brand marketer. Our successes for the past year in distribution, market share, sales, consumer loyalty are on all accounts as a result of the Florida’s Natural brand,” Lincer said.
Market share has grown to just under 21 percent, meaning it is making a serious bid to reach that of its two biggest competitors, Tropicana and Minute Maid. Two years ago, at the same meeting, company officials reported a market share of 18.1 percent.
First formed in 1933, the growers’ cooperative was named Florida Citrus Canners Cooperative, as its main function was canning grapefruit sections and juice for its grower members. After the development of frozen concentrated juices in the 1940’s, the cooperative invested in the necessary infrastructure and became one of the largest juice processors in the state. In 1969, the Canners Cooperative eventually changed its name to Citrus World Inc. to better reflect its diverse product line. Today, the majority of the Cooperative’s sales are derived from the Florida’s Natural Brand squeezed from 100 percent Florida oranges. The cooperative now uses Florida’s Natural Growers as its name.
Florida’s Natural Growers is comprised of 14 grower organizations representing almost 1,000 individual growers who own nearly 60,000 acres of citrus in Florida. Florida’s Natural Growers operates its processing plant in Lake Wales with a juice packaging plant in Umatilla, Fla. The Lake Wales facility employs 670 employees in Lake Wales and 101 in Umatilla. That local workforce number is down from recent years, when as many as 900 employees were part of the local operation.
Florida’s Natural can extract more than 9 million pounds of fruit every 24 hours in peak season. Brands produced in Lake Wales include Florida’s Natural, Florida’s Natural Growers Pride, Donald Duck, and Bluebird.
“Your board and management staff have accomplished a lot but the challenges that lie ahead of us are also our greatest opportunities,” said Board Chairman Dick Fort. He was presiding over his sixth straight board meeting, and while he will continue to serve on the board, will be stepping down as its chairman per the firm’s bylaws.