Costco and Walmart Might Stop Selling Your Favorite Juice

Tropicana orange juice faces an unprecedented crisis. Extreme weather events, crop diseases, and changes in consumption have affected its sales. Now, major U.S. retailers Costco and Walmart might end up removing the brand from their shelves due to high prices and low demand.

According to CNN, orange production in the United States will reach its lowest level in 88 years. A 10% drop in national production and a 33% collapse in Florida, the main producing state, are expected. This has driven up the price of orange juice, affecting sales in supermarkets and large chains.

Orange Production Crisis

Hurricane Milton ravaged Florida last year with extreme rains and devastating winds. "Milton crossed the center of the state and really affected much of the most important crops," explained Matt Joyner, director of Florida Citrus Mutual. It is estimated that 70% of Florida's most productive citrus crops were destroyed.

Additionally, the citrus greening disease, detected in 2005, has drastically reduced orange production. This problem has forced companies like Alico, a supplier of Tropicana, to abandon citrus production in Florida after losing 73% of their production in the last decade.

Tropicana in Financial Trouble

Production difficulties have directly affected Tropicana. According to CNN, in the last quarter their revenue fell by 4% and profits decreased by 10%. The company faces liquidity problems and has needed an emergency loan of $30 million.

PepsiCo, which still retains a minority stake in Tropicana, has also shown doubts about its future. In the last quarter, it reduced the value of its investment in the company by $135 million.

Will Costco and Walmart Stop Selling Tropicana?

The impact of the citrus crisis has raised orange juice prices to record levels. Since 2020, the price has nearly doubled, reaching an average of $4.50 per bottle, according to the Bureau of Labor Statistics.

Major chains might start evaluating whether to keep Tropicana on their shelves. The drop in sales has been noticeable in stores like Costco and Walmart, where consumers are looking for lower prices. A Mintel report revealed that only 19% of Americans consider orange juice to have good value for money.

Additionally, lower-income consumers have reduced their orange juice consumption, affecting sales in discount stores and supermarkets.

More Competition and New Habits

Tropicana faces difficulties in an increasingly competitive market. Consumers prefer healthier options like teas, sparkling waters, and functional beverages. Additionally, it faces strong competition.

In the economic segment, Coca-Cola's Minute Maid dominates with lower prices. In the premium range, Simply, also from Coca-Cola, is capturing those looking for high-quality juice. "Tropicana faces a series of enormous challenges," commented Duane Stanford, editor of Beverage Digest.

An Attempted Change That Failed

To reduce costs, Tropicana redesigned its bottle, reducing its size from 52 to 46 ounces. It also changed the label and the shape of the packaging. But the strategy was not well received. Customers criticized the change and accused the brand of selling less juice for the same price.

To attract new customers, Tropicana has tried to diversify with new products. In 2023, it launched a sugar-free version and a line of carbonated drinks. However, changing the perception of a brand with nearly 80 years of history is not easy.