Hot battle in the orange juice cooler. Minute Maid puts Coke's marketing muscle up against Tropicana
Boston — Minute Maid wants to put the squeeze on Tropicana. With Minute Maid Premium Choice, America's No. 1 orange juicemaker is battling for a share of the not-from-concentrate (or premium) market in New England, where chilled juice has been available the longest and where its market is the most developed, says Coca-Cola spokeswoman Alice Brink.
At the moment, Tropicana is dominant in the region. If Minute Maid makes a successful challenge in this area, it would mean an important boost toward national success.
Minute Maid starts its bid for a share of the premium market with an advantage: It is owned by Coca-Cola Company, whose popular and profitable soft drinks have earned good shelf space with retailers.
``What's really important here is the ability to market,'' says George Thompson, an analyst with Prudential-Bache Securities Inc. ``Coca-Cola has an enormous amount of leverage in a supermarket.''
Minute Maid's move follows more than a decade of consumer flight from the work of mixing up frozen concentrate juice from cans to the ease of pouring ready-to-serve (or chilled) juice. Last year, for the second year running, chilled orange juice outsold frozen concentrate, says Alan Fried, a spokesman for the Florida Department of Citrus.
Premium juice, which is bottled after being squeezed from the oranges, is the fastest-growing segment in the market, though it represents only 17 percent of the ready-to-serve orange juice market. The remaining 83 percent comes from juice that has been reconstituted from concentrate by the manufacturer before bottling.
Minute Maid launched its premium juice this month in cartons in New England, but the juice is also being tested in plastic bottles in New York City and Philadelphia, to learn the advantages of each type of package, Ms. Brink says.
Although Hugh Zurkuhlen, an analyst at Salomon Brothers Inc., says Minute Maid is ``absolutely dominant in the frozen sector,'' this fact must be small comfort to the company.
Sales of frozen concentrate declined last year by 8 percent from 1986 to 394 million gallons, while ready-to-serve sales increased 2 percent to 448 million gallons, according Mr. Fried.
Bad weather has cut into juicemakers' profits, so Minute Maid won't be discounting its premium juice to spur sales. Freezes have killed fruit in northern Florida for the past two years, while Brazil's crop, which American juice companies have used to bring down costs, has been hit by spring drought.
``Orange juice is a commodity, and it's highly dependent on the availability, import restrictions, and the climate,'' says Frank Smith, New York spokesman for the Chicago-based Sami/Burke Inc., a market-research firm.
But the weather notwithstanding, the future for the chilled segment looks bright.
``I think it will continue to grow. We've always gone for convenience,'' says Mr. Zurkuhlen.
Consumers bought $2.8 billion worth of orange juice in 1987, of which $1.6 billion was spent on chilled juice. Minute Maid remains first in overall orange juice sales, with about 22 percent. Tropicana (a division of Seagram's, the liquor manufacturer) is second with about 18 percent, and Proctor & Gamble's Citrus Hill is third with about 9 percent.