Coca-Cola Co. said Tuesday that it is spending $2 billion to support the planting of 25,000 acres of new orange groves in Florida, a move officials are lauding as a major investment in the Sunshine State's citrus industry.The announcement was made at a news conference at Coca-Cola's juice production plant in Auburndale.
Coca-Cola will buy fruit from two growers: Peace River Citrus Products in Vero Beach and Cutrale Citrus, one of Brazil's top growers and juice processors.
Cutrale Citrus' entrance to Florida as a grower is significant, said Florida Agriculture Commissioner Adam Putnam.
"The fact that one of the dominant Brazilian players will now have an ownership stake in actual production in Florida is a tremendous development," Putnam said.
Coca-Cola owns the Minute Maid and Simply juice brands and already buys juice from Cutrale in Brazil. Coca-Cola is also a significant juice processor in Florida — Tuesday's news conference was held at the largest juice bottling plant in the United States.
Some 5 million new trees will be planted in the new groves, believed to be the largest citrus addition in the state for at least 25 years. The groves will be located in Polk, DeSoto and Hendry counties in central Florida.
"It's an investment in a market that's very important to us," said Steve Cahillane, the president of Coca-Cola Americas.
Analysts say that the announcement intensifies the juice wars between Coca-Cola and PepsiCo, which owns the Tropicana brand.
"This shows Coke's commitment both to the Florida citrus business and the future of its own juice business," said John Sicher, editor and publisher of Beverage Digest.
Sicher said that consumers have a growing interest in juice beverages because they are seeking products with "health, wellness and natural attributes."
"Citrus juices hit those criteria and make juices a potential category for growth," he said.
Coca-Cola officials said that Simply juice counted $1.2 billion in annual sales.
Company officials say the new groves and resulting juice production are expected to add about 4,100 jobs to Florida's economy.
The move also is seen as a boost to historically declining acreage devoted to citrus production in Florida. During the state's past housing boom, many citrus farmers sold their land to developers. Since 1997, total citrus acreage has fallen by 25 percent, from 600,000 acres to 450,000 acres, because of the disease, pests and other pressures, according to Florida Citrus Mutual.
