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Commodities Report: Flu Fears Halt Long Decline in Orange-Juice Sales -- WSJ

10 Feb 2018 7:32 am
By Julie Wernau 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 10, 2018).

It took one of the worst flu seasons on record to get more Americans guzzling orange juice again.

Orange juice sales rose 0.9% to 38.66 million gallons in the four weeks ended Jan. 20. That uptick marked the first year-over-year increase in nearly five years, according to Nielsen, though analysts don't expect this trend to last much beyond flu season.

Consumption has been dwindling over the past decade for a number of reasons. Greater public awareness of orange juice's high sugar content has dented its image as a healthy drink. Flavored water, blended beverages like smoothies, and energy drinks such as Red Bull have made traditional fruit juices look staid in the eyes of many consumers, analysts say.

In Florida, the largest producer of oranges for juice in the U.S., a direct hit from Hurricane Irma last year and a crop-destroying disease called "citrus greening" have pushed up the price of the fruit. That makes orange juice less competitive on cost compared with other juices and beverages.

But the most severe flu outbreak in the U.S. in at least eight years has those worried about getting sick turning to this traditional source of vitamin C, helping boost sales for the first time since April 2013.

Jackie Williams, 37 years old, a second-grade teacher in Lawrence, Kan., said orange juice has been in high demand with her family during flu season. Her husband, Matthew Williams, 35, swears it is the reason he doesn't get sick, she said.

"Every time he feels like he is about to get sick, he gets a gallon of cheap orange juice and drinks the whole thing," she said. "None of us have had any symptoms of illness."

Flu pandemics have aided orange juice sales before. In 2009, an outbreak of the H1N1 influenza virus, better known as swine flu, helped to boost sales by 8%.

Scientific research, however, suggests only a tenuous connection between orange juice consumption and flu prevention. According to the National Institutes of Health, there is currently no strong evidence that any natural product is useful against the flu. The best protection, the NIH says, is a flu vaccine.

While fans of orange juice point to its high vitamin-C content, the NIH says that doesn't prevent illness. Some studies show the vitamin can slightly reduce the length and severity of a cold if it is consumed every day and not just when symptoms begin. There isn't enough evidence to show whether the same is true for the flu, the agency said.

"Orange juice was long considered a healthy beverage," said Jim Watson, a beverage-industry analyst at Rabobank. "It's only in the last few years as concerns about sugar have picked up, that it has switched over to being considered an unhealthy beverage."

The recent rise in orange juice sales, though, isn't enough to ease the concerns of producers and sellers. Irma knocked half the developing oranges off trees across the state. This year's crop will likely be the smallest since the 1940s, according to the U.S. Department of Agriculture, leaving orange growers scrambling to recoup losses.

The crimped supply means higher costs for juice makers. That has pushed up the beverage's price on store shelves to $6.79 a gallon on average -- a rise of more than 50% since 2004, just before the citrus greening disease was found in the state, according to Nielsen.

Brandon Saltmarsh, owner of Winter Park, Fla., beverage producer HomeMaker Juice, said while worries about the flu have offered a nice boost to sales, the market has lost 44% of consumption since 2013 and higher prices will further weigh on demand. His company has kept prices steady while many other producers have raised prices, but competing beverages are winning shelf space.

"Retailers are cutting space for orange juice," Mr. Saltmarsh said. "They are replacing it with iced coffee, probiotics. It's a trend that is starting to really hurt the category."

Write to Julie Wernau at Julie.Wernau@wsj.com

(END) Dow Jones Newswires

February 10, 2018 02:32 ET (07:32 GMT)

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