Limoneira delves into lemon marketing - The Packer

Limoneira delves into lemon marketing

10/27/2010 03:13:58 PM
Don Schrack

SANTA PAULA, Calif. — Limoneira Co. has been growing and packing lemons since 1893.

Marketing those lemons all those years — save for a four-year-long spat more than a century ago — has been the cooperative now known as Sunkist Growers Inc., Sherman Oaks, but no longer.

In a move that industry leaders said came as a surprise, Limoneira has taken its lemon marketing in house.

“Our departure was not due to anything antagonistic towards Sunkist at all,” said Alex Teague, senior vice president and chief operating officer. “We’re still one of their larger growers with our other citrus commodities.”

The move was strictly a business decision, he said, based on the grower-packer-shipper’s future plans.

“Our business model calls for growth here in California and in the Southern Hemisphere,” Teague said. “We felt that to totally be able to listen to customers and react accordingly, we needed to be a little bit closer.”

Selling the company’s lemons is what Teague calls the last piece of the vertical model. After more than a century of growing citrus fruit, Limoneira has export contacts around the globe. Those contacts make it possible for the company to take advantage when there’s an opening. It is not regular business but what Teague calls opportunistic business.

“Mother Nature screws everybody once in a while,” he said. “If you have demand and you’re in tune with all markets in all the places in the world, you can ship perhaps three containers that would otherwise have gone to juice.”

Limoneira is better able than most to fill the lemon opportunity niche, Teague said.

“It’s a category where we feel we have a natural advantage being around here for 118 years and being the largest lemon producer,” he said. “We bring something to the party. We have knowledge that few have.”

Seventy percent of the domestic lemon volume goes to foodservice, which along with wholesale is the primary focus for Limoneira’s marketing efforts, Teague said. That is not to be interpreted that Limoneira is uninterested in retail customers.

Per capita consumption in other countries often outpaces the annual 2.7 pounds of lemons the average U.S. consumer eats. As a whole, the European average is 6 pounds, Teague said, but Italy’s annual per-capita consumption is more than 14 pounds. Limoneira is committed to increasing domestic consumption.

“We really believe we can get from 2.7 pounds to 4 pounds,” Teague said.

At the same time, Teague admits Limoneira is not going to sell to everybody.

“We just want to be the best in our niche,” he said.

Limoneira has about 2,000 acres of lemon groves. Lemon volume is two-to-one over the company’s other citrus products — blood oranges, cara caras, navels, pomelos and minneolas — combined, Teague said. The business model’s growth plans do not call for additional acreage in the California desert or Mexico, he said, but could very well include new varieties.

“If there’s something out there, we try it,” Teague said.

The company already grows the Limoneira lemon, a seedless variety, and three other seedless varieties developed by the University of California. It also grows virtually all of the pink variegated lemons in California.

Mandarins are not on the Limoneira experimental list, Teague said, “because there are other strong players in specialty citrus.”

Organic lemons play a small role at Limoneira, due in large measure to the fact that organic produce is more of a retail product as opposed to foodservice.

For the coming lemon deal, Arizona’s volume will be about the same as last season, Teague said, but he expects increased volumes in California’s growing regions: up as much as 12% in the desert, about 10% in the San Joaquin Valley and for the coast region’s spring/summer 2011 production, volume could be up about 20%, he said.

“There should be good lemon supplies for the next 12 months,” Teague said.



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