After a more than a decade of collaboration culminating with 95 million boxes of clementines shipped in 2012-13, Sun Pacific and Paramount Citrus are parting ways.
Sun Pacific is walking away with the Cuties trademark and Paramount again has complete control of its fruit.
Both California companies issued news releases May 20 on the split, but neither disclosed the purchase price for the Cuties brand and trademark. Barney Evans, vice president for sales for Sun Pacific, said the companies had been in negotiations for about a month.
In the Pasadena, Calif.-based Sun Pacific release, chief executive officer Berne Evans focused on his company now having the exclusive rights to the Cuties brand. It was coined in 2001 and owned equally by the two companies until the May 20 announcement.
Delano, Calif.-based Paramount Citrus plans to focus on branding clementines under the "Wonderful" label, said president David Krause. He said the company controls a majority of the California clementine crop, which it will market under the Wonderful brand along with pistachios, almonds and pomegranate juice.
Officials with both companies said they expect all the details of the separation to be complete within months. They also said the sale of the Cuties trademark and the separation of the companies" clementine operations were a private business matter and not the result of a court order or arbitration agreement.
Krause said Paramount is now in a mutually exclusive relationship with Fowler Packing, Fresno, Calif.
"We each have our own land and packing facilities (in Delano, Calif., and Fresno)." Krause said. "We will handle the sales and marketing for all the (clementines) for Fowler and Paramount and distribute proceeds back to each company."
Krause said Paramount has about 14,000 acres of clementines in California, but they are not all producing fruit yet. The youngest trees are expected to be bearing marketable fruit in five years. Krause said by then Paramount will be producing twice the volume of clementines it is now.
Between Paramount and Fowler acres, Krause said he expects the joint venture to pack about 70 million 5-pound boxes of the easy-peel citrus in the 2013-14 season.
Barney Evans declined to specify how many clementine acres the company has, but he said Sun Pacific will continue relationships it has with other growers during the 2013-14 season. Evans said Sun Pacific will pack at facilities in Maricopa, Calif., and Tulare, Calif.
Evans also said Sun Pacific subsidiary Califia Farms LP, Pasadena, will continue to produce and market Cuties juices as it has in recent years.
Califia juice marked the beginning of the end of the Paramount-Sun Pacific relationship.
Owners of the two companies, Stewart Resnick of Paramount and Berne Evans of Sun Pacific, met and started collaborating on small, sweet, easy-peel citrus fruit in the late 1990s. In 1999 they agreed to grow, pack, market and sell the fruit, according to court documents.
The Cuties name was coined in 2001 Krause said Resnick"s wife Linda was the creative genius behind it and she will be the driving force in the development of Paramount's new sub-brand for its clementines, which is to be launched this fall.
In 2004 Paramount and Sun Pacific marketed their first major crop of Cuties. Four years later the companies signed a master agreement that included development of a juice line.
However, in 2011 Resnick pulled out of the juice deal. Sun Pacific went ahead with the Cuties juice and Resnick filed a trademark infringement case against its subsidiary, Califia Juice LP, in federal court, according to court documents. That case was dismissed when Evans asked the court to enforce an arbitration clause in the master agreement.
Last fall, the American Arbitration Association declared Sun Pacific would have exclusive rights to the Cuties brand through the end of the 2013-14 season.