As tastes and perceptions change
It used to be the beverage of choice at neighborhood potlucks and the breakfast table.
But now demand for frozen concentrated orange juice—and even its “ready to serve” version—is waning as consumers begin sitting down for breakfast less, while other beverages, such as smoothies and energy drinks, grow in popularity, the Wall Street Journal reported.
Along with disease and weather, those changing tastes have sent Florida’s orange harvest toward a 52-year low. The Sunshine State is the U.S.’s main supplier for O.J. and the world’s second largest behind Brazil.
But one analyst says the real culprit is one that runs counter to the way orange juice has been marketed for years: It’s bad for you.
“The largest issue is the view and some of the scientific evidence that orange juice is actually unhealthy for you due to the high fructose sugar content,” Shawn Hackett, CEO of Hackett Financial Advisors, which specializes in agricultural commodities, told Fortune. “That generational change in perception has made consumers question why they should pay a high price for an unhealthy drink.”
In 2015, the U.S. Department of Agriculture proposed new guidelines for daycares in 2015 that would prohibit fruit juices from being served to children under 1 year old.
That shift in perception isn’t affecting only the U.S. Primary schools in the U.K. have banned fruit juices, while the British government’s leading obesity advisor has warned that fruit juice contains as much sugar as Coca-Cola, and has called for a tax on the product. The Australian Capital Territory Government also banned the sale of fruit juices and soft drinks in Canberra public schools in 2014.
Global orange consumption slipped in the 2015-2016 fiscal year, according to the U.S. Agricultural Department.
Meanwhile, on Wall Street, the once flourishing frozen orange concentrate market seems to be headed toward extinction, Hackett told Barron’s. The concentrate began trading as a soft commodity in the 1940s, and was served as the primary breakfast drink until the 1980s, when “ready to serve” juices were invented. Now the number of futures contracts is down about 70% from its high in 1997.