The Minute Maid Company

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The Minute Maid Company

Post Office Box 2079
Houston, Texas 77252
U.S.A.
(713)888-5000
(800)888-6488
Fax: (713) 888-5959
Web site: http://www.cocacola.com

Division of The Coca-Cola Company
Incorporated :1945 as Florida Foods, Inc.
Employees : 1,900
Sales :$2 billion (1997 est.)
NAIC :311311 Frozen Fruit, Juice, & Vegetable Processing; 31193 Flavoring Syrup & Concentrate Manufacturing

The Minute Maid Company claims to be the World’s leading marketer of juices and juice drinks. In the $3 billion U.S. orange juice market, however, the company trails market leader and archrival Tropicana Products, Inc. (which is itself a division of PepsiCo, Inc., Coca-Cola’s archrival)—Minute Maid holding 24 percent of the overall market, Tropicana 33 percent. Minute Maid dominates the $550 million frozen concentrate sector, with 44.7 percent market share (while private labels hold 39.4 percent and Tropicana 5.4 percent); but in the $2.45 billion chilled juice sector, Tropicana claims 39.8 percent market share, private labels 22.5 percent, and Minute Maid only 19.3 percent. In addition to the flagship Minute Maid Premium brand orange juice, the company also sells Minute Maid lemonade drinks, fruit punches, and apple, cherry, grape, and other juices. Other brands include Hi-C fruit drinks, Five Alive citrus drinks, Bright & Early grape and orange breakfast beverages, and Bacardi mixers. Minute Maid International markets the company’s branded juice products in more than 80 foreign countries, aided by processing and packaging plants in Canada, Puerto Rico, South Africa, France, Spain, the Netherlands, and Japan. Minute Maid Danone, a 1996-created joint venture with Groupe Danone of France, sells Minute Maid Premium juices in several European countries, holding the number one position in refrigerated juices in Spain and Portugal. Other partners include Brazil-based Sucocitrico Cutrale Ltda., the largest grower and processor of oranges in the world and one of Minute Maid’s major orange suppliers, and Minneapolis-based Cargill Inc., which distributes Minute Maid products to the foodservice industry.

World War II Research Led to Company Founding

During World War II the Boston-based National Research Corporation (NRC) developed high-vacuum evaporation processes for dehydrating penicillin, blood plasma, and streptomycin for use in the U.S. war effort. The U.S. Army wanted to extend this technological advance into the area of providing its troops nutritious food, especially orange juice. Previous attempts to concentrate orange juice through boiling the water out of the juice failed because the boiling process destroyed the flavor. When NRC scientists employed, on orange juice, the high-vacuum process used to dehydrate penicillin, they were able to create a concentrated powder that made flavorful orange juice when reconstituted.

In early 1945 NRC organized Florida Foods Corporation, with John M. Fox as its head, and built a plant in Plymouth, Florida. The company aimed to win a contract for 500,000 pounds of powdered orange juice, which the Army had offered. Through Fox’ persistence, Florida Foods was awarded the contract in the spring of 1945 for $750,000 worth of orange powder. Fox next secured $2.7 million in capital from investors, but the end of the war led the Army to cancel the order.

Undeterred, Fox shifted the company’s focus to the consumer market. In need of a brand name, Florida Foods hired an advertising agency based in Boston, a city whose rich history included the famous Minutemen. The agency thereby created the Minute Maid brand, a name connoting convenience and ease of preparation. Concluding that the orange powder would not constitute a viable consumer product, Fox also led his company to market an “intermediate step” in the vacuum process—that of frozen orange juice concentrate. Through experimentation, the company settled on a process that eliminated 80 percent of the water in orange juice, forming a frozen concentrate that when reconstituted created orange juice richer and more flavorful than that created from the powder.

The first shipment of Minute Maid concentrate—the first concentrated orange juice brand—took place on April 15,1946, from the Plymouth plant. That same month the company changed its name to Vacuum Foods Corporation. Lacking funds for advertising and promotion, Fox went door to door in his hometown of Hingham, Massachusetts, offering free samples out of the ice- and can-filled trunk of his car. The product quickly caught on, and grocery stores in the area found it difficult to keep their freezers stocked with Minute Maid.

Once funds became available for marketing, ads stressed the superior taste of Minute Maid compared to canned orange juice, as well as the time savings in preparation compared to squeezing fresh oranges. It was the 1948 launch of the Bing Crosby radio campaign, however, that set Minute Maid on the road to national prominence. The extremely popular Crosby began endorsing the product during his daily radio program; his pitch was so strong that some consumers concluded—errantly—that he owned the company. This very successful campaign increased sales tremendously and led to a nearly 30-year promotional relationship between Minute Maid and Crosby and his family. Meanwhile, in October 1949 the company incorporated its brand into its company name, when it adopted the name Minute Maid Corp.

Acquired by Coca-Cola in 1960

The precipitous growth of Minute Maid during its early years was evident in the company’s revenue figures. During its first year of operation in 1946, the company recorded sales of $374,500. Just five years later, sales reached $29.5 million. In 1958 the company developed centrifuge equipment that removed water from the concentrate through freezing rather than evaporation, thereby improving the concentration process. By 1960 Minute Maid had gained the attention of soft drink king Cola-Cola Company, which late that year acquired the company through a stock swap, marking the firm’s first venture outside of soft drinks. Five days after the purchase was consummated, Fox—president of Minute Maid at the time—left the company. Benjamin H. Oehlert, Jr., who had helped shepherd the purchase through, was named president of Minute Maid Company, which was set up as a division of Coca-Cola. By the time of the acquisition, Minute Maid had expanded beyond orange juice and was also marketing the Hi-C line of canned fruit drinks.

In the initial years under Coca-Cola, much stayed the same at Minute Maid, most notably the distribution, as channels for frozen juices and soft drinks were markedly different. But Coke reacted aggressively when the citrus industry encountered one of its periodic freezes in December 1962, a freeze that destroyed more than one-third of the orange crop in Florida. As usual, prices shot up and consumption dropped. The amount of orange concentrate shipped dropped by 50 percent, remaining at the reduced level for several years.

In the aftermath of the 1962 freeze, Coca-Cola officials were determined to secure a steady supply of oranges outside of Florida, particularly as a hedge against future freezes. The company helped a Brazilian orange wholesaler, Jose Cutrale, Jr., enter the orange growing business by providing him with planting and cultivation advice and with technical assistance in the area of juice production. Cutrale’s company, Sucocitrico Cutrale Ltda., eventually became the largest grower and processor of oranges in the world and one of Minute Maid’s major suppliers. The relationship between Minute Maid and Cutrale, one that Minute Maid typically played down so as not to antagonize its Florida suppliers, continued into the late 1990s.

Not unexpectedly, Minute Maid’s packaging and advertising became more sophisticated within the Coke marketing empire. In 1965 Minute Maid changed its packaging, which had consisted of a white, orange, and green scheme and had been imitated by competitors. The new design was most notable for its unusual black background, which provided a strong contrast with competitors’ packaging and helped the brand retain its loyal customers. On the advertising front, Minute Maid ads by this time no longer touted orange juice as strictly a health drink for preventing colds and the “Asian flu.” Instead, ads emphasized Minute Maid’s “natural sweetness” and “natural freshness,” and attempted to position—mostly unsuccessfully—orange juice as a drink that was not just for breakfast. Also, in 1968 the company began airing prime-time television commercials featuring Bing Crosby and his family; this remarkably successful campaign continued until Crosby’s death in 1977. Minute Maid in 1969 introduced a 16-ounce frozen concentrated orange juice package, the largest such package in the industry. Eventually the Minute Maid division was renamed Coca-Cola Foods, with Minute Maid remaining the centerpiece brand.

Company Perspectives

The Minute Maid Company, an operating group of The Coca-Cola Company, is the World’s leading marketer of premium fruit juices and drinks. Our objective? Create ever-increasing shareowner value through global leadership in juice beverages. Our destination? To be The Coca-Cola Company of juices, worldwide. Our future? Bursting with opportunity.

“Orange Juice Wars” Began in 1973

The so-called “orange juice wars” were most heated during the 1980s and 1990s, but the fierce rivalry between Minute Maid and Tropicana began as early as 1973. That year, Coca-Cola Foods boldly targeted Tropicana’s dominance of the chilled juice sector with the introduction of Minute Maid chilled juice made from reconstituted frozen concentrate. Coca-Cola Foods not only went after Tropicana in the New York metropolitan area where Tropicana’s market share was around 40 percent, it also quickly rolled out its new product nationwide, becoming the first company to market chilled juice nationally. Both companies claimed production of the superior product. Coca-Cola Foods argued that it could overcome seasonal variations in the taste and quality of oranges through the concentrating process, which allowed for the blending of the juice of oranges picked at various times of the year. Tropicana countered, contending that its not-from-concentrate chilled juice was inherently better because it was bottled right out of the orange (after pasteurization). The Minute Maid-Tropicana rivalry grew more heated in 1975 when the latter reentered the market for frozen concentrate. Tropicana gained deeper pockets in 1978 when it was acquired by Beatrice Foods Co.

Around this same time, Coca-Cola Foods launched a new brand, Bright & Early, a breakfast beverage sold in frozen concentrated form. This was just one of a host of new products introduced from the mid-1970s through the mid-1980s. The Five Alive brand made its national debut in 1979 with the launch of a fruit drink composed of 60 percent fruit juice from oranges, grapefruit, lemons, tangerines, and limes. This product—initially available in frozen concentrate but later offered chilled as well—marked the beginning of an industry trend toward high-juice-content fruit drinks that were lighter than typical fruit juices and therefore accepted by consumers as an all-day refreshment. In 1982 a second Five Alive flavor was added, one that combined apple, grape, lemon, pineapple, and cherry juices. The Minute Maid brand itself meanwhile extended in all directions. By mid-1984 Minute Maid frozen concentrates included the flagship orange juice, reduced-acid orange juice, orange juice with more pulp, pineapple orange juice, tangerine juice, grapefruit and pink grapefruit juice, apple juice, grape juice, pineapple juice, lemonade, pink lemonade, limeade, and fruit punch. Also developed was a line of all-natural Minute Maid crystals—powdered drink mixes available in lemonade, pink lemonade, lemon-limeade, and fruit punch flavors. In the chilled segment, Coca-Cola Foods similarly expanded beyond orange juice, adding lemonade, pink lemonade, fruit punch, and grapefruit juice to its stable. In 1983 the division became the first American firm to nationally market a single-serving fruit drink in an aseptic Tetra Brik package, the so-called and soon to be immensely popular “drink box.” Debuting that year in the new packaging were the three most popular Hi-C flavors: orange, grape, and fruit punch. By 1984 Coca-Cola Foods held the top spot in orange juice, with 22 percent of the $3 billion market, but it was much more than simply a maker of orange juice.

Two key 1983 events shook the orange juice industry and intensified the “orange juice wars.” The Procter & Gamble Company (P&G) launched the Citrus Hill brand, offering both frozen concentrate and from-concentrate chilled juice. By 1984 the marketing power of P&G had quickly made Citrus Hill into a fairly strong third player. That year the declining frozen concentrate sector was led by Minute Maid’s 25 percent share, with Citrus Hill holding seven percent and Tropicana four percent. Tropicana still held the top spot in the rapidly growing chilled juice sector at 28 percent, with Minute Maid claiming 18 percent and Citrus Hill nine percent. The second key event of 1983 was an orange freeze which forced Tropicana to raise the price of its not-from-concentrate chilled juice three times in quick succession. Amazingly, the company saw no dropoff in purchasing, as customers were clearly willing to pay a premium for what they perceived to be a superior product—the not-from-concentrate juice. With funds from the higher prices, Tropicana began to expand outside its strongholds in the northeast and southeast; by the late 1980s Tropicana was a national brand for the first time. Minute Maid was hurt further by the continuing erosion in sales of frozen concentrate. In 1986 U.S. sales of chilled orange juice surpassed those of concentrate for the first time, as consumers continued to seek out more convenient foods.

Minute Maid struck back with several product introductions: Minute Maid Calcium Rich, a calcium-fortified orange juice, in 1987; Minute Maid Premium Choice, a not-from-concentrate chilled orange juice aimed squarely at Tropicana, in 1988; Minute Maid Pulp Free orange juice, in 1989; and Minute Maid Juices to Go, a line of single-serve juices and juice drinks, in 1990. Premium Choice found some initial success, gaining 11.7 percent of the not-from-concentrate juice market by 1990, but not before Tropicana had sued Coca-Cola Foods over the use of the phrase “straight from the orange” in its packaging and advertising. Coca-Cola Foods decided to drop the slogan rather than contest the lawsuit. Despite the new products, the company was losing its battle with Tropicana, as that company—which had been acquired by The Seagram Company, Ltd. in 1988— edged past Minute Maid in 1990 in the overall orange juice market, claiming a 22.3 percent share to Minute Maid’s 22.2 percent. Despite P&G’s marketing strength, Citrus Hill became a casualty of the orange juice wars when P&G pulled the plug on the brand in September 1992, unable to compete with the two industry giants. The Minute Maid-Tropicana rivalry grew even more intense in the wake of Citrus Hill’s departure, with Tropicana gaining the initial upper hand. By 1993 Tropicana had extended its lead in the overall orange juice market to a somewhat comfortable 30.1 percent vs. 25.9 percent. By 1996 the gap had grown even larger, 32.4 percent vs. 24.3 percent.

Mid-1990s Turnaround Effort

Coca-Cola Foods was its parent company’s only division to post an operating loss in 1995. In the summer of that year Ralph Cooper took over as CEO and president from Timothy Haas. Under Cooper’s leadership, Coca-Cola Foods made a number of moves in 1996 and early 1997 aimed at turning its fortunes around. To emphasize its main brand name, it changed its name to The Minute Maid Company. It also gave itself an ambitious goal—to become the “Coca-Cola Company of juices worldwide.” To this end, Minute Maid aimed to aggressively expand overseas. In 1996 the company entered into a 50-50 joint venture with Groupe Danone of France, whereby the two companies would sell refrigerated juice under the Minute Maid and Danone names throughout Europe and Latin America. In late 1996 Minute Maid decided to abandon its foray into the not-from-concentrate sector, and focus on revitalizing its from-concentrate chilled juice and frozen concentrate offerings. The company in January 1997 launched a new orange juice formulation called Minute Maid Premium through a $50 million promotion and advertising campaign—the largest marketing campaign in company history. Minute Maid claimed that this was “the first orange juice to deliver the taste sensation of eating a fresh, ripe orange, every time.”

Minute Maid returned to profitability in 1997 and had begun to close the gap between itself and Tropicana (which Seagram sold to PepsiCo, Inc. in August 1998). Although its turnaround was not yet complete, the company appeared to have been revitalized through the Minute Maid Premium launch as well as from its rapid international expansion. Although it was no longer number one in the United States, the company lay claim to the top spot in juices and juice drinks worldwide. Minute Maid had perhaps been wounded in the initial skirmishes of the orange juice wars, but had survived to fight another day.