Sunkist Report

In the citrus year ending last October, U. S. citizens consumed 163,029 carloads of oranges, lemons and grapefruit--39% more than the five-year average through 1929 and an all-time record. Two-thirds of the U. S. citrus crop is harvested in the California-Arizona area. Except for a smallish Texas production (largely grapefruit), Florida accounts for the rest.* And since three-fourths of the California-Arizona crop is marketed by California Fruit Growers Exchange, that famed co-operative is by far the largest factor in the U. S. citrus industry. Last week the 13,500 fruit-growing members were thumbing through the long report presented fortnight ago by General Manager Paul Stuart Armstrong at the Exchange's annual meeting in Los Angeles.

One of the biggest and most successful co-operatives in the world, Russia included, California Fruit Growers Exchange evolved from local marketing associations started in Southern California in the 1890's. Today growers belong to packing associations which grade and pack their fruit at cost. The packing associations belong to district associations, which in turn elect the 25 directors who govern the big central Exchange. No fruit except citrus is handled.

The Exchange has selling offices in all big U. S. cities, regulates the flow of fruit to market, maintains research laboratories, owns lumber mills (boxes), operates orange and lemon processing plants (oils and extracts), promotes the interests of the industry in general, California's in particular. It works constantly for reductions in freight rates, which, with refrigeration, represent about one-third of the wholesale value of California citrus. But most notable achievement has been to make orange juice at breakfast a national institution.

Since 1907 the Exchange has spent $21,600,000 advertising its brand name Sunkist. Last year its advertising budget included $1,450,000 for oranges, $581,000 for lemons, $34,600 for grapefruit. Average gross return to growers was about $2.30 per box. For advertising the Exchange assessed each grower 5-c- per box for oranges, 3-c- for grapefruit (Florida dominates that market), 10-c- for lemons, of which there is a perennial surplus. All other Exchange services cost 5.31-c- per box, and including those of district exchanges (less than 1-c- per box) total marketing and advertising charges amounted to about 4% of gross sales, which were more than $100,000,000.

General Manager Armstrong booms the doctrine of advertising when it is needed, not solely when it can be afforded. He can justify his doctrine by the fact that citrus consumption rose through Depression when sale of many other fruits declined. A husky six-footer who entered the Exchange directly after graduation from the University of Michigan (class of 1915), he worked up through the advertising department, helped develop the orange-promoting Sunkist juicer, now urges, among other citrus uses, lemon juice as a hair rinse.

Next to petroleum, citrus is California's biggest industry. In the past half century some $2,000,000,000 worth of citrus fruits have gone to market, a figure larger than total California gold production since 1849. Outlook for the current citrus year in California is rosy, since Florida groves were badly frosted last winter.

*Despite the trade obstacles each State has raised against the other, Florida's oranges sell briskly in California, California's in Florida.

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