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CEO talks challenges of citrus industry with students
The citrus industry is different from the 1950s when every member of the family had a glass of orange juice with breakfast. What once was a healthful drink is now considered high-sugar; what once was a staple of every grocery cart has been replaced by bottled water.
Headquartered in Winter Haven, Brown International Corp. has been manufacturing fruit and vegetable juice processing machinery since 1947, one of the many businesses tied to citrus production in Florida. As Brown CEO Charlie Gagliano told students in the MBA lecture series course recently, the business of growing citrus has changed drastically over the past 50 years -- and his company needs to explore new ways to stay relevant. The citrus industry is suffering from the nexus of lowering consumer demand and lower production due to disease and climate challenges.
"This industry, which I've fallen in love with, is a very difficult industry to succeed in," he said.
Gagliano, who spent 22 years in marketing for PepsiCo, told students that his privately held company has moved toward harnessing the byproducts of citrus due to industry changes. He is moving Brown International into essential oils and fruit peels in order to to gain an edge in the market. Orange and lemon byproducts can be used in everything from bath products to pest control.
Gagliano said it was difficult to convince his board of directors to pursue the byproducts route because it required an expensive investment into developing machinery that could get the most out of each piece of fruit. But, with crops worldwide threatened by diseases such as greening and canker in recent years, it made no sense to throw away the parts of fruit that weren't going into juice production.
"Byproducts are very expensive, but very profitable," he said.
The future of the citrus market is cloudy, Gagliano said, making it difficult to know which avenues the company should pursue. New fruit products, such as low-calorie juices, are prevalent today – but risky.
"No one has patience with a product anymore," he said, referencing the many different food and beverage products that come to market and compete with a dizzying array of options. "You don't have enough time to build a large degree of loyalty."
However, despite the changes in the market, Gagliano said the core mission of his company remains the same – to help his clients make a consistent, quality juice product that customers keep buying.
"We need to keep the same taste that the consumer is looking for every time they pick it up," he said.