Tropicana orange supplier Alico is done with citrus as biz turns sour
Hurricanes and disease have squeezed this citrus producer.
Alico, a citrus grower that supplies oranges to Tropicana, said it would wind down its citrus business after hurricanes and disease have made it difficult to see a profitable future.
The company announced Monday that it would stop investing in citrus and become a more diversified land and agriculture company. Alico has been producing citrus in Florida since the 1960s.
The move comes as oranges have become harder to grow and Americans are drinking less orange juice. “We’ve explored all available options to restore citrus operations to profitability, but the long-term production trend and the cost needed to combat citrus greening disease no longer supports our expectations for recovery,” Alico CEO John Kiernan said in a Monday-morning call with analysts and investors.
Alico’s contract with Tropicana expires at the end of the current harvest season, which runs through May. Alico said its next contract with Tropicana, which expires in 2026, would consist of fewer acres than expected and will be managed by a third-party company.
Alico shares were up about 20% after the announcement. PepsiCo, which owns Tropicana, was down about 1.5%.
The move marks a drastic change to Alico’s business model. The company made $46.6 million in revenue in its last fiscal year, which ended in September. Of that, $45.1 million was attributable to its citrus business.
Alico owns about 53,371 acres of land in Florida, and it has oil, gas, and mineral rights on most of that land, the company said.
