Develop the problem statement

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The country losing out in the breakfast juice battle By Daniel Gallas BBC South America Business Correspondent

Brazil is the world's biggest producer of both oranges and orange juice, but changing breakfast tastes, especially in Europe, mean the country's reliance on the fruit may have to change.
Marco Antonio dos Santos says he was not born under an orange tree. But that's about the only event in his life not linked to oranges, he jokes.

The 54-year-old is from the city of Taquaritinga, in the state of Sao Paulo. He has dedicated his entire life - as have several generations of his family before him - to making Brazil the world's largest producer of the citrus fruit.
And it has paid off. One in every three oranges in the world is now grown in a relatively small area in the states of Sao Paulo and Minas Gerais.

Half of all orange juice drunk worldwide is from Brazil too.

The country's unquestionable global dominance would suggest that orange producers like Mr. Santos have little to worry about, but recent numbers suggest otherwise.
Three years ago Brazil produced 400 million boxes of oranges. In the latest harvest for 2016-17 that number had fallen to just 242 million boxes.

"About 15 years ago, I remember we had about 20,000 orange producers in our region. Now we are down to about 6,000," says Mr Santos.
Much of the decrease can be linked to changes in breakfast tastes, particularly in Europe, putting the future of what was once the world's most dominant breakfast beverage in jeopardy.
Brazil started exporting oranges in the 1960s when Florida, previously the world's biggest orange producer, was hit by a citrus greening disease, which makes the fruit unpalatable and eventually kills the trees.

By the 1980s, Brazilian orange producers had achieved a global dominance that remains to this day.
Giant Brazilian juice firms Cutrale and Citrosuco built factories in the US and Portugal as well as modern terminals in major ports such as

Ghent and Rotterdam. The scale and low costs achieved by these investments made it virtually impossible for new players to rival them.
Yet increasingly Brazil's dominance in the sector is becoming a hindrance.

One problem is that it puts too many oranges in only one basket: the external market. More than 95% of its production is shipped abroad, the majority of it in the form of orange juice.

So when there are fluctuations in the exchange rate, the price of the commodity or changes in habits abroad, manufacturers have nowhere else to sell their product.

"This much concentration on external markets is unusual," says Ibiapaba Netto, who heads CitrusBR, the association that represents the big orange juice players.

"If you take the Brazilian meat industry, for example, they only export about 20% of their production. The other 80% is sold domestically. So they are never too exposed to problems abroad."
But turning towards their home market wouldn't solve the problem for orange producers either, because Brazilians just don't drink enough orange juice.

In Brazil a typical individual drinks just 15 litres a year compared to the 22 litres of an average European or American.
But the biggest threat to Brazilian orange producers is that orange juice has become less popular in Europe, especially in the UK.

For most of the post-World War Two era, orange juice was the dominant breakfast beverage. But not anymore.
"Modern life has a new rhythm and many people are now skipping breakfast, or getting drinks on the go. The cereal industry is facing the same issue," says Mr Netto.

Fruit juices are also losing their reputation as a healthy option, with some nutritionists claiming they can be as unhealthy as fizzy drinks.
As a result consumers have flocked to new breakfast drinks, such as smoothies and vegetable-based "detox" juices.

One winner in the "juice battle" is coconut water, which has less than half the calories of orange juice. Between 2012 and 2015 in the UK, orange juice consumption fell by 100 million litres, while consumption of coconut water rose by 80 million litres, according to CitrusBR.
Despite changing trends, orange is still juice drinkers' preferred choice and has a 30% market share.

A better harvest in Brazil and low international stocks could also see orange production rebound this season. According to the government, there will be a 50% increase in the number of boxes produced in the 2017-18 harvest.

Brazilian growers are also fighting back.

For each box of oranges they produce this season, farmers will pay six cents (of a Brazilian real) towards a UK and US marketing campaign promoting the virtues of their produce abroad. Unsurprisingly, they disagree that orange juice is unhealthy.

But for many orange producers in Brazil it is too little too late.

Many in Sao Paulo and Minas Gerais have already abandoned orange production, with some now planting lemons and guava for domestic markets instead. In 2015, Cutrale bought US banana company Chiquita to try to diversify.

But Mr Santos and other traditional orange growers are not willing to lose a fight their families have fought for generations.

"Things will never go back to being what they used to be like. We won't ever have that many mouths for our oranges anymore. But the market is reaching a new equilibrium."

Expectations---Paper Must Include:

•Format: executive summary, detail, conclusion.

•Describe the business situation, including the macro-environmental and micro-environmental conditions facing the organization.

•Develop the problem statement: the opportunity or threat facing the organization.

•What alternative strategies and programs would you consider to deal with the opportunity or threat to the organization?

-Present each alternative in sufficient detail to give the reader an idea of why it may be beneficial.

•Recommend one or more of the alternatives you have identified. Inform the reader of your reasons for these recommendations.

•Describe tracking metrics to determine whether your recommended strategies and programs are effective.

-Be sure to include both intermediate and conclusive metrics to guide management's redirection of ineffective strategies.

•Summarize what you have learned from your critical analysis.

•Remember, this requires you to know your topic and explain why it is relevant to your audience/business.

Reference no: EM131869539

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