BIG beverage business Lion has singled out fruit juice as a candidate for strong sales growth - and maybe even exports - after splitting its dairy and drinks division to launch The Daily Drinks Company.
Just 50 per cent of Australians are getting their recommended daily intake of fruit, yet a regular glass of fresh fruit juice could easily remedy that problem and tap into emerging market opportunities with nutrition-conscious consumers says The Daily Drinks Company boss Charmaine England.
Even bigger sales potential exists among teenagers with just one per cent of young Australians consuming the recommended dietary intake of fruit or pure fruit juice each day.
Ms England, managing director of the month-old company, was in the heart of Lion's fruit supply territory to officially launch the new business at its Leeton juice plant in southern NSW.
She was also keen to assure citrus growers the company's growth ambitions meant it needed their fruit, and more of it.
The Daily Drinks Company (TDDC) intended to enhance long-term contract incentives and develop management advisory strategies to help producers and their offspring feel confident about profitability and family succession plans for their orchards.
"We've invested $20m in our two juice plants in the past two years - that in itself sends a positive message about the need for sustainable volumes of fruit to keep these sites operating efficiently," Ms England said.
"We're moving from a one-size-fits-all business approach to investing behind our blockbuster brands, and in the channels and categories that are offering the most growth, value and opportunity."
The Daily Drinks Company incorporates Japanese-owned Lion's juice brands Berri Australian Grown, Daily Juice Company, Just Juice, Quelch, Prima, Mildura and Zooper Dooper water ice products.
Last year the division paid out about $26 million to source citrus (mostly oranges), apples and pears for its year-around fresh juice and long shelf life juice and fruit drink products.
Most of its freshly squeezed and chilled juice comes from Leeton in the Murrumbidgee Irrigation Area (MIA), where the 40-year-old plant is dedicated to the Berri Australian Grown chilled juice range.
MIA growers are a key source for 6 million oranges processed each week at Leeton and Lion's other juice plant at Smithfield in Sydney.
Supplies are also drawn from the Murray Valley and South Australia's Riverland.
TDDC also buys 2.5 million apples and 200,000 pears weekly for juicing from South Australia, Central West NSW, Northern Victoria and the Victoria's Gippsland and Central Highlands.
Although the new company is the biggest player in Australia's juice market with a hefty 40pc share of fresh chilled sales alone, Ms England said splitting the business from Lion's dairy division opened up even more expansion incentives.
"It's really about focusing our growth on a specific area of the non-alcoholic drinks market as an independent unit which can seek out new opportunities," she said.
In a market crowded with aggressively promoted, yet nutritionally dead and calorie-dense snacks and carbonated drinks, fresh juice was "inherently a very natural and healthy beverage with a great role to play in improving the nutritional base in Australian diets".
"A glass of orange juice is effectively as good as eating an orange - it delivers up to 30pc of a child's Vitamin C needs, up to 40pc of your folate needs and a good amount of potassium, too."
Although Lion's milk, yoghurts and cheeses such as the Dairy Farmers, Pura, Dare and King Island lines had represented about 80pc of the previously combined business, Ms England said the "little sister" was now on her own and keen to grow and "beat the drum for juice".
TDDC's creation is being billed by Lion as a key point in the company's turnaround strategy after several years of losing sales in the dairy sector, largely to cut-throat supermarket milk price campaigns.
"Having a dedicated structure around the non-alcohol ready-to-drink business ensures it receives the focus and support required to reach full potential," Ms England said.
TDDC, which had a $400m gross turnover last year, would draw further on Lion's Japanese parent, Kirin, for research and development support, quality processing expertise and plant design ideas.
She even hoped she could also "beat the drum" for Australian juice sales in Japan.
"I'm visiting our Japan friends early next year. I'd like to see what opportunities may possibly exist there," she said
Andrew Marshall
National agribusiness writer for Fairfax Agricultural Media.
National agribusiness writer for Fairfax Agricultural Media.
