Michel Sallin is president and CEO of IMG Enterprises Groveland Fla which owns groves and a packinghouse in the Indian River area He also is president of the Indian River Citrus League

Michel Sallin is president and CEO of IMG Enterprises, Groveland, Fla., which owns groves and a packinghouse in the Indian River area. He also is president of the Indian River Citrus League.

Grapefruit supplies tighten as acreage begins to stabilize

Doug Bournique, executive vice president of the Indian River Citrus League, calls Indian River grapefruit “the Rolls Royce of fruit.” That description could be more apt than ever now that supply is limited due to mostly involuntary acreage reduction.

At peak production in the 1990s, the Indian River grapefruit region had about 85,000 acres of grapefruit trees — now, it’s down to about 40,000 acres.

The plunge in tree count resulted from some loss to development projects, as might be expected in Florida, but a great deal is also due to citrus canker, an exotic Asian invader.

When it began spreading in the early 2000’s, the state mandated an eradication program, destroying trees within a 1,900-foot circle of any canker ‘hit’ in a grove.  That wiped out some of the region’s finest groves. Hurricanes in 2004 and 2005 also devastated crops and further spread canker.

The state shelved the eradication program. If it hadn’t done so, a great deal of the state’s citrus would have been bulldozed.

Quite a few growers declined to replant until a plan was developed to handle canker and citrus greening, another exotic disease. That propped up the grapefruit market, but also presented a marketing dilemma: Who gets to buy the product?

“We won’t be able to supply all the retailers who want Florida grapefruit,” says Michel Sallin, president & CEO of IMG Enterprises, Groveland, Fla., which owns groves and a packinghouse in the Indian River area.

Sallin, also president of the Indian River Citrus League, is particularly concerned about maintaining the European and Japanese markets.

“For the past 30 years, all the best markets in Europe had Florida grapefruit,” he says. “Now, there’s not enough for everybody. Retailers have to choose whether to sell our grapefruit at a premium or lesser quality grapefruit from Spain, Turkey or Israel for a lower price. Our grapefruit sometimes carries a premium of as much as 10 Euros per carton.

“Japan is a challenging market, too. They were very disappointed with the Turkish grapefruit they tried. The Japanese people like a premium product. Retailers are going to have to change strategy,” Sallin says.

“The market niche is changing for Florida grapefruit. It’s not going to be for everybody — there’s going to be a lot of disappointment. It’s going to be a challenge for us in Europe. With the decrease in Florida’s production, every other grapefruit-producing country boosted production.”

About half of the state’s grapefruit gets exported but that number rises considerably for individual packers.

“IMG exports 70 percent of our grapefruit — half to Europe and half to Japan. Our best market is Europe. It used to be Japan, but Japan’s economic troubles reduced that market. Our best grapefruit gets exported,” Sallin says.

At United Indian River Packers just north of Vero Beach, Fla., Japan remains the top market. “Sixty percent of our grapefruit goes to Japan, 30 percent to Europe, and 10 percent to the domestic market,” says Matt Combs, United’s packing house manager. The Japanese love our grapefruit.”

Citrus canker creates problems in sending fruit to the European market, Combs says.

“They won’t accept any canker. For Europe, we have to get a harvesting permit in the grove. Then a USDA inspector checks every lot to make sure there’s no canker. It has made things a lot tighter.

“We’re limited on fruit that can go to Europe. Japan used to be that way but they changed because canker is already in Japan. It makes exporting to Japan simpler compared to Europe,” Combs says.

Europe’s canker certification program officially exists to protect Italian and Spanish citrus from infestation. But, market protectionism could be the real reason behind it, Sallin thinks.

“Science tells us the disease cannot be transmitted by the fruit. The Europeans haven’t taken the time to analyze the science. It’s why Europe has the best price for our grapefruit,” Sallin says.

With both Europe and Japan mired in economic downturns, Sallin is concerned about the Florida grapefruit industry’s heavy dependence on exports.

“Yes, naturally, we’re worried. The Euro is getting weaker, which makes our product more expensive. The Japanese economy is not good, either,” he says.

“The past two years, when we started to pack fruit in Florida, the European and Japanese markets were emptied — out of grapefruit. This year, they have inventory in Europe, so it is going to be a little more difficult. In Japan this summer was very bad on consumption of grapefruit from South Africa. South African quality was very poor this year. “

Might Japanese consumers who had a bad taste experience with the poor South African fruit turn against all imported grapefruit?

“It’s a market based on taste, so it’s a risk,” Sallin says. ”We have to do a lot of marketing work there on differentiation of Florida grapefruit from fruit from other areas.”

The industry should get busy building an image in Europe, as well, he says.

“European consumers might be totally confused. With Florida’s decline in acreage, it has opened the door for fruit from Turkey, Israel and Spain which doesn’t have the taste our fruit has. Europeans might be disappointed by the grapefruit they’ve been buying, without knowing why. We’ve not done a good job of promoting the Florida image in Europe.”

About 80 percent of Florida’s grapefruit production comes from along the Atlantic Coast in Martin, St. Lucie and Indian River counties, long known for its world-recognized Indian River brand.

Brix tests show the thin-skinned Indian River grapefruit really is sweeter than the competition, Bournique says.

Indian River fruit must be grown in that relatively compact geographical region. USDA, in 1935, gave the first federal marketing order to Indian River citrus, protecting the brand. It made cooperative international promotion possible for a distinctive product.

“Our fruit has unique qualities,” Bournique says.

He thinks the grapefruit acreage decline is bottoming out. “We’re starting to see a lot of growers replanting despite the disease pressure. They’re fighting to stay in the business — they’re investing in it. They’re working hard on every aspect of disease control for canker and greening.”

Florida citrus growers pumped $20 million normally slated for marketing into new university and USDA research on the diseases. “That investment is starting to show signs of paying off. Researchers are getting close to some answers,” Bournique says.

“We had to do it. What’s the point of running TV commercials if everybody is out of business and there’s no product to promote? We had to do a massive infusion of money and put it into direct applied research. The brightest citrus researchers in the world were brought in to work on this project. These guys are good — it’s exciting to see where they are on a lot of levels. They’re learning how to get these pests and save the industry.”

But, since the scientists work with trees, the research can’t quickly conclude.

“We don’t have time — the industry needs solutions in a very short time frame.” Bournique says. “With tree crops, that’s difficult. But the researchers are making strides. They’ve found some silver bullets that could work, but they still have to be tested. We don’t want to have trees that are resistant to the diseases, but have bad-tasting fruit.”

T.P. Kennedy, whose family runs about 8,000 acres of citrus in the Indian River area and owns United Indian River Packers, is upbeat about grapefruit’s future prospects.

“We’ve been replanting grapefruit for seven years,” he says. “We’re replanting 500 acres this year. Ninety percent of our holdings is grapefruit.

“We’re figuring out canker — we know how to work with it. With greening, we’re on the right track; we’re using a lot of fungicide sprays. Trimming diseased trees is important. We’ve learned how to deal with these diseases,” Kennedy says.

Dealing with diseases has doubled production costs for most growers, Bournique says.

“Production costs were about $1,000 an acre — now it’s more like $2,000. Returns are good, so it’s worth the risk. If research can close the gap on these pests, we should be okay. I’m sensing by nursery sales, which are getting stronger, that grapefruit acreage has hit the bottom and acreage will increase.”

The Indian River Citrus League is a good gauge of industry trends. At its peak in the mid-1990’s, the group had 1,600 members. Now it has 900. That number has stabilized in recent years, however.

“We’re getting a handle on this thing,” Bournique says. “A few years ago I might not have said this — but I think we’re going to be okay.”

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