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Orange Juice Price Rise Higher Than Olive Oil as Apples Become Cheaper Alternative

Published April 8, 2024 2:34 PM
Shraddha Sharma
Published April 8, 2024 2:34 PM

Key Takeaways

  • Orange Juice Inflation is reportedly over 250% since 2019.
  • Adverse weather challenged major orange juice producers in Brazil in 2024 while global production is set to increase.
  • In response to soaring orange juice prices, some beverage makers are reportedly using apple juice as a replacement.

The cost of living has seen an increase since 2019, with food prices experiencing some of the most dramatic surges. A detailed analysis of inflationary figures reveals the price of essential food items has skyrocketed with orange juice right behind cocoa in a price increase. With a 40% increase in American groceries in four years, beverage makers have reportedly turned to apples.

The Orange Juice Conundrum

In an analysis by The Kobeissi Letter, orange juice emerged as a standout with a 260% price increase since 2019. Orange juice inflation places it second only to cocoa, outpacing the price hikes of staples such as olive oil, sugar, and various other essentials.

The analysis found that American grocery bills are now nearly 40% higher than four years ago.

Meanwhile, a recent report by The Grocer highlights  a 31% increase in the price of own-label orange juice in 2024. Meanwhile, the orange juice supply is expected to fall short of demand due to a combination of adverse weather conditions affecting major producing regions, particularly in Brazil.

The report notes that Brazil is grappling with the greening disease, which has severely impacted orange yields, resulting in a diminished supply of orange juice.

Global Production and Alternatives

The US Department of Agriculture provided  a slightly optimistic global outlook for FY24 on the back of increased output in the United States and Mexico despite low production in Brazil.

The report found that Brazil will face a 2% production cut and accounted for 75% of the global orange juice exports. Productions forecast in the EU were flat at 47K tons.

Global Orange Juice Production | Source: USDA
Global Orange Juice Production | Source : USDA

However, the production forecast failed to sustainably reduce the price. The USDA charts show that production peaked around the 2017/18 period and has generally been declining since then. There was a slight uptick in the 2020/21 period but production levels have not returned to their peak. Consumption follows a similar trend, with a peak around 2014-15 and a general decline thereafter. In the last two years, global production has struggled to meet consumption levels as per the chart.

Meanwhile, beverage manufacturers are increasingly turning to apple juice as a cost-effective alternative to orange juice. A recent social media post by the Stakeholder Consultant revealed that many popular juice blends, marketed under other fruit flavors, contained apple juice in major amounts.

For example, blends labeled as pink dragonfruit and lychee, guava and lime, and even tropical and berry, contained apple in 50% to 85% ranges. The trend, dubbed “applejuiceification,” could be the industry’s response to soaring orange juice prices.

Not an Ordinary Ingredient

The rising cost of food items, particularly orange juice, comes as a consumer shock.

Inflation continues to erode purchasing power, with manufacturers searching for more cost-effective alternatives in apples. And in return, economic realities are transforming the types of food that end up on consumers’ tables.

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