Australia’s changing fruit juice drinking habits have prompted major beverage processor Lion to re-think its operations in Leeton and Sydney.
A $28 million upgrade to the Lion Dairy and Drinks juice business will see faster, state-of-the-art processing technology from the US installed late this year at Leeton, but 50 jobs lost at its two Daily Juice Company processing plants.
The cuts represent almost half the workforce at the Leeton site where more than 60 workers currently process, blend and pack the Berri brand chilled juice and Mildura fruit juice drinks.
Changes in the juice marketplace, including a decline in popularity of three-litre and two-litre juice products, have pushed the company to respond.
Australians are falling out of love with traditional breakfast servings of citrus, apple and pineapple juice, instead swinging to a whole new spectrum of chilled fresh vegetable and fruit juices and interesting blends.
Notable has been an annual five per cent slide in sales of typical large plastic bottle and “brick packs” of ultra high temperature (UHT)- processed juice lines often found in family refrigerators.
These long life products are now increasingly being “squeezed” off the shelf by trendy new premium-priced lines in glass or small cartons containing everything from banana and celery juice to carrot, kale, mint, beetroot and chia.
Daily Drinks Company managing director, Charmaine England, said consumers were swinging to smaller pack formats and wanted more craft and specialty juices.
The Daily Drinks Co’s modernisation plans would upgrade its juice blending equipment, creating capability for high quality, complex blends.
In a three-year upgrade plan it will also install high speed packing equipment at Smithfield, and offer more scope for customised products while reducing the company’s environmental impact, too.
“It’s important we are best set up to ensure we are agile and can easily adapt to the changing needs of the market,” Ms England said.
“We’ll continue to target the high-value fresh juice category, fruit and vegetable juice blends and other key non-alcoholic ready to drink categories, where we believe we can sustain profitability and category growth over the long term for the benefit of our business, growers, and customers.”
However, while fresh juice options get more sophisticated and sales are growing at about 2pc annually, the entire juice industry is fighting a rear-guard action to defend its healthy reputation.
Peak lobby group Fruit Juice Australia (FJA) says fruit juice has become unfairly demonised in the so-called “war on sugar”.
Australian citrus juices naturally contained about 10pc sugar said FJA regulatory and technical affairs manager, Colin Felder.
He said no extra sugar was found in pure or freshly-squeezed Australian juices (as opposed to all fruit drinks or carbonated beverages) and overall fruit juice contributed to just 3.5pc of the daily sugar intake in our diet, according to independent research.
It also contained nutritional goodness, including Vitamin C, folate and potassium - benefits which were being completely forgotten because of negative talk about sugar.
Consumers of fruit juice also rated with a better diet score than non-consumers and consumed less energy from discretionary foods.
"Given 80pc of Australian children aren't getting the World Health Organisation’s recommended two servings of fruit each day, we see a lot of reasons to encourage people to drink a small glass of fruit juice."
Japanese-owned Lion says its juice developments underpin its ambition to be a leading nutritional beverage company with sustainable profit growth.
It boasts a 10-year strategy to transform its dairy and juice businesses and champion the nutritional credentials of the portfolio, while also building its presence in high-value Asian markets.
Lion’s workforce of 6700 in Australia and New Zealand spans 34 sites, including juice plants, milk, cheese, yoghurt factories, dairy farms, large and craft breweries and wineries, plus more than 40 Liquor King retail outlets in NZ.
Meanwhile as part of The Daily Drinks Company’s modernisation drive Lion will re-name the Leeton plant in the Murrumbidgee Irrigation Area, The Leeton Juicing Company, recognising its focus on fresh processing.
In an Australian first, world class Ice Gen technology will be installed at Leeton, enabling the plant to seal in the natural freshness of juice immediately after extraction and retain this freshness during transportation.
Leeton’s current extraction role for The Daily Drinks Co and Lion’s cider business is also being gradually extended to include production of high quality fruit and vegetable juice for other industrial customers.
