Tags: US | Tropicana | Price | Hike

Tropicana Sizes Shrink, Prices Rise On Citrus Woes

Wednesday, 10 Mar 2010 03:10 PM

Pepsico Inc. is raising prices on its popular Tropicana orange juice because of the deep freeze that hurt much of Florida's citrus crop.

The company said Wednesday it is shrinking its most popular size by about 8 percent — while maintaining its price — and raising the price on another size starting in May.

The 64-ounce container of orange juice drop to 59 ounces. The suggested retail price remains at $3.59.

The price of Tropicana's gallon container of pure premium orange juice will rise between 5 percent and 8 percent. Right now it costs $6.49.

Citrus growers in Florida — the nation's top orange producer — lost more than 4 percent of their orange crop because of freezing weather in January.

Tropicana spokeswoman Jamie Stein said the company spent a while looking at the impact of the winter freeze and wanted to make changes without affecting people's grocery bills too much.

That is why the company, based in Purchase, N.Y., chose to shrink its 64-ounce container rather than raise the price outright, although it's a per-ounce price hike.

"We're doing this so that we don't have to take the price up on our core product," she said.

Food and beverage makers react to changing ingredient costs by raising prices, changing products sizes or both. It's a way to protect their profit margins, and in the case of shrinking packages, offer less to shoppers so they can still buy products without having to pay more money at once.

Florida had eight straight days of below-freezing temperatures in January. Growers said it was an unseasonably long freeze, though the damage was less than expected. Some oranges that did survive are expected to be smaller than normal. Most of the oranges Florida produces are used to make juice.

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