The Orange Juice Industry

A. The various forms of orange juice—fresh, frozen, and single-strength.

Orange juice is the natural liquid that is squeezed from mature oranges. The taste and appearance of freshly-squeezed orange juice deteriorates rapidly, often within hours of being squeezed and exposed to air. As a result, the commercial market for orange juice is dominated by processed products of various kinds having a shelf of between four weeks and 12 months.  Approximately 80% of all oranges are processed for their juice.

Orange juice is commercially processed for retail sale in either of two ways. Frozen concentrated orange juice ("FCOJ”) is the retail product which, when mixed at home with three parts of water, creates a potable juice. For many years, FCOJ was the most popular form of processed orange juice sold at retail. In the 1950s, it accounted for about 70% or more of the orange juice market. By 1989, however, its popularity had declined, and it accounted for less than 50% of the orange juice market.

The other type of processed orange juice, finished single-strength orange juice (“SSOJ”) [also referred to as ready-to-serve orange juice], is packaged for consumption without any further steps required of the consumer. There are two basic types of SSOJ: juice that has been reconstituted by commercial processors from industry-strength concentrate, and freshly squeezed orange juice that has been pasteurized.

B. The process for manufacturing orange juice concentrate.

There are three basic steps in the manufacture of orange juice concentrate: extraction, finishing, and evaporation. First, whole oranges are placed in a press machine which extracts liquid from the oranges. This liquid includes pulp and seeds as well as bits of rind and peel. Then, the extracted liquid is moved through pipes to a finisher. The finisher separates the pulp, peel and seeds from the stream of liquid. The liquid which leaves the finisher is orange juice. This juice is moved through pipes to an evaporator, where the water is evaporated away to produce concentrate.

The product that is created by the evaporator is often referred to as solids or soluble solids. If the concentrate is intended for resale to secondary or tertiary processors (see Section C, below), it is packed in either 55-gallon drums or in tankers.

C. The organization of the orange juice industry.

The industry is comprised of primary processors, secondary processors, and tertiary processors.

The companies that manufacture concentrate from fresh oranges are commonly referred to as primary processors. Most primary processors are located in the states that grow oranges—Florida, Texas and California. The product manufactured by primary processors is termed concentrated orange juice for manufacturing (“COJM”). This product is generally sold in bulk quantities (tankers or 55 gallon drums). Contracts for future delivery of COJM are traded actively on various commodity exchanges.

Manufacture of a SSOJ or FCOJ often requires blending of COJM from several sources; the companies that blend varieties of COJM are referred to as secondary processors.  Since each batch of COJM may possess differing characteristics, such as degree of sweetness, acidity, color and flavor, blending is required to obtain a uniform product. The blended product resulting from secondary processing may be called either COJM or FCOJ.  Up to sometime in the 1970s, the vast majority of secondary processors (also known as blenders) were located in Florida.

A third stage of processing (tertiary processing) takes place at the local level throughout the United States.  Tertiary processing is the mere diluting of a blended COJM into a packaged product for retail sale, either as SSOJ from concentrate or FCOJ.  A large number of these tertiary processors are supplied by companies that only perform secondary processing. Some primary and secondary processors are vertically integrated to perform secondary and tertiary processing as well.

D. Hot-pack juice and cold-pack juice.

There are two basic methods for packing juice at the tertiary stage: “hot pack” and "cold pack.”  Cold pack refers to reconstituted juice that is mixed at temperatures of 170 to 183 degrees Fahrenheit, and which is then, after being cooled, packed in plastic containers or coated paper cartons.  This product is called cold-pack juice because it is packed at a cool temperature, and thereafter must be kept refrigerated until consumption. It has a shelf life of about four to six weeks.

"Hot pack” is a method that became popular in the mid-to late 1970s. It refers to reconstituted juice that is mixed and pasteurized at temperatures of 185 to 201 degrees Fahrenheit, and then immediately packed and capped in glass containers. As the juice cools in the glass bottle, it creates a vacuum seal. The result is a product that is shelf-stable for up to 12 months.

There are two principal advantages to hot-pack juice. It can be stored at room temperature, thereby eliminating the expense to the retailer of refrigeration; and it has a shelf life of many months, thereby reducing losses due to spoilage.

These advantages are partially off-set by three disadvantages. Hot pack juice can only be packed in glass containers, which are substantially more expensive than plastic or coated carton. Moreover, hot pack juice requires more elaborate (and more expensive) packing machinery.  Finally, hot-pack juice is pasteurized at a higher temperature and for a longer period of time that cold-pack juice.  The intensity of the pasteurization adversely affects the juice’s taste and texture.

E. Co-packing.

"Co-packing" is an arrangement between two tertiary processors. Under such an arrangement one of the processors supplies concentrate and packaging materials to the other, who then reconstitutes the concentrate, packages it into SSOJ, and delivers the product according to the directions of the originating packer.

Co-packing can be a solution to any one of several different business problems. If the originating packer is operating at capacity and still cannot satisfy the demand for its products, a co-packing arrangement allows it to increase its production volume without investing in new equipment. As another example, if the originating packer lacks the equipment to make a certain type or size of product (for example, a 10 ounce hot pack orange juice), a co-packing arrangement allows it to add that type or size to its product line, again without investing in new equipment.

One of the most common reasons for co-packing is to penetrate distant markets. If, for example, a processor in Chicago wants to penetrate the market in Virginia, co-packing with a processor in the state of Virginia will result in a substantial savings on freight, since the raw materials being shipped do not include the water needed to reconstitute CMOJ into SSOJ.

F. Market incentives for making and selling adulterated orange juice.

Adulteration became a large-scale problem in the orange juice market during the 1950s and 1960s, when there was explosive growth in the fruit juice market.  In the 1950s, fruit juices were adulterated mostly through simple dilution with extra water and the addition of sugar, acid and colorant. By the 1970s the relatively crude techniques of dilution had given way to sophisticated recipes of additives and chemicals that were specifically designed to mask the fact of adulteration.

Beginning in the late 1970s, two circumstances combined to make adulteration an especially acute problem in the orange juice industry. First, there were a series of devastating freezes which greatly reduced the orange crop in Florida. This reduction in the supply of oranges greatly increased the economic incentive to adulterate orange juice.

Also in the 1970s, the orange juice packing industry was changing by way of a substantial increase in the number of secondary and tertiary processors outside the state of Florida. As of 1972, 77% of the CMOJ produced in Florida was ultimately packed in retail containers, and only 15% of the bulk concentrate was shipped to other states for packaging in retail containers. Concentrate packed in Florida has the highest assurance of quality because Florida is the only state that requires orange juice operations to be subject to continuous inspection by the U.S. Department of Agriculture.

By 1984, the percentage of bulk concentrate shipped to other states for packaging had increased to 45%.  By 1990, more than half of all retail orange juice products were packed outside of Florida, and therefore beyond the prophylactic watch of U.S.D.A. inspectors.

The most common forms of orange juice adulteration are: (a) dilution with extra water below the standard of 11.8 degrees brix; (b) extension of orange juice with orange pulpwash solids blended with a related amount of either beet sugar, corn sugar, or cane sugar; (c) the addition of undeclared grapefruit solids when the price of grapefruit is much lower than that of orange juice ; (d) combinations of (a), (b) and (c) , along with preservatives and specialized recipes of ingredients.

G. The benefits from preservatives and sterilants.

1. The economic benefits of GRAS preservatives.

Preservatives are an economic tool, in that they can extend the shelf life of orange juice and other perishable food products.  They also reduce losses due to spoilage.  Preservatives generally recognized as safe (GRAS), such as sodium benzoate and potassium sorbate, are harmless when added to orange juice.  However, in or around the 1960s the FDA, at the behest of the Florida citrus industry, issued a standard of identity for reconstituted orange juice that effectively banned preservatives from orange juice products sold at retail. 

2. The additional benefits of sterilants such as DEPC.

Diethylpyrocarbonate (DEPC) is a chemical sterilizing agent that is effective against a variety of microorganisms. DEPC is used in aseptic cold-fill packing. In that process, juice is sterilized by the use of a chemical rather than by the application of heat (pasteurization).  The sterilized juice is poured into sterilized containers under sterile conditions, so that the product will be bacteria-free and shelf-stable. (5/91 Marshall Dep. 32)  Sterilization with DEPC is deemed superior to heat treatment because it does not impair aroma or vitamin content.

When DEPC is added to an aqueous solution such as orange juice, it hydrolyzes ( i.e., it breaks down into its constituent compounds) within 24 hours, and it is no longer detectable as DEPC. If a product treated with DEPC is sealed suitably after treatment, the preservation effect lasts indefinitely.

DEPC was created by chemists in the 1950s.  In 1959 a German corporation obtained a U.S. Patent for Baycovin, a commercial version of DEPC.[1]  In the 1960s, the FDA approved DEPC for use as a cold-fill sterilizer in wines and beers.

During the late 1960s Schlitz Brewing Co. of Milwaukee established a subsidiary to manufacture DEPC.  The capacity of this facility was greater than what Schlitz could use for its brewery operations, so Schlitz solicited the fruit juice industry to work with Schlitz on experiments regarding the use of DEPC in fruit juices. Home Juice joined in these experiments. Schlitz intended to use the results from these experiments to support a petition to the FDA to extend the approved uses of DEPC to pure fruit juices. (5/91 Marshall Dep. 40-45)

3. DEPC’s carcinogenic effects.

In 1971, scientists discovered that after DEPC hydrolyzes, some of DEPC's constituent compounds tend to recombine with ammonia, which is naturally present in orange juice, to form urethane. G. Lofroth and T. Gejvall, Diethyl Pyrocarbonate: Urethane Formation in Treated Beverages, SCIENCE, vol. 174, pp. 1248-50 (December 17, 1971). Urethane was identified as a carcinogen in 1943. A. Nettleship, et al., 4 J. Nat. Cancer Inst. 523 (1943).

In July 1972, the FDA banned DEPC as a food additive. There are a few countries in Europe, however, that still permit the use of DEPC in limited circumstances. 

[1] The patentee was Farbenfabriken Bayer Aktiengesellschaft of Leverkusen, Germany.