The Squeeze Is On: Can Tropicana Reinvigorate OJ?

As many of you are already aware, I like to highlight products, retailers, and services that are winning in the most competitive industries—often mature ones with stagnant growth—by following the basics and trying unconventional techniques to spread their gospel. That being said, here is another headline that caught my attention as I was reading about coffee creamer, so here we go: “Tropicana struggles as Americans ditch OJ.”

In short, a once-popular staple isn’t doing so hot these days, and Tropicana—which in 2023 held about 30% of US market share for refrigerated OJ, according to Statista—is suffering. They are doing so poorly, in fact, that Tropicana recently received a $30-million emergency loan from PAI Partners, a private equity firm that took a controlling stake from Tropicana’s parent company, PepsiCo, in 2021, per CNN. 

 So, What’s Causing the Squeeze? 

Orange shortages driven by climate change, natural disasters, and disease, have nearly doubled orange juice prices since 2020. This turns off customers who, amid rising inflation, have become more conscientious about their spending. 

Additionally, brands in this space, including the cheaper Coca-Cola-owned Minute Maid and the bougier Simply Orange, have cited health concerns over orange juice’s high sugar content. This, paired with a shift toward on-the-go breakfasts (or no breakfast at all) over traditional sit-down meals, is reducing demand. 

As summarized, we’re just not drinking juice like we used to. While OJ consumption has fallen, functional beverages are on the rise, with prebiotic soda brand Olipop recently hitting a $1.85B valuation. 

What is the Remedy?  

For this purpose, we will disregard any macro-economic impact (natural disaster, imports etc.) and focus on the basics. Instead of abandoning what is working, champion the Blue Ocean Strategy (as highlighted in Blue Ocean Classics by W. Chan Kim and Renee Mauborgne). After all, these concepts consistently and constantly deliver results. 

The principles of a Blue Ocean Strategy include: 

• Focusing on attracting new customers and creating new markets 

• Worrying less about segmentation 
• Ditching overcrowded, overcompetitive markets 

Remember, the current state of the Tropicana business—more specifically the orange juice segment—is likely the result of looking to the competition for salvation, and as a result, finding themselves in a Red Ocean—that is, an overly crowded space where profit and growth prospects naturally shrink as products become more commoditized. When brands try to outperform rivals to grab larger slices of existing demand, the water often turns bloody, hence the moniker “Red Ocean.” 

As I have said in the past, sometimes the most effective strategy is to identify what works best for you and return to your strengths—OJ as the original functional beverage)—along with understanding your consumers, their buying journey, and influences to build a great user experience.  

In this case, Tropicana has the product, it just needs to understand how to solve the unmet needs of both new and existing customers.   

How Can We Create Your Blue Ocean?  

Let’s discuss it! Here at BSM Partners, nothing is impossible. Our comprehensive suite of services encompasses research, product innovation, regulatory affairs, nutrition, veterinary care, business strategy and transformation, consumer marketing and insights, import/export, as well as operations and engineering.  

Our unparalleled expertise has positioned BSM Partners as the world’s largest consulting and advisory firm in the pet industry, making us the trusted partner behind thousands of successful pet care and food brands for over a decade. Let’s talk! 

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About the Author

Eric Rittenhouse works at BSM Partners as Business Development Manager. His areas of expertise include business development, sales and trade marketing while helping brand companies uncover and execute on opportunities to strategically dominate their niche in the consumer product space. He has completed the Blue Ocean Practical Introduction certificate by the Blue Ocean Academy and is Action Selling Master Certified by Action Selling and The Sales Board.