Who We Are

1
(No Transcript)
2
Who We Are

• Oldest and largest continually operating
  agricultural cooperative in the world
• Begun in 1893 by California Citrus Growers

3
Where We Came From

• CA Growers faced with
• Low prices
• Undeveloped markets
• Fragmented selling and buying systems
• Going broke

4
Consolidated Efforts

• Sunkist Growers, Inc

5
Sunkist Today

• Billion international market
• Most widely recognized brands

• 60 CA/AZ fresh fruit market share
• Extensive marketing network
• Real-time marketing/sales communication system
• Unparalleled transportation system

6
Global Licensing
Millions of Sunkist-branded products in stores
around the world
7
Other Sunkist Initiatives

• Sunkist Global, LLC
• Source complementary and counter- seasonal,
  non-member fruit
• Sunkist/Taylor, LLC
• Fresh pre-cut fruits and vegetables

8
To Customers and Consumers

• Quality

• Safety

• Dependability

• and

9
Tradition
Premium Values
Grower Viability
Sales Velocity
10
Mission

• To deliver the highest quality citrus fruit to
  our customers and the highest possible returns to
  our Growers.

11
Sunkist Structure

• Federated non-stock
• Not-for-profit cooperative marketing association
• Three levels of membership

Sunkist Growers, Inc
District Exchange
Packinghouse
Grower
Grower
Grower
12
Affiliate Packinghouse

• Harvest
• Wash
• Grade
• Pack
• Ship

13
District Exchanges

• Non-profit cooperative association
• Direct involvement with grower-members in
• Representation
• Voting
• Distribution of sales proceeds

14
Sunkist Sales and Marketing

• Oversees quality assurance
• Protects against credit losses and guarantees
  full payment of fruit
• Handles all claimswith a high success in
  settlement and return of funds

15
Grower Agreements

• One year contract
• Sunkist markets all fruit from contracted acreage
• Proceeds returned through the District Exchanges
  and packinghouse to Growers
• Operations funded through annual assessment

16
Current Membership

• 15 District Exchanges
• 30 individually owned and managed packing
  companies
• 40 packinghouses
• 3,000 CA/AZ Citrus Growers

17
Sunkist Board

• Elected annually
• Number of Directors varies from year to year
  since based on volume
• Equitable representation
• Size ranges from 24 to 28
• Directors must be Sunkist Growers
• Board selects President and CEO

18
Board Committees

• Finance/Audit
• Sales Policy and Marketing
• Product, Research Technical Services, Licensing
  Brand Strategy
• Governance
• Executive

19
Governance Review

• Two year review of policies
• Board size
• Flexibility
• Adaptability

• Decisions are objective, informed and for the
  good of Sunkist Growers as a whole

20
Drink an Orange
21
Products Plants

• A home for our other fruit
• Purchase of small marmalade factory Ontario, CA
• Construction of second plant in Corona, CA
• Third plant added in Yuma, AZ

22
Why Products

• Keeps fresh packing lines moving by removing
  lower grades
• Creates price floor, Growers receive compensation
  for all their fruit

23
Business Challenges

• Fruit volume fluctuations from year to year
• Low volume Freeze years
• Operating fixed costs remain constant

24
Sunkist Evolved

• Three plants consolidated into two
• Ontario, CA
• Tipton, CA
• As consumer tastes moved, so did we
• From Concentrate to NFC
• From canning and bottling to bulk sales

25
Keeping the Balance

• Capacity necessary to handle volume in large crop
  years
• vs.
• Covering cost of same capacity in small crop years

26
2007 Freeze

• Lemon Extraction equipment installed at Tipton
  plant

• Lemon shortage / optimum time to consolidate

• Freeze

• Lemon lines up and running

• Study and decision by Board

27
Tipton

• Consolidated plant
• 15 increase in processing capacity
• Economies of scale
• Lower overhead per ton
• Peel byproduct closer to Dairy customers

28
Sunkist Citrus Juice Oil