Sunkist Case_Boland.doc

Sunkist Growers, Inc.: Refreshing the Brand It was another nice day in southern California. Tim Lindgren, President and CEO of Sunkist Growers, Inc., liked to be at his desk early in the morning. Those who lived outside California often asked about the traffic and smog but Tim, like other native Californians were quick to say, “What traffic problem?” Nonetheless, being in early before the headquarters office filled with people and traffic really got bad allowed him some quiet time to think. Tim had been hired by the board of directors just over a year earlier in October 2006. Prior to that, Tim had served for nearly 30 years as the president of Fruit Growers Supply Company, (a cooperative formed ion 1097 as Sunkist’s manufacturing and supply affiliate) until his retirement in 2003. One of the strategic initiatives that Tim undertook was taking a hard look at the future of Sunkist. While its financial performance was good, its status as the world’s largest citrus cooperative and a successful branded food and beverage licensor was something Tim knew Sunkist could not take for granted. The strategic initiative asked each senior manager to look at all aspects of the business to find ways to reduce costs and increase returns to Sunkist’s members who were citrus growers in Arizona and California. The main goal was to reexamine Sunkist’s competitiveness in an increasingly global economy with fewer retail buyers. A global economy meant that international trade policies and regulatory policies helped determine the overall competitiveness of Sunkist. Competitors in countries such as Brazil, China, Mexico and Spain had increased their competitiveness in the United States (US) domestic market in recent years. Regulatory policies with regard to agricultural chemicals, pesticides, and fungicides coupled with increased labor costs due to uncertainty over immigration issues had increased the costs of citrus growers. And, consumer tastes and preferences continue to change, which