AUBURNDALE, Fla. (AP) — The Coca-Cola Company (NYSE:KO) says it is spending $2 billion to support the planting of 25,000 acres of new orange groves in Florida, a move officials are lauding as a major investment in the Sunshine State’s citrus industry.
The announcement is being made at a late-morning news conference at The Coca-Cola Company (NYSE:KO)’s juice production plant in Auburndale. Details were released in advance to The Associated Press.
The Coca-Cola Company (NYSE:KO) owns the Minute Maid and Simply juice brands.
“It’s an investment in a market that’s very important to us,” said Steve Cahillane, the president of The Coca-Cola Company (NYSE:KO) Americas.
Some 5 million new trees will be planted in the new groves, believed to be the largest citrus addition in the state for at least 15 years. The groves will be located in Polk, DeSoto, and Hendry counties in central Florida.
Company officials say the new groves and resulting juice production are expected to add about 4,100 jobs to Florida’s economy.
The move also is seen as a boost to historically declining acreage devoted to citrus production in Florida. During the state’s past housing boom, many citrus farmers sold their land to developers. Since 1997, total citrus acreage has fallen by 25 percent, from 600,000 acres to 450,000 acres, because of the disease, pests and other pressures, according to Florida Citrus Mutual.
The Coca-Cola Company (NYSE:KO) officials said that the Florida Citrus Commission is working on an economic study centered on the company’s investment, and that a preliminary draft shows that over the course of 25 years the expansion will add more than $10.5 billion — or $422 million per year — to Florida’s economy. Company officials said Coca-Cola buys a third of all Florida oranges.
The Coca-Cola Company (NYSE:KO) reported its first-quarter results in mid-April; they topped Wall Street expectations as sales volume rose in emerging markets. Shares of Coca-Cola rose nearly 6 percent to $42.37 and touched their highest point since the late 1990s.
Cahillane said that the company also purchases juice from Brazil, Florida’s biggest competitor in the juice industry. He said that different harvest times in each location allow the company to give customers “consistent, great tasting juice.” About 90 percent of Florida’s oranges are used for juice; by contrast, the majority of California’s orange crop is sold as fresh fruit. Florida is second in the world for orange juice production, behind Brazil.
Under the program, two Florida growers will each plant 12,500 acres.