First eggs and now orange juice: This is the reason why Tropicana might be raising the prices of its OJ

Consumers could soon be paying more for another breakfast classic: orange juice.

With egg prices hitting record highs, as supply remains limited by the Bird flu epidemic impacting hen houses across the country, orange growers and juice producers are raising concerns about the security of their supply chains.

Tropicana, one of the most popular beverage brands in the U.S., has seen declining revenue, and investors are concerned that climate conditions and market forces may require prices to be increased. CNN reported that earlier this month, one of Tropicana’s top suppliers, Alico, has "ended its citrus-growing operations."

Climate change threatens “economic viability” of citrus production in Florida

When making the announcement, Alico’s executive team pointed to climate change, which among other factors, has reduced the company’s production by 73 percent over the last decade. Though they believed that the investments in “land, trees, and citrus disease treatments” would be able to turn the production trend around, the leaders expect “the current harvest will likely be lower in volume than the previous season."

The impact of Hurricanes Irma in 2017, Ian in 2022 and Milton in 2024 on our trees, already weakened from years of citrus greening disease, has led Alico to conclude that growing citrus is no longer economically viable for us in Florida

John Kiernan, Alico’s President and Chief Executive Officer.

The impact of shrinking supply on consumer prices

Just as is being seen in the egg market, limited supply could force companies, like Tropicana, which is owned by Pepsi Co., to increase prices. The company will need to look to find new sources to fill the gap left by Alico and may have to pay more in a contracted market.

Earlier this month, in PepsiCo’s quarterly earnings report, the company’s North American branch, reported a decrease in operating profits of 127 percent, of which Tropicana Brands group was thought to be the primary driver. “A decline in organic volume,” was cited as a factor that had contributed to the decrease in profits, as well as “higher advertising and marketing expenses.”

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