Happy New Year!

A Letter From Al

Looking forward, what can we expect this year and possibly the next two to three years to look like? This is what really matters because our future is the only thing we can affect and it is what will determine our success. We have accomplished a tremendous amount. It has been a journey with some ups and some downs, but through it all we have stuck together and our TEAM and our business has become stronger than ever.

How can we know what the future holds for us? No one can ever know for sure, but learning from our past experiences and not repeating our mistakes can minimize risk and help optimize our chances for success. However, more importantly, looking outside our own experiences, trying to understand better the environment we will be competing in tomorrow, and changing our strategies and tactics to compete successfully in that environment is probably what is MOST important. It is fact that the consumer and the food industry have changed and will continue to change, and we MUST CHANGE to succeed.

Good News! We have been working very hard to better take advantage of the opportunities we believe will exist in the future (2018, 2019 and 2020) and are in a very good position to continue to grow rapidly. We believe the environment we will be competing in will look like this:

Global Drivers
  • Consumers will continue to seek more good, healthy and convenient foods.
  • Government will continue to increase regulations on labeling.
  • Consumers will continue to take advantage of more e-commerce shopping alternatives.
  • Consumers will continue to have increased concerns about environmental issues (global warming and waste).
  • Consumers will continue to seek more, low price/value alternatives.
  • Consumers will continue to be assaulted with more and more messaging (noise).
  • Hispanic consumers will continue to grow in the U.S.
  • Consumers’ confidence in their economic wellbeing will remain about the same.

Food Industry Drivers
  • Brick and mortar stores will continue trying many approaches to re-engineer themselves to compete better with e-commerce, causing changes in store size, shelf sets, product offerings, pricing, distribution, packaging and marketing for manufacturers.
  • Supermarkets will continue their consolidation.
  • Mass merchandisers will continue to try and reinvent themselves changing their offerings, closing stores, and buying or developing e-commerce businesses. Price/value will become even more important.
  • Club stores will work much harder to keep their memberships and expand their e-commerce presence. They too will be closing stores.
  • Walmart will again re-engineer itself, possibly reducing its’ number of stores and store sizes, limiting product offerings and concentrating more on e-commerce. Plus, price/value will be stressed much more.
  • Drug/Health Food stores will re-engineer themselves many times to better compete/take advantage of e-commerce. Store growth will slow drastically.
  • Private label across all channels/categories will become more and more of an emphasis for the trade.
  • The cost of doing business with brick and mortar stores will continue to increase for all manufacturers across all categories, with the cost for smaller companies/brands disproportionately increasing more as stores look to fund their efforts to change and better compete with their perceived threat of e-commerce..
  • Brands must stand out to survive. They must continually refresh their product offerings, image and messaging to remain “New News” to the consumer and relevant in the consumers’ changing consideration set.


Consumers are being assaulted 24/7 with messaging across numerous media channels like never before and this may even get worse as artificial intelligence devices improve.

A consumer must become aware of a product and understand the benefits of that product and be stimulated to buy the product before a purchase can happen. Understanding who, what, where and how to communicate to your targeted consumers at a point in time will become more and more important. Therefore, consumer analytics and data driven media decisions will become more and more important.

However, I believe great creative, continually refreshed with consistent, relevant messaging is paramount for success.

True Citrus’ Situation

What is it we have learned and what is different about True Citrus that makes us so confident we are ready to grow even faster?

The True Citrus Business Platform

  1. True Citrus Consumer/Potential Consumer
    · Health concerned and likely a label reader.
    · More educated and likely e-commerce savvy.
    · Almost all demographics.
    · Currently ONLY in 3.9% of HH with room for significant growth.
  2. The True Citrus Product Line· All True Citrus products are good for you and taste good.
    · All True Citrus products are convenient.
    · All True Citrus products are a good price/value.
    · All True Citrus products have relevant, appealing product points of difference versus their competitive set.
    · Plus, new, innovative, tested products are ready for launch.
  3. The True Citrus Customers (Channels)
    · Supermarkets – Very strong distribution in PSDs with significant room for varietal growth. Plus, room for significant growth on our sachets and spices.
    · Mass Merchandisers – Strong distribution in Target and Dollar Tree. Family Dollar, Dollar General and others have been presented and are pending acceptance.
    · Walmart – Strong distribution with PSDs and sachets with room for significant varietal growth. No spices.
    · E-commerce – Distribution with Amazon, many online secondary distributors and our own online store. Significant new business potential exists with new pack sizes and products developed specifically for e-commerce.
    · Foodservice – Our new relationship with Diamond Crystal is just starting and it is working very well. Our product has appeal and real benefits for the back of the house and front of the house applications, and with Diamond Crystal’s organizational strength to sell both in combination with their products, real breakthroughs should happen soon.
    · Industrial Ingredients – Our products and our expertise to formulate for specific applications have real benefits and appeal to these customers. Having just re-organized and dedicated sales efforts and R&D time to this channel, the upside from our customer pipeline already presented looks very promising.
    · Club Stores – Not currently represented in this channel, though some of our products have good potential. Innovative new product and packaging formats that we will be coming out with have a very real potential.
    · International – We have good representation in Canada without doing much at all. Marketing and expanding in Canada is a very good opportunity for us. Also, ventures in other countries is a real possibility given the proper resources. Citrus as a part of culinary habits is even stronger in some Latin American and Asian countries than in the U.S.

The Organization

The True Citrus organization overall is lean, experienced, hardworking, dedicated, passionate, loyal individuals that work exceptionally well as a TEAM. Thereby, making the whole TEAM much stronger and capable than the individuals themselves. The TEAM is ready for growth and ready to change as the demands of the challenge necessitate.

  1. Sales – Retail/Mass Merch/Club
    Extremely experienced and connected managers who manage our very competent broker network and who make all key account calls. We do need some stronger analytic and key account help and are in the process of hiring a senior category management person. Also, to help with a more analytic approach, we have just signed a new contract with IRI which gives us much more account data and is more easily accessible than we ever had.
  2. Foodservice
    We have dedicated some time, of three people, to help Diamond Crystal learn and expand our business. We are covered well for growth.
  3. E-commerce
    We have dedicated a senior person and made it a top priority to grow this business in combination with marketing and possibly outside services. We are well covered.
  4. Industrial Ingredients
    We have three senior level people sharing their time, plus a good broker network and the support of our R&D staff concentrating on growing this business.
  5. International
    We have a good broker/distributor network in Canada, but have not supported it well due to other priorities coming first. Also, we have some export customers, but do not have the resources to try and grow this channel right now. We do, however, have good knowhow.
  6. Marketing
    We have excellent knowhow and capabilities and do a great job with our limited resources. The addition of another senior level person is planned for 2018.
  7. Operations
    Our manufacturing, warehousing, distribution and systems platforms have excellent people and capabilities. Challenges during 2017 were significant because of our growth, certain bad co-packer situations and customer demands. We had to change quickly and we have. We are now prepared for the future with the warehousing and distribution services necessary (with the new office/warehouse and using Case Stack for Walmart) to support our planned growth. Plus, with the up-grades we made on our E21 system we will be able to work more efficiently. Also, with the improvements made at our Baltimore manufacturing facility, we can supply both the blend and the sachets needed. Our stick (PSD) packaging capabilities are still being worked on for the long term, but for now, we believe we are covered for our planned growth for 2018, plus more if needed.
  8. R&D/Quality Assurance
    This team has consistently out-performed with great innovation and quality assurance. Now,with the addition of two new experienced people, we are ready for even more growth.
  9. Finance
    The finance team is strong. And now, with the addition of our new C.O.O., Bob, who is very strong in finance, we are ready for growth.
  10.  Management
    The team continues to develop and grow in their competencies. The addition of our new C.O.O., Bob, will help accelerate the team’s growth.

What Happens Next?

Never have I been more confident we are on the right path to significantly more growth and success. We have adjusted to the environment we expect to be doing business in, and will continue to adjust. The foundation of our business in all channels we have established is strong and growing. The learnings we have had with consumers, customers, vendors, co-packers and others, we have analyzed and reacted to, to make ourselves better.

Plus, we have great potential with the innovative, new products we are poised to launch and expand. In addition, we have again proved our brand/business responds well to marketing. Recently obtained IRI panel data indicates clearly, with the little marketing we did during 2017, that we brought new users to the category and also increased our household penetration. With more marketing planned for 2018 and beyond, significant upside exists.

Plus, our ownership’s continued trust and commitment to help us, and guide us, has worked and we know they will be there for us, working together with us in the future. 2018 will not be an easy year. More change by us is needed, and more investment is required. The PSD category is shrinking in space allocation and importance to our trade customers and possibly consumers. The category is under supported by the major Brands and has lacked innovation. Plus, consumers have more choices than ever with ready to drink beverages that are healthier than ever. Therefore, though we are achieving excellent growth and there is a lot more to be had, we are getting a greater share of a shrinking category, which is more costly.

So what do we do? We keep getting better and more efficient at what we do, in everything we do. Plus, we look for opportunities to get out of that shrinking PSD category space with new product innovation, new package innovation and new channel growth. We think we are ready with all of these things. Our new products have tremendous opportunity outside the PSD category space. Plus, our growth in e-commerce, drug, dollar stores, foodservice, mass merchandisers and industrial ingredients have demonstrated great potential for us. In summary, True Citrus is ready for more growth and has the people, plans and ownership to deliver it.

What is next? Is for us to make it happen! Thank you for your continued support and hard work. I am very proud to be a member of the True Citrus TEAM.

Again, looking forward, may the new year bring you good health, good times and good fortune.