TreeSweet Buys Two Juice-Drink Brands

TreeSweet Products Inc., an orange and grapefruit juice manufacturing and marketing company based in Santa Ana, has entered a contract to purchase the Orange Plus and Awake breakfast drink brands from General Foods Corp. for $20 million. The acquisition launches TreeSweet’s bid to become a national food conglomerate.

TreeSweet’s new co-owner and chairman, Clinton E. Owens, said the deal with General Foods, a leveraged buy-out with the assets of the acquired brands used for collateral, is expected to close by April 2. The purchase must be approved by the Federal Trade Commission.

The move, Owens said, is part of a plan to move swiftly to revitalize the 52-year-old firm, which has suffered in recent years from diminishing profits, through more aggressive marketing and the acquisition of new product lines. He said he is scouting first to buy beverage brands and then to move into other food products.

The two products accounted for only a small fraction of General Foods’ annual sales, which are expected to reach $9 billion this year. But to TreeSweet, the $30 million in annual sales generated by Orange Plus and Awake products will boost TreeSweet’s annual revenues significantly. In 1984, TreeSweet’s sales totaled about $100 million, Owens said.

Most important for TreeSweet, Owens said, the addition of the Awake and Orange Plus brands gives the company its first product lines with national distribution.

General Foods spokesman Jack Whiteman confirmed the agreement to sell Orange Plus and Awake. He said they are the only frozen beverages produced by the New York-based food giant, whose other beverage products, such as Tang, Hi-C and Country Time, are sold in powder form.

Sold Under Birdseye Label

Awake and Orange Plus frozen concentrate orange juice substitutes currently are sold nationwide under General Foods’ Birdseye label, while TreeSweet’s frozen and canned juices are marketed in regions representing only about 40% of the national population.

Owens, former senior vice president of marketing at Coca Cola’s foods division, and a silent partner from Houston purchased TreeSweet from San Francisco-based Di Giorgio Corp. in January for $31.3 million. Di Giorgio officials said they decided to sell TreeSweet in part because Di Giorgio lacked the resources to help TreeSweet withstand intensified advertising and marketing competition from orange juice brands with more financial muscle, such as Coca Cola’s Minute Maid and Procter & Gamble’s Citrus Hill.

Owens said his answer is to “diversify beyond grapefruit and orange juice.”

The market for nutritious and economic orange juice blends and substitutes like Awake and Orange Plus, he said, has expanded in recent years as the cost of pure orange juice has risen, pushed up by a series of winter freezes in the Florida citrus belt.

While a 12-ounce can of frozen orange juice with a major brand label currently sells for $1.69 to $1.79, he said, a 12-ounce can of Awake goes for 79 to 89 cents.

Take Over Florida Plant

As part of the proposed acquisition, Owens said, TreeSweet will take over a packing and warehouse facility in Winterhaven, Fla., where Awake and Orange Plus will continue to be produced.

Later, he said, the drinks also may be produced and canned at TreeSweet’s plant in California’s Coachella Valley.