A History of the Indian River Citrus Company
Indian River Citrus Company (A)
Indian River Citrus Company is a leading producer of fresh, frozen, and made-from-concentrate citrus drinks. The firm was founded in 1929 by Matthew Stewart, a navy veteran who settled in Miami after World War I and began selling real estate. Since real estate sales were booming, Stewart’s fortunes soared. His investment philosophy, which he proudly displayed behind his desk, was “Buy land. They aren’t making any more of it.” He practiced what he preached, but instead of investing in residential property, which he knew was grossly overvalued, he invested most of his sales commissions in citrus land located in Florida’s Indian River County. Originally, Stewart sold his oranges, lemons, and grapefruit to wholesalers for distribution to grocery stores. However, in 1965, when frozen juice sales were causing the industry to boom, he joined with several other growers to form Indian River Citrus Company, which processed its own juices. Today, its Indian River Citrus, Florida Sun, and Citrus Gold brands are sold throughout the United States. Indian River’s management is currently evaluating a new product-lite orange juice. Studies done by the firm’s marketing department indicate that many people who like the taste of orange juice will not drink it because of its high calorie count. The new product would cost more, but it would offer consumers something that no other competing orange juice product offers-35 percent less calories. Lili Romero and Brent Gibbs, recent business school graduates who are now working at the firm as financial analysts, must analyze this project, along with two other potential investments, and then present their findings to the company’s executive committee. Production facilities for the lite orange juice product would be set up in an unused section of Indian River’s main plant. Relatively inexpensive, used machinery with an estimated cost of only $500,00 would be purchased, but shipping costs to move the
Indian River Citrus Company is a leading producer of fresh, frozen, and made-from-concentrate citrus drinks. The firm was founded in 1929 by Matthew Stewart, a navy veteran who settled in Miami after World War I and began selling real estate. Since real estate sales were booming, Stewart’s fortunes soared. His investment philosophy, which he proudly displayed behind his desk, was “Buy land. They aren’t making any more of it.” He practiced what he preached, but instead of investing in residential property, which he knew was grossly overvalued, he invested most of his sales commissions in citrus land located in Florida’s Indian River County. Originally, Stewart sold his oranges, lemons, and grapefruit to wholesalers for distribution to grocery stores. However, in 1965, when frozen juice sales were causing the industry to boom, he joined with several other growers to form Indian River Citrus Company, which processed its own juices. Today, its Indian River Citrus, Florida Sun, and Citrus Gold brands are sold throughout the United States. Indian River’s management is currently evaluating a new product-lite orange juice. Studies done by the firm’s marketing department indicate that many people who like the taste of orange juice will not drink it because of its high calorie count. The new product would cost more, but it would offer consumers something that no other competing orange juice product offers-35 percent less calories. Lili Romero and Brent Gibbs, recent business school graduates who are now working at the firm as financial analysts, must analyze this project, along with two other potential investments, and then present their findings to the company’s executive committee. Production facilities for the lite orange juice product would be set up in an unused section of Indian River’s main plant. Relatively inexpensive, used machinery with an estimated cost of only $500,00 would be purchased, but shipping costs to move the