In Auburndale, Florida, located an hour south of Disney World, Coke has spent $114 million expanding what it claims is the world’s largest U.S. juice bottling plant.
According to Bloomberg’s Duane Stanford, it’s at this plant that Coke has perfected a top-secret methodology it calls Black Book to make sure consumers have consistent orange juice 12 months a year, even though the peak growing season is only three months.
“We basically built a flight simulator for our juice business,”says Doug Bippert, Coke’s vice president of business acceleration.
Revenue Analytics consultant Bob Cross, architect of Coke’s juice model, describes Black Book as an algorithm.
Orange juice, says Cross, “is definitely one of the most complex applications of business analytics. It requires analyzing up to 1 quintillion decision variables to consistently deliver the optimal blend, despite the whims of Mother Nature”
Besides consumer preferences, the Black Book model includes detailed data about more than 600 flavors that make up an orange.
“Those data are matched to a profile detailing acidity, sweetness, and other attributes of each batch of raw juice. The algorithm then tells Coke how to blend batches to replicate a certain taste and consistency, right down to pulp content.”
The Black Book algorithm also incorporates external factors such as weather patterns, expected crop yields, and cost pressures.
This ensures Coke’s supplies will be available as far ahead as 15 months. “If we have a hurricane or a freeze,”Bippert says, “we can quickly replan the business in 5 or 10 minutes just because we’ve mathematically modeled it”
Instead of frozen orange juice from concentrate, Coca-Cola has concentrated its efforts on fresh juice, doubling global volume sales from 2004 to 2011.
Of Coke’s 15 brands, four are juice-based drinks: Minute Maid globally, Simply Orange in the U.S., Minute Maid Pulpy in Asia, and Del Valle in Latin America.
Coke accounted for 17 percent of the juice-related volume sold in the world’s top 22 markets, compared with 9 percent for PepsiCo, according to Nielsen data for the year ended last September.
Not far from Coke’s Auburndale plant, massive storage tanks owned by Coca-Cola’s Brazilian partner, Cutrale, are full of fresh-squeezed juice, chilled to 30F to 34F.
Together the companies buy almost a third of the 145 million boxes of oranges grown by more than 400 Florida growers.
Cutrale uses satellite imaging to monitor crops in Brazil so they can inform growers the optimal time to pick their fruit dictated by Black Book.
The companies constructed a 1.2-mile underground pipeline from Cutrale’s Orlando-area processing operation to Coke’s packaging plant to transport juice that previously required 70 tanker-truck trips daily.
Inside the tanks, the juice is slowly agitated so it doesn’t settle, while a nitrogen gas blanket at the top keeps out oxygen.
Juice from various crops and seasons are segregated based on orange type, sweetness, and acidity, and in-season juice is mixed with off-season juice.
No part of the orange is wasted.
“Cutrale ships orange pulp to China for use by brands including Minute Maid Pulpy. Essential oils are bottled and sold for everything from flavoring to household cleaners. Peel is pressed into pellets for cattle feed. The raw juice is then flash-pasteurized and piped to storage tanks as large as 2 million gallons each for up to eight months.”
But despite all this high-tech effort to maintain freshness, Alissa Hamilton, author of the 2010 book “Squeezed: What You Don’t Know About Orange Juice,” says most 100 percent not-from-concentrate OJ is more processed than consumers realize.
Hamilton urges stricter labeling so they know the juice has been engineered from various batches of oranges.