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Vitality chairman touts future of juice business

Bob Peiser, chairman of Vitality Beverages Inc., says the company's focus is on private-label juice packaging.

By CHASE SQUIRES

© St. Petersburg Times, published June 13, 2000


DADE CITY -- The sweet aroma of freshly squeezed oranges has wafted over Dade City for the last time.

But the future of the former Lykes Pasco juice plant seems promising as the new owners expand into the high-profit arena of private label juice packaging, the company's chief executive said Monday.

Bob Peiser, chairman of Tampa-based Vitality Beverages Inc., made his first public appearance in Dade City before about 85 people at a joint meeting of the Rotary and Kiwanis clubs to discuss the future of the local plant and his rapidly expanding company.

Peiser said Vitality is moving aggressively in the private label and industrial juice market,and it isexpanding through acquisitions in Canada and Europe. The future of Dade City's plant, with about 600 employees, depends on the success of the company's plans, but it appears secure under a new mission, he said.

Dallas-based investors bought much of the Lykes business last year, including the trucking arm and the Vitality Food Service industrial juice supplier in Zephyrhills.

The new owners renamed the Lykes Pasco juice plant "Pasco Beverage" and went on to buy processing plants in Polk County, New Jersey, Illinois and California It also bought two Canadian food service companies and a Dutch juice company. The entire operation has been brought under the Vitality Beverages name.

Peiser said that while Lykes Pasco was part of a closely held private company, Vitality leaders are considering a public stock offering, although a target date or even a final decision to go public are still in the future.

The private-label juice-arm packages condensed and reconstituted juice for retail outlets under store brand names, including Wal-Mart, Winn-Dixie, Albertson's, and A&P, with Pasco Beverage controlling about 60 percent of the North American market, Peiser said. Consumers buying the house brands are actually buying juice packed in Dade City, without ever knowing it, he said.

"Corporate brands are becoming very, very important," Peiser said. "We're catching a wave at a very important time."

Peiser said when he took over he found a company in bad shape. A failed bid in the premium juice category pitted Lykes against giants Tropicana and Minute Maid and proved costly for the company. The organization had gaps in management and too many employees, and the Dade City plant was running at 40 percent capacity, he said.

"We have spent a large part of the last 11 months fixing what was, for the large part, a pretty broken company," he said.

Vitality moved juice squeezing operations to Polk County, closer to the major citrus growing centers. The juicing operation at the Dade City plant closed, and the equipment inside is for sale, Peiser said.

The plant is finished processing fresh fruit, he said.

But the profitable juice packaging operation at the plant is running well and will grow. Vitality is building arrangements not only with its Canadian divisions but also with the Ocean Spray label, and the company continues to look at new products such as mixed juices and better ways of marketing existing lines.

The company is moving away from squeezing oranges and toward higher profit areas of marketing, packaging and distributing, Peiser said. The company is expanding its efforts in coffee, iced tea and hot chocolate distribution.

"Think non-carbonated, think wet, think non-alcoholic," Peiser said.

But while Peiser said he is fascinated at seeing people pay up to $3.50 for a bottle of water, Vitality isn't expected to venture into that competitive market, he said.

The company is also steering away from fresh fruit shipping, he said. And despite new trade agreements with China, Peiser said he does not envision pushing his company into the expensive proposition of fighting for such a large, untested market.

The future, Peiser said, is in restaurant supply, expanded juice offerings under private labels at the supermarket and in supplying industrial users such as hospitals.

Mayor Scott Black, who held a job at the old Lykes plant as a teenager, said Monday he was encouraged by what he heard, both on the business end and in Peiser's promise to be more open and involved in the community.

"We'll keep meeting with them in the coming months," he said. "We want to know what we can do as a community to help them."

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