(Feb. 20) VENTURA, Calif. — With one of the most recognized brand names in the supermarket, Sunkist Growers Inc. has the potential for a bright future, said Jeff Gargiulo, president and chief executive officer. But there must be change if the company is to fully realize that potential.

Speaking to an estimated 700 growers and guests at the co-op’s 110th annual meeting Feb. 18, Gargiulo said the company, based in Sherman Oaks, must excel in areas such as food safety, quality control and customer service if it is to continue to move forward.

He made his remarks at a time when he admitted many growers are coming off a bad year.

Ventura County lemon growers saw poor returns on their crops in 2003 as did some navel orange growers. The valencia deal improved slightly from 2002, he said, but continued its decline. He said the end of that drop may be near.

Grapefruit was one of the year’s few bright spots thanks to an early exit from the deal on the part of Florida and Texas growers and as a result of a decline in acreage.

Gargiulo attributed the poor showing to supply and demand being out of balance and expressed hope that the newly formed California Citrus Growers Association might help market the orange crops in a more orderly fashion this year.

Looking to the future, Gargiulo said the increasing popularity of the foodservice sector is “one of our biggest threats.”

Food expenditures going to foodservice operations will increase from 44% in 1995 to 53% in 2005 and 58% by 2010, he said.

On the bright side, research has shown that 51% of consumers think of Sunkist when they think of citrus, he said. This means, “We’ve got major opportunities.”

Sunkist already has implemented some changes to maintain its position in the marketplace and meet customer needs. Specifically, Gargiulo pointed out that the company now sources from overseas markets to fill gaps when domestic product is not available.

Some growers may complain, he said, “But if we fall short, someone else is going to do it.”

And he pointed that Sunkist was on the verge of selling strawberries for the first time thanks to a deal announced last fall with Coastal Berry Co. LLC, Watsonville.

To help facilitate additional changes, he said, a task force is looking at making major improvements to the co-op’s information technology capabilities.

Long-term, he called China potentially a huge threat, and said citrus acreage in that country reached 900,000 in 2002. Even if Chinese growers don’t sell a single orange in the U.S., he said, it could damage the industry by cutting into U.S. business in the Pacific Rim.

Making the changes needed to move forward is a shared responsibility that requires the combined efforts of growers, the board of directors and management, Gargiulo said.

Grower Al Williams, president of Visalia Citrus Packing Group, Visalia, who soon will step down after four years as Sunkist’s chairman of the board, told growers that Sunkist is changing with the marketplace.

He said emphasis needs to be placed on producing and marketing more first-grade, quality fruit because choice and standard grade product may no longer bring in enough of a return with today’s competition.

He encouraged growers to work to satisfy customers by not shipping marginal fruit, by implementing new technology, by not allowing supply to exceed demand, by providing appropriate political input and by simply working smarter.