The story of Sunkist Growers is one of agriculture's greatest success stories of the 20th century. Built by California growers facing financial ruin more than a century ago, this grower-owned organization has not only become a billion dollar industry but has created a name that is now synonymous with the word "citrus."

The seeds of Sunkist Growers were first planted back in the 1840's, with the beginning of the California "Gold Rush." Many of the thousands of fortune seekers developed scurvy. As word spread that citrus fruits could prevent the disease, demand skyrocketed and soon lemons were selling for as much as $1 each.

But the growth of the citrus industry got its first real start in the 1870's with the completion of the transcontinental railroad and introduction of the navel orange, which adapted well to California's mild winter climate. Meanwhile, growers were also discovering that Valencias, the "summer orange," thrived in Orange County, while high-quality lemons could be produced in the areas now known as Ventura, San Diego and Santa Barbara counties.

Aided by the railroad, the citrus fruit industry created an increasingly significant economic base for California, and for years the fruit was one of the state's few export products. From 1880 to 1893, California's citrus acreage grew from 3,000 to more than 40,000 acres, and it appeared that citrus growers had uncovered a gold mine of their own.

In reality, however, growers were financially hampered from the beginning by weak distribution methods. Agents were shipping fruit to markets with no knowledge of whether a demand existed or what their competitors were doing. Consequently, some markets were glutted with fruit while others received nothing. In addition, farmers were at the mercy of local buyers, who would drive the prices down, knowing that farmers would have to ship their fruit east if they could not sell it locally.

By 1891, agents insisted on handling citrus on consignment, which meant that payment was made only if there was a sale. That shifted the risk from distributor to grower, who now bore full financial responsibility for the fruit.

This situation led to a series of seasons known as the 'red ink' years, where growers' sales often netted less than their expenses. Facing financial ruin, growers throughout Southern California banded together to market the fruit themselves in the East.

Two of the most successful of these associations were the Claremont Fruit Growers Association, led by president P.J. Dreher in the upper Pomona Valley, and the Pachappa Orange Growers Association in Riverside, headed by grower T.H.B. Chamblin.

A Seed Takes Root

On April 4, 1893, a group of about 100 prominent orange growers, including Dreher and Chamblin, met in Los Angeles to discuss Chamblin's plan to unite local associations into one general cooperative, organized by and for the growers. The plan was greeted with enthusiasm and, only a few months later, on Aug. 29, 1893, the Southern California Fruit Exchange, now known as Sunkist Growers, was born.

The Exchange was set up as a federated structure and based on a system of cooperative marketing. Eight exchange districts were formed and local associations organized within each district. Each association did its own packing and established a local brand with individual or company names attached. Fruit packing was pro-rated among grower-members to give all an equal chance of delivery, and orders were pro-rated among the associations to keep the fruit moving proportionately.

One of the first issues tackled by the Exchange was quality control, and both growers and their packing houses were required to meet the highest grading standards for their fruit.

The Exchange was an initial success. During its first season, when it represented approximately 60 Southern California orange growers, the Exchange shipped 6 million cartons of the state's 7 million total cartons and obtained an average net price of about $1 per box -- an estimated 75 cents more than the growers would have received if they had sold it on their own.

During the next few years, however, the Exchange encountered problems due in part to the conflict and confusion which resulted from each exchange making its own sales. To strengthen the sales program, the Exchange was incorporated on Oct. 3, 1895, and the new corporation was able to establish cooperative marketing of citrus fruit on a more secure basis.

By 1905, citrus growers in the San Joaquin Valley area in northern California had also joined the Exchange, and on March 27, 1905, it was renamed the California Fruit Growers Exchange to reflect its broadened membership of 5,000 grower-members. At that time, the association represented 45 percent of California's citrus industry and shipped more than 14 million cartons.

The next year, the Exchange branched out even further. Frustrated by their inability to obtain wood for packing crates following the devastating San Francisco earthquake in 1906, the Exchange created its own timber supply company, called the Fruit Growers Supply Company.

The Supply Company also made loans to mills and when one of these loans defaulted in 1910, the company took possession of 24,000 acres of forest, as well as a logging railroad, several sawmills and a box factory. Today, Sunkist owns 360,000 acres of forests in California as a result of this venture.

Creating an Identity

In 1907, the Exchange approved a major advertising campaign, the first time a perishable food product was ever advertised. The campaign, which cost $7,000, was launched in Iowa in 1908 and was so successful that orange sales actually increased by 50 percent.

Convinced that advertising worked, the Exchange increased its ad budget to $25,000. The ad agency, Lord & Thomas, coined the name "Sunkist" in their ads. In April 1908, the board adopted the word "Sunkist" as its trademark for their highest quality oranges, and in fall 1908, six million "Sunkist Orange" stickers and one million "Sunkist Lemon" stickers were pasted on the regular labels of exchange shippers.

In February 1952, the California Fruit Growers Exchange officially changed its name to Sunkist Growers, Inc., to associate the brand name with the corporate organization that had made it so famous.