Retail and food services have had a difficult start to 2025 as sales declined by 0.9% in January after four-straight monthly gains, though retail sales excluding vehicles and auto parts fell by 0.4%, according to KPMG data.
The economic distress caused by rising inflation, increased interest rates, and changing consumer attitudes toward spending have led several retail and restaurant establishments to launch out-of-court restructurings, file for bankruptcy, and close business locations.
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Makers of retail products have also suffered from the fallout of reduced sales, including several food and beverage brands that have filed for Chapter 11 bankruptcy.
Related: Distressed iconic food brand files for Chapter 11 bankruptcy
Most recently, popular Los Angeles sourdough bakery Frisco Baking Company filed for Chapter 11 bankruptcy on Feb. 25 to reorganize its business and continue operating. The company, which was established in 1941, did not specify a reason for filing its petition.
However, Frisco listed in its petition a disputed claim of $7 million debt owed to the Bakery and Confectionery Union and Industry International Pension Fund. It also owes the Internal Revenue Service $970,000 and trade creditors Capitol Food Co. over $380,000 and Maisano’s Wholesale Bakery over $329,000.
Beverage brands file for bankruptcy
Several beverage brands that consumers can find at their local grocery stores have also filed for Chapter 11 bankruptcy over the last year.
Texas-based craft brewery Alamo Beer, which is distributed to stores throughout Texas, on Feb. 3 filed for Chapter 11 bankruptcy to restructure its debt and reorganize its business, blaming rising operational costs and declining sales for its distress.
Vintage Wine Estates, which owned about 60 wine labels, such as Girard Winery, B.R. Cohn, Kunde, and Windsor Vineyards that could be found at grocery stores, Total Wine & More, and Costco, on July 24, 2024, filed for Chapter 11 bankruptcy. The debtor auctioned off all of its wineries in September 2024.
Tropicana Brands Group, the maker of Tropicana orange juice, is facing a financial crisis due to shifting consumer trends and higher prices that could result in a bankruptcy filing. (Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images
Tropicana Brands at risk of bankruptcy filingÂ
And now, orange juice maker and distributor Tropicana Brands Group is facing financial difficulties, including liquidity issues, and might be a candidate for a bankruptcy filing, CNN reported.
Related: Struggling healthcare firm files for Chapter 11 bankruptcy
Tropicana’s total revenue dropped by 4% in its last quarter, and income dropped 10%, according to the report.
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The company’s leading shareholder PAI Partners recently funded a $30 million emergency loan for Tropicana, and in December, a group of the company’s first-lien lenders hired law firm Gibson Dunn to advise them on financial forecasts.Â
The causes of the distress stem from a series of devastating events that have crushed the orange juice industry. Florida citrus crops have been infected by a disease called citrus greening since 2005, which has reduced production by about 75% in the last 10 years, Chowhound reported.
The disease results in the fruit tasting bitter and oranges being discolored and unattractive. The terrible taste of the juice led Chowhound in July 2024 to rate Tropicana as one of the six worst orange juice brands on the market.
Two hurricanes in 2024, Beryl and Helene, damaged citrus crops, contributing to the distress. Consumer demand for orange juice has also declined with Americans reportedly drinking less O.J. than anytime since 1970.
Consumers have turned to other drinks like prebiotic sodas, energy drinks, sparkling water, and teas that have impacted orange juice sales.
The market is so bad that some orange farms have gone out of business.
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