In an earlier post, we looked at the geography behind the cultivation of oranges in Mexico. In this follow-up, we report on an example of vertical integration in the citrus industry. Vertical integration occurs when the same firm controls several successive stages of the production of an item. In this case, the same firm that grows the citrus fruit also packages it and ships it to markets and consumers.
Paramount Citrus, based in the USA, but with orchards also in Mexico, is our chosen example of a vertically-integrated citrus-growing and marketing firm. The firm specializes in Persian limes (it is the largest supplier of fresh limes in the USA), but also grows a variety of other citrus fruits, including Clementine mandarins, Navel oranges and Valencia oranges. But Paramount is not only a grower of citrus, it also packs and ships fresh citrus (including some grown by independent growers) to markets all across the USA.
The advantage to Paramount of having citrus-growing properties in Mexico is that it enables the company to supply citrus to the US market year-round. For example, Mexican “lemons should start shipping as early as July, will peak in August and
September and finish up by mid-November,” according to a company representative.
Paramount currently harvests more than 12,000 hectares (30,000 acres) of citrus a year. This figure includes 2,400 hectares (6,000 acres) of lemon groves near Tampico in Tamaulipas, that the company bought in 2008. Paramount is now expanding its operations in Mexico by completing the purchase of an additional 3,800 hectares (9,500 acres) of lime orchards in the Gulf coast state of Tabasco.