Beaten to a Pulp

Ironbeer entrepreneur Pedro Blanco thought he had a fruitful contract to can Tropicana juice. Now all he's got is a bankrupt business.

Pedro Blanco can relate to Anthony T. Rossi, the founder of the Tropicana orange juice company. Rossi immigrated to Florida from Italy, penniless, with a burning desire to succeed in business. Through hard work, his original fruit packing and gift box company grew into the world's largest producer of fresh orange juice. When Rossi died in 1993, Tropicana's sales topped a billion dollars per year.

Blanco, age 59, claims his own American success story. The former Cuban cattle rancher fled to Miami in 1961 after Fidel Castro seized his property. He spoke no English and had only $47 in his pocket. Desperate for work, he began driving a truck for the Ironbeer Soda Co., makers of the sweet citrus cream soda popular in Cuba since 1915 and produced exclusively in Miami after Castro took power. Within five years Blanco rose to general manager. Two years later he bought the Ironbeer company outright.

For 30 years, Ironbeer has held steady as a favorite, if regional, soft drink. Sedano's, Winn-Dixie, and Publix supermarkets stock the distinctive red-and-yellow Ironbeer cans alongside Materva, Jupina, and other sodas favored by the Hispanic community. Revenues leveled at close to $3.5 million per year. It was a comfortable family business for Blanco -- his wife Myra kept the books, while his two sons, Carlos and Pedro Jr., handled sales and internal operations.

But like Rossi at Tropicana, Blanco wanted to expand his business. He had always contracted the canning of his sodas to private companies, but in the early 1990s he decided to build his own plant next to his northwest Miami warehouse. With two partners, he founded the Sunshine Bottling Co. and invested in monstrous bottling and canning machines. To further increase his profits, he decided to brew and sell his own version of the Cuban soft drink known as malta. Blanco hammered out contracts with the supermarkets to sell his syrupy barley beverage under the stores' private labels.

The canning factory was less than two months from startup when Blanco crossed paths with Tropicana, the company that flourished under Rossi's guidance. The result, for Blanco, was disastrous.

Tropicana wanted Blanco to be its only juice canner for the entire East Coast, a dream opportunity for a small business. Yet, soon after the contracts were signed, Tropicana dropped out of the deal because of an extremely technical (and, Blanco insists, specious) detail. Before Tropicana reneged, though, Blanco incurred debts so severe that Sunshine Bottling Co. eventually declared bankruptcy. While the company remains open for business, struggling to regain its financial footing, Blanco heads to Dade County Circuit Court next week to accuse Tropicana of breach of contract and to seek $4.5 million in damages.

"Tropicana, that is one of the more important companies in the whole U.S.," Blanco relays in his still-uncomfortable English. "They came to me as I was mounting a juice plant. They said we want you to pack for us orange juice. Fine, good, I said. We are a family business. We feel really very proud of Tropicana coming to us.

"In reality," he continues, "they push us against the wall and one day, at a turning point, I sit down at home and gathered my family together. I said I think we have a pretty bad hit. We probably need to look for other jobs."

Blanco wrings his thick hands. He is seated at a conference table in his office overlooking the bottling plant. A map of Cuba and an old-time bottle of Ironbeer are displayed on a wall behind him. "It is a shame that a family business that has made money every year for three decades can go down because a giant wants to scratch its head."

Since 1988 Tropicana has been owned by Seagrams Inc., a mammoth entertainment and liquor conglomerate based in Montreal. Seagrams is so big and so diverse -- producing liquors, movies like Jurassic Park, CDs by Beck, and operating the Universal Studios theme parks -- that Tropicana's huge returns compose only a quarter of Seagrams's six billion dollars in annual revenues.

Tropicana has prospered under Seagrams' stewardship. Whereas the company used to sell one primary product, 64-ounce cartons of not-from-concentrate orange juice, Tropicana now cranks out several different varieties of juice, including Season's Best apple juice and Tropicana Twisters strawberry-banana beverage.

These new products created a need for new packaging facilities. Although all of Tropicana's orange juice cartons are filled at the company's main headquarters in Bradenton, there's no machinery at the plant capable of putting the new juice products into cans. The search went out for subcontractors. "Your company has been brought to our attention as a high-quality packaging facility by others in the industry, and we hope you will be interested in exploring the possible copacking needs we have with us," wrote Tropicana senior buyer Pat Boling in a November 1993 letter to Sunshine Bottling.

"Interested" is an understatement. Blanco was ecstatic at the opportunity to work with such a major player in the juice industry. As a demonstration of his commitment to a Tropicana partnership, he put aside his plans to brew malta. "Pat Boling said we need you to put us in the front of the bus," Blanco recalls. "We want you to put all of your research in the back of the bus. Put all your money into the new plant for Tropicana. I got together with my family and made a business decision: Let's bring those big guys with us. We'll be very happy."

Boling and company signed a two-year contract with Sunshine in March 1994. For the next two years, the contract stipulated, Sunshine would crank out 8000 cases of Twisters and other juices every production day -- two million cases each year.

Tropicana engineers and executives descended on Sunshine's plant, ordering changes in the assembly line. When someone requested that a brick wall be knocked down, Blanco says he happily complied. In all, Blanco claims he spent more than $400,000 to adapt the factory to Tropicana specifications. "They said put us in the front of the bus. Put everything else on hold," Blanco asserts. "So we did."

In June 1994, Boling sent Sunshine a million-dollar purchase order for cases of juice, plus the glue and stretch wrap needed to hold the filled cases together.

One month later, though, a problem arose that killed the whole deal. Every canned drink sold contains a small amount of air. The contract Sunshine signed with Tropicana stipulated that cans may contain no more than two percent air, a total Sunshine could live with. Yet in July 1994, according to the lawsuit, months after the contract had been signed, Tropicana demanded that the cans contain no more than one percent air, a figure that Blanco insists is unreasonable.

And that was that. Tropicana refused to continue with the contract or the million-dollar purchase order. Blanco filed his lawsuit against Tropicana in August 1994.

"We believe [the dispute over the air] was a ruse to end the relationship," attests Ted Bartelstone, a lawyer representing Sunshine. "Seagrams around this time was in the process of negotiating to buy Dole juices for $280 million, including Dole's Juice Bowl processing plant in Lakeland. They ultimately completed the purchase [in January 1995]. One of the things we suspect, frankly, is that they didn't believe they needed Sunshine any more."

Tropicana declined to talk to New Times about the specifics of the lawsuit. "We have a policy of not commenting on pending litigation," insists Samuel Danon, an attorney for Holland & Knight, the Miami law firm hired by Tropicana. The juice company's position, according to Bartelstone, is that it wasn't obligated to purchase anything from Sunshine.

The case, which is expected to last between one and two weeks, is scheduled to go to trial March 17. Blanco seeks $2.5 million in lost profits from the Tropicana contract and another $2 million in lost sales from the malta and other products he couldn't manufacture because of his Tropicana investment.

"If we win the lawsuit, then my pain is over today," Blanco explains. "I feel very good because I believe deeply in the U.S. system of justice. I came from a country that has no law. But even if we get zero in court, I'll still fight. Then it's working fourteen-hour days seven days a week for a few more months, but we'll get through this."

At the Sunshine plant two weeks ago, hot water was piped into a vat of cracked barley. The cooked concoction bubbled into a holding tank, where it sat a day before being poured into seven-ounce brown bottles, which were subsequently pasteurized in a giant oven. Three years after first being introduced to Tropicana, Blanco is finally making his malta. "The malta will be our Lazarus," he cries. "It will help us walk again."

The Tropicana orange juice company (now known as Tropicana Dole Beverages) recently celebrated its 50th anniversary. Approximately 6000 celebrants sampled a 300-pound banana and chocolate swirl cake shaped like an orange and impaled with the signature Tropicana striped straw. Bradenton politicians shared a podium with grade school students and Sanna Rossi, Anthony's widow. The former missionary eulogized her husband's dedication to business and devotion to God as the juice-soused crowd cheered. Later, Grammy winner Juice Newton sang her old standard "Angel of the Morning."

"I saw that and I got so mad," Blanco spits, staring at a short article he clipped from the Miami Herald business section. "If you look at this it looks like we all need to say thank you very much to Tropicana for producing juice. Believe me, our nightmare was, is, and will be Tropicana, because it never even crossed our mind that we will be in Chapter 11, a company that has a history of making money.

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