Cranberry Stressline Archives

January, 2001

Growers gather to discuss concerns, Northland Cranberries Annual Meeting; Ocean Spray not for sale; Op-Ed- Goals for the proposed 2001 C.M.C. Marketing Order,  by Russ Lawton with Linda Rinta; Op-Ed - What the "growers' petition" will do for the grower? By Doanne Andresen; Swendrowski, Hiller and Decas speak out on the marketing proposal; Editorial - Looking back: July, 1999: "New Coke shelf stable juice line predicted in Sept. 1998, and how things have changed" and how things have changed, again; Article in Forbes about Ocean Spray entitled "Red Alert" ("What this company needs to enhance shareholder value is a takeover raid—if only there were such a thing in the co-op world."); Ocean Spray Annual meeting coverage; Why the Decas proposal will not work, by Jack Crooks; On the Darlington/Connors ExtraNet posting, by Dean Pappas; Decas dispute with freezer company leads to furor over Ocean Spray ExtraNet posting; Coca-Cola and the noncarbonated beverage market; Pepsi Launches Dole Line of Single-Serve Juices including Cranberry Juice Cocktail and Cranberry Grape; A letter to the Cranberry Community from John Decas; AD Makepeace endorses growers' proxy; Ocean Spray posts sharp net decline; Handlers pledge cooperation, but divided opinions surface
by Betty Brown; Op-Ed -
Baseline Price Guarantee for Growers, by Doanne Andresen; A Difference of Perspective on the CMC, by Linda Rinta; Summary of Merrill Lynch report released by lawyers; Proxy fight in the news; Ocean Spray shareholders challenge company  B.O.D. slate

Growers gather to discuss concerns

1/29/01 Cranberry growers gathered over the weekend in several meetings to discuss ways to survive the cranberry crisis. Article

Northland Cranberries Annual Meeting 

1/30/01 Speech by John Swendrowski at
the Northland Cranberries Annual Meeting

1/30/01 The Milwaukee Journal Sentinel reports on the Northland Annual Meeting: "Northland Cranberries Inc.'s 2000 fiscal year was a "disaster," but the company expects to post a small profit in fiscal 2001 through cost controls and a new marketing plan for its bottled juices, Chairman John Swendrowski said Tuesday." Article

Op-Ed

Goals for the proposed 2001 C.M.C. Marketing Order

 by Russ Lawton
with Linda Rinta

1/26/00 -- New Agriculture Economist Ed Jesse's analysis and tables.

1/25/00 -- I believe that a marketing order for the 2001 crop is needed, or more importantly, demanded by the growing community. We can no longer live, or break even, at these historically low prices; nor can we wait to market our way out of this problem. Growers need to realize that any order the CMC asks the Sec. of Agric. to endorse will be without price guarantees. However, we have models drawn that should show the grower what price levels are attainable at different allotment levels. Ed Jesse, an Agric. Economist and alternate member, drew these models for the marketing committee. CONTINUED

Op-Ed

What the "growers' petition" will do for the grower?

By Doanne Andresen

1/26/00 -- Growers do not have to allow the handlers to sell their fruit below the cost of production. If growers demand a $40 for their fruit, then all of the handlers will sell their fruit at a price that returns $40 dollars to there growers. This includes Ocean Spray. If they raise the price that they sell berries at, other handlers will too. If they raise the price, they and all handlers will be able to pay $40 to their growers. 

This works if we also get rid of the surplus at the same time using the Cranberry Marketing Order Regulations. Both of these objectives must be addressed at the Feb. 5 Meeting. A Cranberry Marketing Order does not help growers if handlers do not choose to raise the minimum price.

CONTINUED

Middleboro
Gazette

Ocean Spray decision gets mixed reaction

1/25/01 Last week, the Middleboro Gazette, the weekly paper that covers Middleboro and Lakeville news, published the Ocean Spray press release without comment.

This week writer Karen Dusek reports on two perspectives in interviews with Ocean Spray's Chris Phillips, and Cranberry Stressline editor Hal Brown. Dusek takes note of Ocean Spray's plans to make the company a "world class contender in the highly competitive business of fresh juices once again."

Brown is far less sanguine about the coop's future because he believes that Pepsi's Tropicana Twister and Coke's Minute Maid will begin to dominate the juice aisle, leaving a poorly capitalized Ocean Spray at a severe competitive disadvantage. Gazette article

 


Handlers speak out on marketing proposals

The Swendrowski Plan

1/24/01 John Swendrowski of Northland Cranberries believes that "it is possible to develop a plan that will be fair to all growers and should return $35 to $40 per barrel" and "that is not possible to develop a plan that provides every handler with the fruit they want at the price they want." He is in favor of a Marketing Order that serves grower issues before handler interests. Swendrowski writes "we must strive to develop a plan that should increase grower prices to the $35 to $40 range and addresses as many handler concerns as possible."

Swendrowski Plan

Rob Hiller calls for fairness, creativity, in letter to his growers

1/24/01 Hiller writes in a letter to his growers "I believe that we must tackle the surplus problem now to bring those of us who are growers back to pricing levels that ensure our economic survival. However, the entire industry must come together to achieve this result. We must devise a plan that ensures that growers and handlers alike are treated with fairness, and that any possibility of price gouging is eliminated."

Hiller letter

John Decas presents compromise proposal on Marketing Order

1/23/01 John Decas suggested a plan at the Seminar of the Wisconsin State Cranberry Growers' Association today that he believes  "will be easy to administer, fair to all, that will send the right message to the trade early in the year when the message is most effective, and will get you to $40/barrel a lot sooner than the Hawthorne or Swendrowski plans, and certainly a lot sooner than the Ocean Spray goal of 2003." Decas plan.

 

Swendrowski on the Decas proposal

1/24/01 John Swendrowski has harsh words for John Decas, writing that he is "sick of the accusations and innuendo within the Decas editorial aimed at Ocean Spray and Northland. It is simply designed to inflame individual growers and to divide the growing community as we try and solve the problem in a manner equitable to all growers." 

Swendrowski challenges Decas to "make the financial results of all of his entities public so everyone can determine his level of 'pain' and his contribution to solving the industry problem." Swendrowski's response to Decas

Jack Crooks of Ocean Spray responds to the Decas proposal.

Editorial - Looking back:

July, 1999: "New Coke shelf stable juice line
predicted in Sept. 1998,
and how things have changed"
and how things have changed, again.

 

1/23/01 What will the juice war between Pepsi and Coke mean for Ocean Spray and Welch's. Can Ocean Spray really be "the best juice company in the world" when Tropicana and Minute Maid will be battling for that title and the millions of dollars in profit that goes with it?  Read this updated editorial.

 

Update: Forbe's Magazine article

1/24/01 Readers who clicked on the link to Luisa Kroll's article about Ocean Spray, "Red Alert," probably missed the Forbes print edition where the article was subtitled, as it was in the print issue, "The farmers who own Ocean Spray could have gotten rich - if they had thought like capitalists. But their organization has more of a socialist flavor." For readers of its Global Edition, Forbes took a different approach and entitled the article "Ocean Spray is too socialist: cranberry farmers who won't sell." Read what Forbes Magazine reporter Luisa Kroll has to say about Ocean Spray in her article "Red Alert" here. 

Ocean Spray not for sale

"The growers of Ocean Spray have spoken," said board chairman Sherwood J. Johnson. "They want to keep this company in their hands and maintain the family-farming way of life that has defined them as people - and has defined Ocean Spray as a brand - for more than 70 years."

Read company press release


Newspaper coverage

The Brockton Enterprise managed to reach a number of growers in California yesterday. Their article is the only one with quotes from growers who were at the Annual Meeting. This comprehensive article is now archived, you can find it by clicking here and going to Jan. 17, 2001, if you have trouble accessing it email Stressline.

1/17/01--Greg Winter, who covers the food and beverage industry, including Coke and Pepsi, for the New York Times, writes "Looming over the hopes for Ocean Spray's recovery are the aggressive efforts by some of the major soft- drink companies to swallow up a greater share of the juice market. Along with its planned acquisition of Gatorade, PepsiCo has been making forays into the cranberry juice business through its Tropicana division and its licensing agreement with Dole, introducing a level of competition with which Ocean Spray has rarely had to contend."  New York Times

"Ocean Spray spokesman Chris Phillips said management hopes yesterday's votes put to bed a divisive issue that's pitted growers against other growers and management." Boston Herald

"It's an extremely optimistic set of beliefs that a company the size of Ocean Spray can go up against Coke and Pepsi," (Hal) Brown said. Milwaukee Journal Sentinel

''Obviously, we're disappointed in the vote,'' said Bob Stears, a spokesman for Hammonton, N.J.-based A.R. DeMarco, one of the plaintiffs (in the lawsuit against Ocean Spray). ''We're going to get together in the course of this week and make a determination of what our next move will be.'' Associated Press article in the Boston Globe

 

 



2/5/01

"What this company needs to enhance shareholder value is a takeover raid—if only there were such a thing in the co-op world."

1/18/01 -- Read what Forbes Magazine reporter Luisa Kroll has to say about Ocean Spray in her article "Red Alert" here. 

Luisa Kroll, has been a reporter for Forbes Magazine for five years. She writes on numerous topics from the dot- coms to acquisitions to venture capitalists. You can read or review her numerous articles by clicking here. She spent three weeks researching her article ("Red Alert" in Forbes Magazine, 2/5/01).

Kroll interviewed virtually all the significant players in the cranberry industry on the phone before spending two days in Massachusetts, on Jan. 4 and 5th. She attended the Cranberry Market Outlook Seminar on the 4th where she met many of the people she previously interviewed. She then met with Ocean Spray CEO Robert Hawthorne on the 5th in the Lakeville headquarters.

The unedited article would have run several pages. After several edits which were necessary to fit existing space in the magazine, the published article only ran one column.

More newspaper coverage

Dissident grower/owners had proposed the resolution as a way to test the opinion of the cooperative's 804 cranberry growers and 126 grapefruit growers on the issue of selling or merging Ocean Spray. The company had been criticized by the dissident grower/owners for protecting the cooperative's interests over those of smaller growers. Some smaller growers viewed a sale, which might allow them to sell Ocean Spray stock at higher than the $25 per share value it has held for decades, as a last-ditch effort to stave off bankruptcy. New Bedford Standard Times

The Wall Street Journal carried a short article based on the Ocean Spray press release, and put the Associate Press article out on the Dow Jones Newswire.


Ocean Spray Annual Meeting - Day One

1/16/01 -- The first day of the Ocean Spray Annual meeting in San Diego featured Hollywood style presentations with visual effects and music. It was a positive and uplifting presentation about the turnaround plan and on cranberry, citrus, overseas, and new products. Statements about how well the test marketing and the overall turnaround plan were working drew enthusiastic applause. CONTINUED

 


 

Letter:

Farm Service Agency Cranberry Market Loss Payment

1/16/01 -- We have hit the proverbial bump in the road! The Office Of Management and Budget (OMB) is withholding approval of the certification form until the rules are published in the Federal Register.

USDA officials are trying to get OMB to relax a bit and approve the form so it can be mailed to producers for certification before the rules are published.

What does this mean to you? The process may be delayed for a couple of weeks. Cross your fingers and hope USDA can prevail with their efforts. From Paul Russell


Decas meeting open to all

1/16/01 -- John Decas, who is known for his lucid and down-to-earth presentations on controversial topics, has extended an invitation to all growers and interested parties to attend a Decas grower meeting on January 27th, at 9:00 A.M., at the Wareham Elks Club. He intends to present his views on the various dumping proposals and how they effect cranberry growers. Decas believes that Ocean Spray and Northland have failed their own growers by developing a surplus. He says that they "should not be allowed to dictate the terms to those of us who have managed our companies and our inventories in a responsible manner."  In a letter to his growers he writes:

I wish to emphasize that forces are at work to impose a volume regulation upon our industry that threatens your very existence. Ocean Spray and Northland, who have demonstrated that they cannot make good judgments on how they manage their companies, now contend that they have the right answers for the rest of us. Their proposals are weighted heavily in their favor (big surprise) and are deliberately designed to put the rest of us at a distinct disadvantage.

I believe there is an equitable way to not only destroy the surplus but to also impose the necessary discipline to keep future oversupply at a minimum.

He says that the current crisis "doesn’t have to be as bad as it is, and that "together we can have a voice that is heard and that will help restore sanity to our industry."


Ocean Spray Annual Meeting begins with workshops and lobbying

1/15/01 -- The Ocean Spray Annual Meeting began today in San Diego with a full day of scheduled workshops including presentations about the turnaround plan, what the value of Ocean Spray might be if the juice business were to be sold, and if a sale were to occur, what the remaining cooperative might look like and what would be the expected price paid for fruit. 

The ultimate results of the proxy vote are still uncertain. A significant number of shares are still in the hands of growers who are waiting to hear today's presentations before making a decision.

Informal meetings have been going on all weekend as advocates for each proxy met with growers to answer their questions and to explain their positions. 

An independent accounting firm has been retained by Ocean Spray to count the proxy votes. Supporters of the alternate proxy have requested that they have an observer present for the vote count.


1/12/01
Enterprise article:
Cranberry growers ponder forming own coop 

The above meeting was also covered in the Patriot Ledger under the title:
Cranberry crash crop: Growers' petition pushes guarantee
 


1/11/00
Middle- boro
Gazette
Article on outlook seminar

Why the Decas proposal will not work

by Jack Crooks, 
 Ocean Spray Cranberries, Inc.

Republished from the Ocean Spray ExtraNet with permission

1/12/01 -- The recent proposal by John Decas defines surplus as the amount of inventory that each handler has left over from the prior year's crop at the end of December. To calculate surplus the handler would report the amount of August inventory (from the prior crop) a handler has remaining on December 31 (after harvest of the new crop). In this proposal, handlers would be responsible for disposing of fruit and handlers without inventory at the end of December would not be subject to the Volume Regulation. Note: This analysis was sent directly to John Decas. CONTINUED


Letter

"Growers Unite"

1/12/01 -- On January 11, 2001 a group of growers met in a small coffee shop to discuss the future of our industry and to form a coalition to present our perspective at the Cranberry Marketing Order in Arlington, VA on Feb. 5.

If a Marketing Order is implemented, we will again sacrifice some of our crop. As the committee continues to discuss the pros and cons of the handler withholding model versus the producer allotment model, one fact is a common thread in both sets of rules. We will not be paid for all of the fruit that we can deliver to the handler.

Either plan is a hardship for the grower. The Cranberry Marketing Order is said to be a marketing tool that growers can use to return their market to a profitable level. But the CMC does not set the price returned to the grower. We need our voice to be heard. We need the handlers to honor our demand to return to us a minimum price of $40 per barrel if a Marketing Order is implemented.

If you agree with this petition, sign it and return it to me. E-mail me if you have questions. I will deliver these petitions to the Cranberry Marketing Committee and the USDA on Feb. 5.

Doanne Andresen, email andresen@adelphia.net 

Copy of Petition



 

Op-Ed

On the Darlington/Connors ExtraNet posting

by Dean Pappas

1/12/01 -- It was brought to our attention that comments were made on the Ocean Spray extranet by Joe Darlington and Brenda Connors impugning Clement Pappas & Co., Inc. and its treatment of New Jersey tomato growers.  While the extranet is supposedly limited to Ocean Spray growers, it obviously is distributed to many other members of the cranberry community.  We would like to clear up some misrepresentations that were made by the aforementioned persons. CONTINUED


Coca-Cola and the noncarbonated beverage market

1/12/01 -- In an article about Coca-Cola's plan to buy the small ready-to-drink coffee beverage company, Planet Java, in today's Wall Street Journal, reporter Betsy McKay writes: "A relative latecomer to noncarbonated beverages, Coke in recent months has been promising an aggressive expansion of its product lineup, and the acquisition gives it entry into a small but growing segment." McKay continues: "Coke has a sizable portfolio of noncarbonated brands, including a bottled water, juice drink, juices and iced tea," noting that "Coke has some catching up to do with Pepsi, which in recent years has amassed a formidable arsenal of top-selling brands, and which dealt Coke a blow late last year by agreeing to acquire Quaker Oats Co. and South Beach Beverage Co., both owners of powerful noncarbonated brands."



Decas dispute with freezer company leads to furor over Ocean Spray ExtraNet posting

See related Decas letter below on right

1/10/01 -Winterport Terminals, a warehouse in Winterport, Maine, has announced its intention to sell 2.6 million pounds of wet processed frozen cranberries belonging to Decas Cranberry Products at public auction. The company claims a lien obligation for money owed by Decas. John Decas told Stressline that payment was withheld because some of the fruit was damaged. He says that this is nothing more than a dispute between a cranberry company and a freezer company about whether or not cranberries were damaged. It has nothing to do with the surplus or broken contracts. It is very similar, he says, to a legal dispute that has been going on between Ocean Spray and a freezer company in New Jersey for storage of the 1995 crop. Attorneys for Decas and Winterport are discussing the matter. According to Edward C. Russell, Esq., attorney for Winterport Terminals, the auction originally scheduled for today was cancelled and will be rescheduled.

Typically, notices of cranberry auctions are sent to handlers and other interested parties. It is likely that Ocean Spray would have received a copy of this auction notice.

Decas said that he learned from several of his growers that Joe Darlington and Brenda Conner posted the legal auction notice (which was published in a Maine newspaper) on the Ocean Spray ExtraNet, an Ocean Spray grower only message board. He was also told of another Darlington/Conner posting that suggested he was asking handlers with a surplus to dump, while he was allowing his own fruit to be auctioned off rather than dumping it himself. Decas said he views the postings as part of a smear campaign orchestrated by Ocean Spray. 

Decas said that he believes "the implication of the Darlington/Conners posting is that Decas Cranberry's credibility and credit are being questioned." He notes that Joe Darlington is a member of the Cranberry Marketing Committee and as such considers his posting this notice to be irresponsible for someone who is supposed to be serving the entire cranberry industry.

Pepsi Launches Dole Line of Single-Serve Juices including Cranberry Juice Cocktail and Cranberry Grape

1/10/01 Press Release -- Pepsi-Cola Company is kicking off the New Year with the introduction of Dole single-serve juices, now making their way into vending machines, coolers and other retail outlets throughout the United States.

Developed with the support of PepsiCo's Tropicana R&D organization, the new Dole products are being distributed via Pepsi bottlers in sleek, wide-mouth, cup-holder friendly, 16-ounce hot-fill plastic bottles and 11.5-ounce cans. The non-carbonated, caffeine-free, single-serve Dole line includes nine natural fruit flavors (Apple, Orange, Pineapple-Citrus, Ruby Red Grapefruit, Cranberry Juice Cocktail, Paradise Blend, Cranberry-Grape, Orange-Strawberry-Banana and Strawberry-Kiwi), with as much as 100% real fruit juice and 100% USRDA of Vitamin C.

Single-serve juices and juice-drinks comprise the country's largest category of non-carbonated beverages, with retail sales exceeding $5 billion. CONTINUED


January 10, 2001

A letter to the Cranberry Community 

from John Decas

Yesterday, a message was posted on Ocean Spray’s Extranet from Joe Darlington, a New Jersey Ocean Spray grower, which painted Decas Cranberry Products, Inc. in a misleading light. Because I do not have access to Ocean Spray’s computer network, I am posting this message to everyone in the cranberry community over the Stressline so I can set the record straight.

As we all know, Ocean Spray has encountered serious difficulties, enduring strong competition from companies like Decas, numerous grower defections, diminishing market share, and eight consecutive years of losses. We have seen Ocean Spray flounder in its effort to recover, continually sidetracked by poor management decisions. Now, it appears that Ocean Spray has concluded that if it cannot compete fairly with others in the industry, it should try to drag them down by spreading rumors and innuendo.

CONTINUED

 

1/9/01: Related article
 in The Standard Times

AD Makepeace endorses growers' proxy

Largest Ocean Spray shareholder urges consideration of strategic merger

1/6/01 -- In a letter to Ocean Spray grower-owners (1/4/01) the A.D. Makepeace Company "strongly encourages" shareholders to vote for the alternate slate which supports the full disclosure of information Ocean Spray already has from Merrill Lynch and Bain & Co. about the ramifications of a sale or merger of the Ocean Spray branded business. 

The letter notes that in the fall of 1999 Makepeace sponsored a survey which showed that 64% of the shares responding agreed that a strategic merger made sense, 6% disagreed and the remainder said they were undecided. Most, 90%, wanted more information. It calls the period since the completion of their survey one during which there seems to have been a "blackout" imposed on any consideration of a strategic merger." The Makepeace board suggests that it was the lawsuit against Ocean Spray which prompted a "hurry-up presentation" being put on the Annual Meeting agenda.

A. D. Makepeace allows that the turnaround plan may help resolve some of Ocean Spray's internal problems; but they say that it doesn't "begin to deal with the external threats facing (Ocean Spray)." "It is critical," the letter states, "for growers to receive thorough, in-depth analysis of the 'go-it-alone' vs. the 'strategic merger' alternatives."

The letter was signed by Makepeace board members Joanna Makepeace Bennet, Richard E Canning, Jr., Zelinda Makepeace Douhan and Thomas Otis. Although he has spoken in favor of a full exploration of a strategic merger in the past, Christopher Makepeace, who is on the Board of Ocean Spray, did not sign the letter.

Related article here.


 

Northland Cranberries, Inc. Reports First Quarter Profit

1/8/01 Read press release here.


Campbell names Conant new CEO

1/9/01 "Unilever, was in talks to acquire Campbell last summer. ConAgra also showed interest in acquiring it last fall. Mr. Conant played down the possibility that Campbell would still entertain a sale, stressing his directive from the board to focus on the long- term financial health of the company. Given the directors' choice of a relatively young, first-time chief executive, most analysts tended to agree, viewing his selection as an investment in restoration rather than an endgame. 'They might want to merge, but when you're ugly you can't really find a good marriage partner,' said John McMillin, a Prudential analyst. 'So what the board is trying to do is clean the company up and put a better face on it.' " from the New York Times ||| Campbell Press release


Viewpoints on a Cranberry Marketing Order

John Decas ,
John Swendrowski
Doanne Andresen ,
Russ Lawton ,
Linda Rinta 
 

 


Article on the 1/4/01 Cranberry Market Outlook Seminar

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