Cranberry Stressline Archives

Jan 23 - Feb. 4, 2001

Topics: White cranberry juice, positions on marketing order, growers organizing,
the juice war between Coke and Pepsi

Ocean Spray corrects A.P. story

The following correction was made by the Associated Press to the story referred to below:
"In a Feb. 3 story about the Ocean Spray agricultural cooperative's plan to introduce a new type of cranberry juice, The Associated Press reported erroneously that the cooperative is ''teetering on the edge of bankruptcy.'' Chris Phillips, an Ocean Spray spokesman, said Sunday that while some growers have suffered because of low prices, the cooperative itself is fiscally healthy and is not near bankruptcy. The cooperative had net earnings of $59 million last fiscal year, and expects $140 million in earnings for this fiscal year, ending Aug. 31."

Ocean Spray white cranberry juice hits the media

2/3/01  Today's Patriot Ledger published a front page article titled "A clear strategy: In bid to boost sales, Ocean Spray to make white cranberry juice." The article says:

"The juice is made from green or white cranberries picked early before the skin reddens and has all the health benefits of regular cranberry juice, Phillips said."  

Phillips notes that white grape juice represents 38% of Welch's grape juice sales. White grape juice is made from ripe Eastern Niagara grapes.  They are more difficult to grow, require better sites and generally yield less per acre than purple Concord grapes, so consumer acceptance of Niagara grape juice has been a boon to their growers. 

According to Cranberry Marketing Committee Director David Farrimond, consumer acceptance of white cranberry juice  "should help extend the season particularly in northern Wisconsin where the growing season is shorter and farmers often have to pick before berries have a chance to turn red."

Newspapers

Ocean Spray makes clear-cut move: Company says it will make white cranberry juice 2/5/01 - Burlington County Times

National Public Radio broadcasts cranberry story on Monday's Morning Edition

2/4/01 Jason Beaubien, who is a reporter with Boston's WBUR radio. His story aired nationally on public radio stations which carry Bob Edwards' Morning Edition yesterday. Ocean Spray Board chaior Buddy Johnson and CEO Robert Hawthorne were itnerviewed, as was Ocean Spray grower Ron Drollette. You can replay the six minute story here.

Second Wisconsin group organizes

2/3/01 Update: Bassuener Cranberry Co., Golden Sands Cranberry Co., Jenny Lake Cranberry Co., Miller Cranberry Co., Oak Ridge Cranberry Co., and Ranger Cranberry Co., all Wisconsin cranberry growers, have retained a law firm to assist in exploring the organization of a new growers’ association or cooperative. Their lawyers have sent a letter* to 271 Wisconsin growers along with a questionnaire**. Another group of Wisconsin growers has been meeting at the TeePee restaurant and has posted several messages on the Forum. It is our understanding that eventually the two groups hope to work together, and then try to merge their efforts with east coast growers who have organized a petition drive for a $40 minimum price. * Letter | ** Questionnaire 

CMC inventory figures

and

New England Agricultural Statistics Service Special Report on 2000 cranberry crop

At the request of the Cape Cod Cranberry Growers Association, a preliminary 2000 cranberry price was estimated for the state of Massachusetts in January, 2001. The preliminary price per barrel is based on handlers expectations in early December, and averaged $20.30 per barrel.

Special report (text)

PDF version with charts

Editorial

Clear cranberry juice

2/1/01 -- Let's hope Robert Hawthorne is as good a marketer as he is a showman. 

His rhetoric has Ocean Spray growers enthusiastic about the launch of a new clear cranberry juice in test markets. If he's right about the potential sales of clear cranberry juice, not only will Ocean Spray benefit, but so will the entire industry. 

Of course, that's if people buy more cranberry juice overall and don't merely switch from red to clear. It will also benefit the industry if some cranberries which are picked green can immediately be made into concentrate.

By all reports the juice tastes great. But will it sell? And as far as Ocean Spray's bottom line, will it sell well enough, even in test markets, to make back the cost of manufacture, packaging, advertising, promotion and slotting fees? CONTINUED

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. 

Previous Edition

The decision not to sell, the Ocean Spray Annual Meeting, Cranberry Marketing Committee issues, articles by Jack Crooks, Dean Pappas, John Decas and others, plus

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