Cranberry Stressline Archives
October 2001
Main feature
DeMarco
files suit against Ocean Spray
also
An open letter to the
Ocean Spray ExtraNet by Hal Brown and Betty Brown
-- Ocean
Spray Cranberries Inc. Ratings Lowered; Off Watch; Outlook Stable -- Cooperatives Give
Members Control Over Destiny -- Black carrot juice from Turkey --
Not for attribution by Hal Brown (includes "At least three more
lawsuits against Ocean Spray are in various stages of planning or
implementation at this time") -- Ocean Spray changes
White Cranberry Juice Drink label text
More on Nantucket Nectars 10/31/01 An article in the 10/29/01 edition of The Deal entitled Nantucket Nectars may be shopped stated that:
The article noted that their source speculated that the Nectars sale would be handled through Merrill Lynch, and went on to say that...
10/30/01 With the sale of Nantucket Nectars being discussed again, and in light of Coca-Cola's purchase of Odwalla (see right column), Stressline suggests readers revisit the Sept. 2nd editorial Some pros and cons of a sale of Nectars to Coke. As an addendum to that piece, we would add that the Ocean Spray label's virtual disappearance in single serve now leaves them with only Nantucket Nectars as a viable competitor in that segment. In the refrigerated juice aisle, which is growing at the rate of 30% a year, Ocean Spray has no other offering besides Nantucket Nectars. These two facts tip the scales against a sale, unless there are economic or other factors weighing in the opposite direction. To date Ocean Spray has not revealed what these factors may be. On the face of things, selling Nectars appears to be a last ditch effort to raise cash. One would expect Nectars' sales to double within the year as a subsidiary of a company like Coke's Minute Maid or Pepsi's Tropicana. If Ocean Spray really intends to remain a free standing juice company, helping Coke or Pepsi become an even more powerful competitor seems to defy logic. Related: 10/19/01 Beverage Digest Ocean Spray Likely Sells Nantucket Nectars by Year-End, Says Executive. and Lawsuit vs. Ocean Spray. 10/31/01 Press Release: Schneider Logistics Expands Its Relationship With Ocean Spray. 10/30/01 Press
Release on Coke purchase of Odwalla juices 10/30/01 Oregonian: Oregon cranberries bring more sugar and size to table 10/29/01 A.P. More On MA. bog fish farming Reuters: 10/25/01 Ocean Spray sets stage for comeback
The view from Oregon: Current, former Board members speak out Quotes: "I feel Ocean Spray
controls the market... they can raise the price, lower the price, do
whatever they want to do. They say they don't. They say they can't, but
you can't tell me they're not doing it.... Ocean Spray needs to
get mean and lean. They're not going to do it as long as the growers are
going broke and they're making money. I don't believe Ocean Spray
is run like a business, or maybe it's run like their business, not ours.
I don't believe it's a co-op any more. We can't vote like a co-op. They
don't tell you anything like a co-op should." "The market establishes the price of cranberries... Juice concentrate buyers, the marginal buyers, will pretty much set the price. Cranberry juice has to compete with all the other juices on the supermarket shelf. The housewife will buy the more competitive product.... The marketplace really sets the price.... We've already harvested the 2000 crop and anticipate, through projection, that it will be a fairly substantial increase from the 1999 crop... At this point we don't know what that will be. As a cooperative, we get paid as the product is sold. Right now, we don't know what that will be, but project that it will be from $17 to $25 a barrel.... It will be 14 to 15 months before we get the information on the 2001 crop we're harvesting now." Daryl Robison, Sixes, Oregon, Board Member of Ocean Spray Cranberries. "Technically, we're
both (ed. note: a corporation and a cooperative ) Ocean Spray is
more than a business. It's a way of life. (The DeMarco lawsuit is) an
attempt to push Ocean Spray toward a sale. We're involved in a
turnaround. Our market share was eroding. We stabilized the erosion and
are gaining back our market share. We're eating into the surplus. The
future will be bright again." from article Cranberries aplenty but farmers pessimistic about their future, by Oleh Lysiak, The World, Coos Bay, OR . The article also features interviews with Oregon growers Reg Pullen and Alex Ells.
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DeMarco files suit against Ocean Spray "Ocean Spray's directors have lobbied the US Department of Agriculture to cut production to force financially strapped members to sell back their stock. Directors hope to capture a share of the proceeds from an 'inevitable sale of the company' " Boston Globe Business Briefs (updated 9/29/01) Garfield DeMarco of New Jersey, a former member of the Ocean Spray Board of Directors, has filed suit against Ocean Spray for trying to force growers out of the cooperative. DeMarco was one of three principals who sued Ocean Spray last year. That law suit, filed in December, was dismissed without prejudice by the plaintiffs on 2/28/01 (more information on dismissal). DeMarco is the third largest Ocean Spray grower. He has been a strong advocate of the Ocean Spray Board directing management to pursue looking into the of selling the Ocean Spray branded business. Mr. DeMarco was not available to comment on the specifics of the suit because of the pending litigation. We hope to have the text of the complaint, filed in the Delaware Court of Chancery on Thursday, available next week. Ocean Spray spokesperson Chris Phillips, quoted in the Globe, stated that ''The claims have no basis in fact or law, and we're prepared to demonstrate that. We don't want to sell the company; we're in the midst of a turnaround.'' Editor's Note: Ocean Spray growers own shares of the cooperative based on barrels harvested. Their shares have been valued at a static $25 per share ever since the cooperative was formed. If the company is eventually sold, for example at $250 a share, an Ocean Spray grower would receive ten times as much for his or her stock than one who was forced to sell their cranberry bog or marsh prior to the sale. A.D. DeMarco Enterprises Inc. v. Ocean Spray et al The actual complaint is double spaced and indentations are not exact copies of the original document. Stressline cannot guarantee the exact accuracy of the rendering of every word, however we believe it is close to 99.99% accurate. DeMarco v Ocean Spray et al on one page for high speed connections and printing Part 1: The Nature of the Action and Factual Background (1-44) Part 3: The 2000 Annual Meeting and The 2001 Annual Meeting (90-122) Part 4: Ocean Spray's Intransigence and Management Entrenchment (123-147) Part 5: Counts I - III (148-177) Part 6: Counts IV - VII (178-216) Mr. DeMarco is represented by the law firm of Cozen & O'Connor (Philadelphia). His lead attorney is H. Robert Fiebach.
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An open letter to the
Ocean Spray ExtraNet
Hal Brown and Betty Brown
10/19/01 (Updated below) We thought that our suggestion that you send positive press releases to Stressline was a reasonable one. Imagine our surprise when you responded that when you post items on the ExtraNet that Stressline isn't on your "radar screen" and informed us that you would not add Cranberry Stressline, a resource many people count on for news about the cranberry industry, to Ocean Spray's distribution list. It seems a bit like discrimination against a publication that is out of favor with Ocean Spray management.
Your reference to the fact that you know by the "pings" that we access the ExtraNet frequently gives us pause, however. Many posters on the Stressline Forum have wondered about Ocean Spray monitoring their use of the ExtraNet. The logical conclusion from your remarks is that Ocean Spray does indeed keep, identify and review logons. As Jerry Seinfeld would say, "not that there's anything wrong with that," but ExtraNet users should be aware of that fact.
10/19/01 5:00 P.M. Addendum: In a follow-up, Ocean Spray has denied that they monitor their message board, and do not know who is who is posting unless growers identify themselves. They say they merely use their capability to identify users who access the web site to determine web site traffic. They say that logons from our password stood out because of the larger number of hits than most. However, they reiterate their refusal to put Cranberry Stressline on their distribution lists.
Ocean
Spray Cranberries Inc. Ratings Lowered;
Off Watch; Outlook Stable
Ratings
are removed from CreditWatch
10/19/01 (Ed. Note: Stressline was not able to post this earlier because we couldn't locate an Internet source for the report. Thanks to an anonymous poster on the Forum for supplying the URL for S&P report.) Read Report
"Broward County, Fla.'s largest law firm and one of its partners could face sanctions of up to $700,000 for making what a federal magistrate found to be frivolous claims in a racial discrimination lawsuit against Massachusetts-based Ocean Spray..." Miami Daily Business Review
OCEAN SPRAY BONDS From The Bond Buyer Oct. 9, 2001 "New Jersey Economic Development Authority, industrial development revenue 8,000 A+/A-1 AA/A-1+ S&P Downgrade of LOC provider. refunding bonds, Series 2001 (Ocean Spray Cranberries Inc.) (LOC: Wachovia Bank)" KEY -- Dollar amounts represent the amount of bonds outstanding in the issue. Rating changes that result from the purchase of the letters of credit or bond insurance for issues in the secondary market are not included. ISSUER - AMOUNT- CHANGE - BOND ($000S) -TO - FROM - NAME - COMMENTS
10/10/01 BLOOMINGTON, Ill.--(BUSINESS WIRE) October is Cooperative Month, a time to celebrate businesses structured to benefit the members who use their products and services. A national survey conducted by the National Cooperative Business Association in Washington D.C. identified cooperatives as a form of business that people trust. Why? Because cooperatives are owned and controlled by the people they serve. Examples of this unique form of business include GROWMARK, a regional agricultural supply and grain marketing cooperative and the 300 local cooperatives that it serves in the Midwest and Ontario. During times of challenge and change, it is refreshing for cooperative members to realize that when they use their cooperative, they are taking part in a business that they own and control. How do members control their cooperative? They elect the board of directors, usually at the organization's annual meeting. The board hires the manager, sets the policy for cooperative operations, and makes all major financial decisions. How do members own their cooperative? Most ownership today is in the form of "patronage stock" that members receive as part of the distribution of earnings for business done with the cooperative. In the American private enterprise system, cooperatives are one of four types of businesses: individually owned businesses like many of today's farms, partnerships, and corporations of which there are two kinds -- investor owned corporations like General Motors and cooperative corporations like local FS cooperatives. Examples of products marketed by cooperatives for the producers they serve are Prairie Farms ice cream, Sunkist oranges, Ocean Spray cranberry juice, Sun Maid raisins, Lindsay olives, and Blue Diamond almonds. Members own the cooperatives that market these products. As a consumer, you probably identify these brands as the best you can buy. Cooperatives are truly a kind of business you can trust. GROWMARK, Inc., based in Bloomington, Ill., is a federated regional cooperative that provides agriculture-related products and services primarily in Illinois, Iowa, Wisconsin, and Ontario, Canada. FS-brand farm supplies and related services are marketed to farmers in these areas by member cooperatives. Visit the GROWMARK Web site at www.fssystem.com. PRINT Not for attribution*
This information comes to Stressline from reliable industry sources. Draw your own conclusions. * The individuals providing this information have done so confidentially, to inform Stressline readers. They are not anonymous sources, but are known to Stressline as knowledgeable industry insiders. They have been correct in their information 100% of the time on previous occasions. However, Stressline cannot ever guarantee the accuracy of information that comes from a single source. Press ReleaseAll-American Thanksgiving Favorite Offers Health Benefits http://www.theworldlink.com/display/inn_news/news01.txt10/23/01 Cranberry Institute - Since the first Thanksgiving of 1621, cranberries have, and continue to be, on most American's holiday menus. Not only are cranberries popular because they're steeped in this country's heritage - they also serve up a variety of potential health benefits. CONTINUED Newspaper articles 10/21/01 - Small growers team up to get crop in, then prepare for winter Boston Globe 10/19/01: Eating By Color to Encourage Successful Aging - Press Release 10/16/01: Parkay Plans Pink,
Blue Margarine... Press release
10/15/01 Minute
Maid and Harry Potter
10/9/01
Red
ink: With the 2001 harvest under way...etc, 10/9/01 Patriot Ledger Archives
10/7/01 Smaller-than-average
crop... and Companies
find new markets... in WI Rapids Daily Trib. 10/7/01
Lessons
in economics.. The World, Oregon
10/5/01 Cranberry
farmer fishes... Standard Times
9/30/30 Makepeace
plans Globe
9/29/01 Press Release: Eric Langone
at CCCGA
9/25/01 - Natl.
Geographic segment 9/24/01
O
S cranberry market with white berries
Associated Press Black carrot juice from Turkey ! 10/12/01 (click for letter with photo) Stressline received the following unsolicited, and surprising, email was received this morning. We thought readers would be interested and published it (below). The picture, above, was sent later by Mr. Dervisoglu after he saw his email on the web site.
Ocean Spray marketing new "splash of grapefruit" citrus product 10/09/01 Ocean Spray grapefruit growers may be looking at a windfall if the companies new "Juice Waves" is successful. An article in Sept 6th Star Tribune states: "Ocean Spray, for example, which already sells just about every possible cranberry-something juice, has a new line called 'Juice Waves.' It consists of 'tangerine citrus' and 'grape citrus,' in which the mysterious 'citrus' in both cases is grapefruit juice, which Ocean Spray already markets in three just-grapefruit varieties (ruby red, white and pink) and four blends (ruby red cocktail, ruby-tangerine, ruby-mango and ruby-strawberry)." The product is 10% juice with a "splash of grapefruit." Red 40 color is used. There is no cranberry in either product. Ocean Spray changes White Cranberry Juice Drink label text 10/09/01 Ocean Spray made major revisions of the text on the label of its new white cranberry juice drink without altering its meaning. They still state that white cranberries are fully ripened and that they are less tart than fully ripened red cranberries. On the front of the label the cranberries pictured are several shades pinker than the berries depicted on the original label. The pink background for all the other text has been lightened up as well. Instead of a small Ocean Spray logo on the lower left corner an oval with the words "Made with Natural White Cranberries " has been substituted."
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Quote from Sarah Johnson, O.S. U.K. manager: "the white cranberry is not fully ripened", Cartoon: Watch out Welch's;" Mountain Dew makes it big by turning Red: Advertising Costs: Virtually Zero; Makepeace cancels plans; Editorials: Will good sense prevail? Changing the Label of White Cranberry Juice: There's no worse stain than when it's on the reputation and credibility of a trusted company; The white cranberry lie-o-meter; Ripe vs. Mature; Some pros and cons of a sale of Nectars to Coke; Press Release: The Cranberry Gets a Makeover; Ocean Spray to Harvest First Crop of 'White Cranberries'; Some have argued that the rattlesnake is not an appropriate symbol for farmers to unite under. We disagree...; From Russia, with cranberries; Media: Related: from 8/29 Coca-Cola May Be Eying Nantucket Nectars; Image scans from Ledger: Scan 1 | Scan 2 | Here's one we missed from New Jersey | 8/22/01 Bitter Protest - Cape Cod Times | Boston Globe Article
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