Cranberry Stressline

Archives

November, 2001

Beacon Hill Institute study: No Thanksgiving for the Massachusetts Cranberry Industry; Update on DeMarco lawsuit;
Northland commercials take aim at Ocean Spray's cranberry content;
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Welch's goes on offensive in marketing challenge against cranberry: Ocean Spray focus of video clip
Affiliate of Sun Capital Partners Acquires Control of Northland Cranberries, Inc. as Part of a Successful Debt and Equity Restructuring; New Northland Board; Northland no longer to be traded on NASDAQ, Northland Cranberries, Inc. Announces One-For-Four Reverse Stock Split to Facilitate a Potential Debt and Equity Restructuring Transaction; Editorial: Nantucket Nectars --  If you can't fix it, sell it

Update on DeMarco vs. Ocean Spray

11/26/01 Ocean Spray had until November 21st to file a response to the DeMarco Complaint. They have done so, filing a standard motion to dismiss. They have challenged the legal sufficiency of the Complaint.  A briefing schedule has not yet been set. Stressline will have further information if and when it becomes available.


Media

Boston Business Journal: Health article 11/19/01

11/22/01 Cranberry growers struggle through the hard years Enterprise

N.Y. Times: Another reason to eat cranberries

 Bangor Daily News: Cranberry glut nearing its end

DNE World Fruit sales now selling Spanish clementines under Ocean Spray label "We have the licensing rights to use the Ocean Spray label, so we wanted to leverage consumer awareness with that brand name on our clementines." Bill Weyland,  for DNE in The Packer Also from the DNE web site Fresh Ocean Spray Argentine lemons.....

Northland Cranberries' most recent SEC filing details recent acquistition 

11/17/0l
Complete list of CMC Proposed Amendments


Interview with Dr. David Tuerck, about Beacon Hill Institute study on Mass. cranberry industry, from New England Cable news

11/24/01 Editor's Note: The study No Thanksgiving for the Massachusetts Cranberry Industry was the feature article in NewsLink, the publication of the Beacon Hill Policy Institute of Suffolk University. From the study: "This year's Massachusetts cranberry crop is turning out to be especially disappointing, so that local handlers and processors find themselves struggling to meet demand. The result is that those demands will be met, if it all, largely from inventories and from cranberries produced out of state and out of the United States. If the marketing order was intended to consolidate Ocean Spray's market power, then it is succeeding splendidly. If it was intended to shore up Massachusetts' declining market share, then, as with so many past price-fixing arrangements, it is failing badly."  Text only version of Beacon Hill Institute Study: No Thanksgiving for MA Cranberry Industry

11/19/18 A front page article entitled "State Cranberry Growers get Squeezed" in Sunday's New Bedford Standard Times* once again pits Decas Cranberries against Ocean Spray. The article, which features two photographs of John Decas, says that "critics accuse Ocean Spray of manipulating government regulations to achieve market dominance..." and cites a study by the Beacon Hill Institute for Public Policy Research at Suffolk University as supporting this conclusion. The study, No Thanksgiving for the Massachusetts Cranberry Industry, was authored by David G. Tuerck, Executive Director, Beacon Hill Institute and Chairman and Professor of Economics, Suffolk University; John Barrett, Research Economist, Beacon Hill Institute; and Corina Murg, Research Assistant, Beacon Hill Institute.
It was published in Beacon Hill's quarterly newsletter, Newslink, and includes the following:

John Decas, an independent Massachusetts grower and processor, has explained in testimony how this process affects him: “Buyers of about 80 percent of my concentrate supply have told me and my brokers that they have been visited by Ocean Spray representatives and offered cranberries below the price they intend to charge my company to replace my regulated berries. In other words, Ocean Spray is using the marketing order... as a predatory means of acquiring a major portion of my companies market share.” 

Ocean Spray management seems to welcome this criticism. CEO Robert Hawthorne has been quoted as saying, “We need to manage the oversupply problems. When we take back our market share, we are not taking anything away from anyone, we are taking back what belongs to us...what is ours! The only place that Northland [a competitor] belongs, is in receivership.”  Read article

The Standard Times quotes Chris Phillips on the marketing order "(regulation) has been helpful to the cause of balancing supply and demand... but we know it's been excruciating for growers."

*Not available online


New Northland commercials take aim at Ocean Spray's cranberry content

nl_111501a.jpg (44375 bytes)11/15/01 (click photo to enlarge) Northland Cranberries is airing commercials on The Food Network promoting it's 100 juice 27% cranberry blends with a direct comparison with Ocean Spray's blended cranberry juice products, none of which contain 27% cranberry juice. The voice-over of the commercial emphasizes the cranberry health studies which were all done using 27% cranberry juice. The text is as follows:

Medical studies suggest that cranberry juice cocktail with 27% cranberry juice provides you with important health benefits. If you prefer the taste of a blend; but still want the health benefits of cranberry, look to Northland. 

All Northland blends have 100% juice, 27% of it cranberry. Northland says it on the label. No one else can say that. Others, like Ocean Spray don't. Their cranberry juice content can be as little as 6%. Northland... always 100% juice... and 27% of it cranberry.

The imagery of the commercial seems to emphasize informed choice. The consumer is shown with her cart on the juice aisle (photo one) shopping for a cranberry juice blend. She looks over the various choices, Ocean Spray among them (photo two). Then she checks out the Northland label and is pleased by what she sees (photo three). It has 27% cranberry juice (photo four).

The segment of the commercial sure to stir up the most controversy, illustrated by the photo above, shows a number of Ocean Spray blends with various percentages zooming in from different bottles of Ocean Spray juice blends, and then fading out. It ends with 6% alone on the screen in front of a bottle of Cran-Grape (photo five).


Other news

11/16/01 Cranberries Rank High in Antioxidants, New Research Cranberry Institute
Science Daily picks up story

  Searchable Government Farm Subsidy Records Now Available

11/7/01 Northland SEC Filing

Follow Northland stock


Welch's goes on offensive in marketing challenge against cranberry
Ocean Spray focus of video clip

os_welch.jpg (38020 bytes)11/12/01 (Photo from Welch's video clip, click to enlarge) Welch's new campaign promoting the health benefits of purple grape juice (see Drinking Purple Grape Juice may also help with Urinary Tract Health ) challenges cranberry juice as the sole choice for consumers interested in a product that may benefit urinary tract health. Their media releases also state that they are promoting only their purple juice for certain health benefits (cardio-vascular, anti-oxidant, and UTI); unlike Ocean Spray, whose latest pronouncement (in the 11/9/01 Standard Times) states that their "white juice has the same health benefits but tastes a bit sweeter."

In a follow-up sentence, Ocean Spray's vice-president for international sales, Malcolm Lloyd makes a seemingly contradictory statement. He is quoted in the same article as saying "like the difference between white wine and red wine." Scientists have made similar discoveries about the different health benefits between white wine and red wine as they have made for white and red or purple grape juice. (Ed. note: Wine maker's science marches on: read cutting edge research.)

Until now with the UTI studies, Welch's has promoted the health benefits of its purple grape juice as heart healthy, and the health benefits of its white grape juice as being easily digestible  for babies, using scientific studies which compare it to pear juice and apple juice. Ocean Spray is promoting the white cranberry juice as being ideal for families with children because they claim that it does not stain, and "has the healthy goodness of traditional cranberry juice without the tartness."

Welch's uses Niagara Grapes for its white grape juice. Ocean Spray's new white cranberry juice, is made from cranberries which are harvested before they have fully ripened to their red color, and have developed their complete compliment of chemical compounds, some of which are thought by scientists to offer certain health benefits. The white cranberry juice is expected to compete with Welch's white grape juice. 


11/15/01 From the Packer: Fresh cranberries available until December

11/15/01 Researchers Find Tart Cherries Fight Arthritis Pain, Inflammation

Poor cranberry crop has silver linings - 11/12/01 WI Rapids Daily TribuneCranberry

On TV:  Farmer Creates Patriotic Bog Boston Ch.5

Ocean Spray will spend $28 million on commercials this year alone- 11/11/01 Standard Times

11/9/01 Cranberry marketers not reaching young men Standard Times

Science journal publication on health benefits 

11/7/01 - Article on Welch's layoffs in Boston Globe
"Many other agricultural commodities, including cranberries, are suffering from gluts. Welch's has the opposite problem. Demand for its grapes has so outstripped supply that Welch's has been forced to cut back on some of its marketing."

New Northland Cranberries Board 

10/7/01 The new six member Northland Cranberries Board of Directors consists of five top Sun Capital Partners executives, including the companies co-founders Rodger R. Krouse and Clarence E. (Bud) Terry. Both are managing directors of Sun Capital, as is fellow board member, Marc J.  Leder. Joining them on the board are Sun Capital V.P.'s Kevin J. Calhoun and David L. Kreilein. The sixth board member is John Swendrowski, founder and CEO of Northland Cranberries.

John Swendrowski is the Chairman of the Board. Marc Leder and Rodger Krouse are Vice-Chairmen.

  Biographies of Northland Cranberries BOD, provided by Sun Capital Partners.


Wisconsin Rapids Daily Tribune article on Northland

New cranberry variety released

CMC Proposed Amendments

 Press Release: (From PR Newswire) Ocean Spray Offers Consumers Free Chef's Recipe Collection for Fresh Cranberry Season

11/6/01 Nantucket may loose cranberry as local color Cape Cod Times


Press Release

Affiliate of Sun Capital Partners Acquires Control of Northland Cranberries, Inc. as Part of a Successful Debt and Equity Restructuring

Northland Anticipates Reporting a Pre-Tax Loss of Approximately $100-110 Million for Fiscal 2001, Including Approximately $100 Million of Asset Writedown Charges

11/6/01-- Northland Cranberries, Inc. (Yahoo! Bulletin Board: NRCNA - news), manufacturer and marketer of Northland 100% juice cranberry blends and Seneca fruit juice products, announced that it consummated a debt and equity restructuring that allows it to successfully avoid a bankruptcy proceeding. Northland expects that this restructuring will provide it with sufficient working capital and new borrowing capacity to once again aggressively market and support the sale of its Northland and Seneca brand juice products.

The debt restructuring was accomplished through the exchange by the members of Northland's then current bank group of approximately $151 million of total outstanding revolving credit agreement indebtedness for a total of $38.4 million in cash, as well as by Northland's issuance of revised debt obligations in the total principal amount of $25.7 million and newly-issued shares of common stock representing a total of 7.5% of Northland's fully-diluted common shares to the certain bank group members which decided to continue as lenders to Northland. The debt restructuring occurred pursuant to an agreement for the assignment and assumption by Sun Northland, LLC, an affiliate of Sun Capital Partners, Boca Raton, Fla., of a portion of Northland's bank group indebtedness. CONTINUED

Sun Capital Web site

Sun Capital won Buyouts' first small deal of the year award

 

Facing liquidation, Northland restructures debt 

  • Debt restructuring gives the company badly needed cash - but leaves shareholders with just 5% of the company's stock.

  • Control of Northland was transferred to Sun Capital Partners Inc., a merchant banking firm based in Boca Raton, Fla. will control 77.5% of Northland's stock.

10/6/01 Article in Milwaukee Journal Sentinel


Northland no longer to be traded on NASDAQ
CBRYA becomes NRCNA in OTC market
1:4 reverse stock split, potential debt / equity transaction


Press Release

Northland Cranberries, Inc. Announces One-For-Four Reverse Stock Split to Facilitate a Potential Debt and Equity Restructuring Transaction

 Northland Shares to Trade Over-The-Counter Under New Trading Symbol 'NRCNA'

11/6/01--  Northland Cranberries, Inc., manufacturer and marketer of Northland 100% juice cranberry blends and Seneca fruit juice products, announced that its Board of Directors approved a one-for-four reverse stock split. As a result of the reverse stock split, each four Northland shares outstanding is being automatically converted and combined into a single share. Fractional shares otherwise resulting from the reverse stock split will be rounded up to the next highest share. Northland's Board of Directors was previously provided with the authority to effect this reverse split by Northland's shareholders at its January 30, 2001 annual shareholders meeting.

Northland is effecting the reverse stock split to facilitate a potential debt and equity restructuring that, if consummated, would allow it to successfully avoid a bankruptcy proceeding. There can be no assurance that any such restructuring transaction will be consummated or on what terms or conditions. However, it is expected that a successful restructuring would likely provide Northland with sufficient working capital and new borrowing capacity to once again aggressively market and support the sale of its Northland and Seneca brand juice products, but would likely significantly dilute current shareholders' ownership percentage in Northland.

 CONTINUED


Editorial:
Nantucket Nectars

If you can't fix it, sell it

Boston Globe 12/11/97: 

"Tom and Tom have a recipe for success. We have no intention of fiddling with that formula. We're going to offer them a bigger universe in which to do their thing," said  (Tom) Bullock.

The alliance with Ocean Spray lets Nantucket Nectars "take it to the next level" and still remain private,  (Tom) Scott said.

11/3/01 Nantucket Nectars could have been be a sparkling diamond, a small but valuable addition to Ocean Spray shareholder's portfolio, during these difficult times for the cranberry industry. Instead, the subsidiary languished, while a similar company, Odwalla, under smart and confident management, grew and made itself into a lucrative takeover target. It is about to make its shareholders a tidy profit as it becomes a part of CocaCola. 

The growers of Ocean Spray should be so fortunate. 

The "Two Toms" expressed effusive optimism when the homegrown company they nurtured into a business phenomenon was purchased by Ocean Spray. They believed that the wise elders of Ocean Spray would take upstart Nectars to the next level and beyond. 

Instead, Nantucket Nectars languished under the tutelage of Ocean Spray's mentors, while Coke and Pepsi and other beverage giants strategized about how to compete for the all-important super cool, super healthy juice market. 

Ocean Spray denies it is strapped for cash. They deny that its bank is pressuring it to make substantial payments on its loan. Therefore, if and when Ocean Spray sells Nantucket Nectars, Stressline eagerly awaits the explanation as to why a juice company which touts itself as "world class" would sell a subsidiary with such growth potential as Nantucket Nectars. 


Mixed messages:

"We think the brand name can play where our strong fruit equity plays," Papadellis* said. On agenda: 1) expanded distribution for single-serve products; 2) increased support/expansion for its Nantucket Nectars juice business. And OSC to spend some $30 million on advertising in the next 12 months. "That's up from almost nothing last year. We'll be using television, print and radio," said Papadellis. From: The Delany Report October 8, 2001

* Randy Papadellis, President of Ocean Spray Cranberries, is second in command under CEO Robert Hawthorne.


More on Nantucket Nectars in October Edition below


 

October Edition

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