Cranberry Stressline

Archives

Nov. 9 - 21, 2000

11/21/00 Article on the health benefits of cranberries in The Dallas Morning News -- 11/20  Coke seen likely to win Quaker from Reuters and 11/19/00 From Pepsi to Coke for Quaker - read Quaker in buyout talks with Coke, from the AP on ABC.COM and The New York Times -- 11/16/00 Ocean Spray weighs berry harvest options in The Burlington County Times -- 11/15/00 Wisconsin grower to sell in China, press release here --  11/15/00 Boston Globe Monopoly in the Mass. Milk Biz.  --11/14/00 Wisconsin Rapids Daily Tribune Northland 27%

Excerpt: Ocean Spray Cranberries Inc., could be scooped up by one of the major soft drink makers.

From Reuters article entitled Beverage wars fought over much more than cola, 11/20/00 -- Analysts have said other drink makers, such as AriZona Beverage Co., Nantucket Nectars and Ocean Spray Cranberries Inc., could be scooped up by one of the major soft drink makers. AriZona, the biggest independent maker of functional beverages, makes tea drinks, Nantucket Nectars makes juices and teas, and Ocean Spray dominates the cranberry juice market. 

"I think Coke and Pepsi will take close looks at virtually every kind of nonalcoholic beverage that they think has growth potential," (John) Sicher* said. "Each company is determined to meet as broad a consumer demand for liquid consumption as they possibly can." Reuters article, 11/20/00
(you have to scroll down this page for complete article)

*Sicher is editor of Beverage Digest


Northland announces reformulation of cranberry juice blends

Increasing percentage in blends seen as best way to reduce surplus

Updated 11/17/00
Copy of new label

Read press
reaction here

11/13/00 Northland Cranberries has begun a campaign inviting consumers to compare the percentages of cranberry in the major brands of cranberry juice blends. In a press release the company notes that they have "launched a major cranberry juice blend reformulation today for its Northland brand 100% juice cranberry blends." They go on to say that "This strategic development is expected to set a new standard for the cranberry juice industry, as well as create increased interest in the health benefits of cranberry juice products." (Read press release here)

John Swendrowski told Stressline that increasing the percentage in blends will have a far greater impact on reducing the surplus than "clobbering the competition." "We are requesting that the CMC and the Cranberry Institute develop a seal of approval that any producer could utilize on any product that contains at least 27 cranberry juice." He noted that industry wide 60% of the sales are of a cranberry juice blend. In a letter to Northland Growers dated 11/13/00 Swendroski writes: Doesn’t it make sense to boost the cranberry content of our products to help reduce inventories to normal levels? Based on projected future crops and current inventories, we need products that utilize cranberries. Fighting over current markets do nothing for grower profitability. Market share fights only serve juice company egos not grower profitability. Historically the industry developed low cranberry content products because there was a shortage of cranberries. We believe that given today’s supply of fruit, the time has come to educate the consumer and create demand for the cranberries that we all grow."

Their promotion touts that "Studies indicate that 27 percent cranberry juice content delivers health benefits. Only Northland gives you "The 27% Solution!"TM"   See chart here

The Northland Web Site went online at 11:00AM today with an announcement of the new campaign.

Northland has also released a study by their director of Technical Services, Steve Cockram (The Health Benefits of Cranberry Juice, click here)  to coincide with their promotion. They have planned a media tour including New York and Boston (11/28-12/1) as well as Los Angeles and San Francisco (12/4-12/8).

Bassuener China initiative makes news

The Chinese buyers attending the trade shows initially seemed puzzled by cranberries, Bassuener said. "They were really hesitant to even taste it," he said. But once they tried it, Bassuener said, they liked it.

11/21/00 Wisconsin's number one newspaper, the Milwaukee Journal Sentinel, led with an article about Bassuneer Cranberries in today's online edition's business section. According to industry experts quoted in the article, Bassuener will be the first cranberry company to market in China. Read article here. -- Article in Wisconsin Rapids Daily Tribune


Editorial

A few thoughts on the 27% solution

11/17/00 One of the keys to turning around the cranberry crisis is the promotion of the health benefits of cranberries. Ocean Spray began a campaign to increase public awareness a few weeks ago, and now Northland Cranberries is engaged in a similar effort - with one crucial difference. 

Ocean Spray cannot legitimately use any of its blends in advertising that suggests medical studies have proven that cranberries have specific health benefits beyond those of other fruits. The studies that used juice have all used a 27% cranberry product. Northland has made the common sense decision to switch all of its blends to a 27% cranberry formula. 

In competing with Ocean Spray for market share, this should give Northland an advantage until the cooperative can put its own 27% cranberry blends on the shelves. If Ocean Spray isn't prepared to move expeditiously on this, it is a negative reflection on Robert Hawthorne and his management team. Considering the fact that Hawthorne has made no secret of his desire to compete aggressively for red drink market share, he should have been prepared to bring out a 27% cranberry blend line if a competitor did so first. Continued | No images (loads faster)


Op-Ed

On a cranberry marketing order for 2001

by John Decas

The campaign for a marketing program for the 2001 crop has officially begun. Mr. Sherwood Johnson, Chairman of the Board of Ocean Spray, along with Mr. Robert Hawthorne, CEO, in a letter to the Ocean Spray growers stated that the Board of Directors "… is convinced that another volume regulation through the USDA Cranberry Marketing Order will be necessary in 2001…" Mr. Hawthorne, at a grower meeting in Massachusetts, indicated that a 35% allotment is the specific regulation he will seek.

In the same Johnson-Hawthorne letter, they stated that those (Independents) who oppose volume regulations do so "… for their own selfish advantage…"

I can’t quite figure out how insulting a segment of the industry whose support they will need makes any sense.

If they expect to be taken seriously, they had better start mending fences quickly. They should first take a critical look at the allotment approach which we have just experienced and determine (A) Did it achieve the stated goal? (B) Do the growers support another year of the same? (C) Was it worth the money it took to manage the program? and (D) Was it applied equitably to all handlers and growers?

I suggest that the answer to all four questions is an emphatic NO. If Ocean Spray truly wants to engage our industry in discussions that might lead to some agreement on this matter, they might begin by supporting the proposed amendment to the Marketing Order as submitted by Pappas, Cliffstar, Decas and Hiller. This amendment gives the Cranberry Marketing Committee an additional option to consider. While I can’t predict whether this option would be utilized by the Marketing Committee if available, I do predict that this industry is not prepared to repeat the grotesque exercise of the allotment program that we were subjected to this year. Rob and Buddy stand alone on this one.

As much as I oppose a federally imposed dumping program of any kind, I would be willing to meet and listen to any proposition recommended by Mr. Hawthorne or anyone else. Continued

 

Editorial

Slotting fees: business as usual or bribes and extortion?

The article "Slotting fees threaten produce industry, groups tell Congress" in
 The Produce News, Sept. 25, 2000,  and industry sources were used in preparing this article.

11/10/00 Getting produce, and other products including cranberry juice, on the supermarket shelves isn't as simple as just offering the supermarket chain a competitive wholesale price and a product attractive to consumers. Common practice in the trade for supermarket chains requires a "slotting fee" for allowing a company to expand shelf space, have preferred shelf placement, or even sell their brand in the store. A reasonable justification can be offered for this, and for additional charges, for end of aisle and special displays. However, there's a point at which up-front fees for preferential display and shelf space becomes a de facto payment to compete in a way that is profitable for the food company. If they don't pay, their product could be relegated to a bottom shelf with very slow moving items.

A food company can try to convince supermarket executives to agree to arrangements to carry only their product plus the profitable house brand, with or without advance payments; but some up-front payment would seem to be in keeping with the usual practices even if a good case could be made for end-result profitability for the store. There's nothing in the law to stop a company from making exclusive deals with a supermarket chain, even though such arrangements work to the disadvantage of the consumers who want a wide choice of brands in each category. Continued


 

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