Tropicana vs. Minute Maid, a skirmish in the Pepsi-Coke War
"Make a product that can
be shipped worldwide, make people aware of your brand and drive demand
for it through advertising."
8/16/99 Ocean Spray's former Chief Operating
Officer, Kevin Murphy, gave this advice to Pepsi and Coke: "You're not going to be
able to sell orange juice like you sell Pepsi -- price it low and stack it high," in
a May, 1999 New York Times article. The juice business represents only $3
billion a year to Pepsico and Coca-Cola. Some experts consider the market stagnant. Others
see it as an opportunity for growth. Obviously, both Pepsi with its Tropicana purchase,
and Coke with Minute Maid are committed to marketing healthy alternatives to soda. It may
be only a $3 billion skirmish in the Soda Wars, but it is being fought in the juice aisle
where Ocean Spray and the independents must compete successfully for the cranberry
industry to survive. Read the article here (you can subscribe to the New York Times Online for free)
Cooperatives need not comply?
SEC clarifies reporting rules
8/15/99 Ocean Spray and other cooperatives
adhere to many standards for reporting financial data and other company business to
shareholders that are voluntary. Corporations, regulated by the Securities and Exchange
Commission, must report detailed information which is readily available to
shareholders, the press and the public. These standards just got tougher. Basically, the
clarification just issued (see below and inside) tells financial officers and auditors
that when they consider some information too insignificant to report, report it anyway.
The (SEC) staff has become increasingly concerned with the tendency of
some registrants, with the acquiescence of the auditors of their financial statements, to
manage earnings by designating certain transactions or events below a certain percentage
threshold as "immaterial" and then accounting for those transactions and events
in a manner that may not conform with generally accepted accounting principles
("GAAP").
Last fall, SEC Chairman Arthur Levitt gave a speech entitled The
"Numbers Game" in which he noted that the concept of materiality serves an
important purpose by recognizing that some items may be so insignificant that they are not
worth measuring and reporting with exact precision. He then stated:
"But some companies misuse the concept of materiality. They intentionally record
errors within a defined percentage ceiling. They then try to excuse that fib by arguing
that the effect on the bottom line is too small to matter. If that's the case, why do they
work so hard to create these errors? Maybe because the effect can matter, especially if it
picks up that last penny of the consensus estimate. When either management or the outside
auditors are questioned about these clear violations of GAAP, they answer sheepishly ....
'It doesn't matter. It's immaterial.'
"In markets where missing an earnings projection by a penny can
result in a loss of millions of dollars in market capitalization, I have a hard time
accepting that some of these so-called non-events simply don't matter.
"... I have asked the SEC staff to focus on this problem and publish
guidance that emphasizes the need to consider qualitative, not just quantitative factors
of earnings. Materiality is not a bright line cutoff of three or five percent. It requires
consideration of all relevant factors that could impact an investor's decision." Read entire SEC Press release inside
8/14/99 More on Pepsi in Motley Fool (part
1) , and Part 2 which
is providing extensive coverage of both Coke and Pepsi - and how Coke's mistakes (and
mishaps) combined with Pepsi's apparent Golden Touch, could threaten Coke's position as
the Zeus of the soda gods. They ask the question: where is Pepsi going in the future. No
mention of Ocean Spray - yet.
Keeping track of Pepsi:
Tropicana Taps Pezrow As Its Northeast Broker
BRADENTON, Fla., Aug. 12 /PRNewswire/ -- Tropicana Products, Inc., America's
leading juice company and a division of PepsiCo, Inc., has named Pezrow Companies, Inc. as
its sales and marketing partner for its Northeastern sales region. The appointment is
effective August 13.
Pezrow, based in Ramsey, N.J., will be responsible for executing the trade
strategy for Tropicana's grocery business and will sell Tropicana Pure Premium, the
top-selling supermarket brand in metro New York and the Northeast. Pezrow will also handle
Tropicana Twister juice drinks, Dole juices and Tropicana Season's Best juices.
``The selection of a new broker for the Northeast is a very important assignment
for Tropicana. In New York, the world's most highly developed orange juice market,
Tropicana Pure Premium in 64-ounce cartons is the number- one selling item in
supermarkets,'' said Terry Schulke, vice president of grocery sales for Tropicana.
``Pezrow will be instrumental in working with Tropicana and our retail partners to help
build juice category sales and profits.''
Pezrow will handle sales from Richmond north through New England, and west to
upstate New York and central Pennsylvania. Each year, Tropicana sells more than 100
million gallons of juices in the region.
``Our commitment is to strategically align with Tropicana and our retail
customers to take this powerful brand to a new level,'' said Michael Geary, chief
operating officer for Pezrow.
Tropicana Products, Inc., a division of PepsiCo, Inc., is the world's leading
producer and marketer of branded fruit juices. Based in Bradenton, Florida, Tropicana
markets its products in the U.S. under a number of brand names, including: Tropicana Pure
Premium Original, Grovestand and HomeStyle juices; Tropicana Pure Premium Calcium &
Extra Vitamin C, and Double Vitamin C with Vitamin E nutritionally enhanced juices; Dole
juices and juice blends; Tropicana Season's Best and Pure Tropics juices; and Tropicana
Twister juice beverages. The Dole brand name is licensed from Dole Food Company, Inc.
SOURCE: Company Press Release - Tropicana Products, Inc. |
Milk takes
on Juice:
But calcium added cranberry beverages may benefit
8/16/99 "Instead of drinking milk during
some of the prime bone-building years, kids are choosing less nutritious, calorie-loaded
beverages like soft drinks and fruit-flavored drinks,'' said Marianne Neifert, MD (``Dr.
Mom''), a pediatrician and a mother of five who always made sure milk was a part of her
children's daily routine." from How to make the grade in the battle of the
beverages, a milk industry press release published today and available here on Stressline. The milk industry is aiming
its current advertising at "Mom", touting the benefits of children using
"their milk money" to buy nutrient rich milk at school. Winning the battle
of the beverages is a lesson that begins at home with mom. "By making sure they have
a glass of milk with their cereal in the morning and encouraging them to choose milk for
lunch, moms are helping to boost their kids' calcium intake...''
In a way, any promotion of the need for calcium
to help build strong bones in children helps calcium added juice beverages as well. Milk
is traditionally associated with calcium. Now that more and more fruit beverage companies
are aggressively promoting their added calcium, the public will get the message that this
vital nutrient can be consumed in many different forms and flavors. The milk ads can
educate "Moms" about their children's need for calcium, and all the cranberry
industry needs to do is remind them about calcium fortified cranberry beverages.
How often is the admonition "drink your
milk" heard in families across America? Children love juice and rarely have to be
urged to drink it.
The debate continues On the Forum
8/16/99 "Today is the first time I decided
to read from this "forum" and it is very discouraging. I am not a grower, I am
not a 20 year employee, I am just another "worker bee" getting up every morning
and doing my best to succeed and help the cooperative succeed. Maybe I'm stupid and should
pack up my bags sell something else. It sure is difficult trying to sell, promote and
merchandise a product for a people who hate each other, hate the company and probably hate
me..." Continued on the Forum
Ocean Spray Advertising
8/14/99 Sweepstakes fanatics who read the
web site IWannaWin at
www.sweepstastic.com will learn that there
are two ways to win a 1999 VW Beetle? Consumers can buy the Ocean Spray juices with
"Win a Beetle" on the label, or can send a stamped self addressed envelop to
Ocean Spray Picky Picky Official Game Piece, PO Box 7749, Melville, NY 11775-7749
8/13/99 Stressline doesn't always catch the news as quickly as we
would like, but better late than never, here are some of the Ocean Spray print ads from
the Devine-Pearson Web site.
Click on each ad for a good enlargement.
On another note, end of aisle displays across
from the check-out lines for CJC, Cran-apple and Cran-raspberry are now in supermarkets in
the heart of Massachusetts cranberry country. Spotters still report to Stressline that it
is difficult to find a large selection of single serve Ocean Spray juices in Massachusetts
convenience stores. At Cumberland Farms, both Ocean Spray and Veryfine have 20 cents off
coupons posted on cooler doors, but the Ocean Spray single serves are selling for $1.09
while the Veryfine are $1.19.
Much needed humor:
Grandpa's Changes
Independently Speaking by Brent Olson
8/12/99 Our family got together this weekend and
during the course of the day, my grandfather, my mother's father, was brought into the
conversation. He's been dead now for almost thirty years, which is plenty of time for the
world to change. Continued
Snapple and SoBe sales up,
Snapple dominates market share
in Premium Non-Carb Beverages for three months ending June 12. Ocean
Spray down 2.9%
8/10/99 According to an article in Beverage Digest,
Snapple and SoBe dominated the premium noncarbonated hot-fill segment of the beverage
market in the 12 week period ending June 12, 1999. Snapple had a 40.5 share with sales up
3.7%, and relative newcomer SoBe had a 9.3 share with sales up a very respectable +6.9.
Ocean Spray with a 14.7 share saw sales drop -2.9, and Nantucket Nectars with 1.4 share
was essentially stable with only a -0.1 drop.
Snapple, a poor performer when owned by Quaker Oats,
is now owned by Triarc, which also owns Mystic. Mystic with a 5 share was down -3.2.
Also included in this category are Pepsi Lipton (-1.3), Coke Nestea (-.09) and
Arizona (-2.3). How did Triarc's Snapple do it? Read the
article here.
Cranberries Magazine online now includes selected articles,
summary of new issue
Includes full text of Interview with Ocean Spray Chairman Don
Hatton and reviews of Cranberry Stressline and Ocean Spray ExtraNet
8/9/99 Cranberries Magazine was established in 1936 and is
currently edited and published by Carolyn Gilmore of Rochester, Massachusetts. Virtually
everyone in the cranberry industry subscribes to Cranberries. The magazine has had a
website, www.cranberriesmagazine.com for
several years. Now, for the first time, it includes not only brief summaries of articles
in the current issue, but several articles published online in their entirety. |