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August 9 - 16, 1999

 

 

 

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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.


August:  1- 8, | 9-16

July articles: July 22-31, | July 15-21, | July 8 - 14,| July 1-7,

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