Cranberry
Stressline
Dates: Sept.
15-21, 1999
9/21/99 - Cranberry Marketing Committee: 1998
Crop year figures
9/20/99 Op-Ed from a processor: I wish to
propose an initiative for the Cranberry Stressline that might hopefully result in
influencing our industry to take notice (along with appropriate action) to rectify a
situation that is most harmful to our industry and indeed is a contributing factor to the
problems we presently face.....
9/16/99 Opinion - Heinz and Bestfoods
9/16/99 - Fresh Fruit price down $8 case from
last year
9/20/99 Tom Bullock reminds us that Ocean Spray
represents values like honesty and integrity.
9/20/99 Potential Ocean Spray
suitors:Quaker Announces Supply Chain Reconfiguration; Targets $60-$70 Million in Savings
in 2002 and Beyond
9/17/99 Ocean Spray hires Interim COO
9/17/99 Northland Cranberries: Swendrowski
addresses concerns, issues, in letter to Northland growers
Cranberry Marketing
Committee:
1998 Crop year figures
9/21/99 The
gap between production and sales widened again for the second year in a row. Ending
inventory was 1,070,473 barrels greater than in 1997. Between 1997 and
1998 sales were comparable, and production was only up from 5,957,262 to 6,162,699. For
the nine years between 1988 and 1996, production and sales kept apace with each other.
Ending inventories fluctuated between 771,487 (1990) and 1,383,406 (1992). In 1997
the ending inventory jumped to 2,037,441, from 1,221,319 in 1996. For the crop year ending
in 1998, the ending inventory was 3,107,366. See graph and figures
Editor's note: The following
Op-Ed letter was submitted by a processor of cranberry juice drinks. He has legitimate
reasons for keeping the identity of his company anonymous.
9/20/99 I wish to propose an initiative for the
Cranberry Stressline that might hopefully result in influencing our industry to take
notice (along with appropriate action) to rectify a situation that is most harmful to our
industry and indeed is a contributing factor to the problems we presently face. Your
web site has the attention of our industry and the trade that we deal with, but does it
have the clout to deal effectively with the kind of issue that I present in this letter?
It is my hope that I can raise awareness and a
sense of urgency, through you, to the growers and handlers of our industry regarding my
concern. I do believe that the Cranberry Stressline can be the vehicle to launch a
movement to correct a gross injustice that is being inflicted upon our industry. As a
processor of cranberry drinks, I want cranberry juice standards raised, not lowered.
I speak to the fact that the juice market includes many so-called cranberry juice drinks
that contain virtually no cranberry as an ingredient. CONTINUED
| Easy to print version
Heinz and Bestfoods
9/16/99 The merger discussions between Heinz and
Bestfoods, which have gone on for months, with most issues resolved, have broken off
according to a story in today's The Wall Street
Journal (link requires paid subscription). An unnamed Wall Street executive is quoted
in the article as saying "Putting two food companies together, where one is in one
category and one in another part of the grocery store, doesn't necessarily help...the
reason why big wholesale mergers haven't happened is that when you really get down to the
numbers, it's hard to get yourself over the hurdle of merging the whole portfolios. What helps is when they overlap on the same aisle."
A look at the juice aisle demonstrates
connectivity between Ocean Spray and several partners. An acquisition by Pepsi links the
cranberry blends with the orange blends of Tropicana. With Cadbury-Schweppes, cranberry
blends would complement Mott's apple juices. Weaker "synergy" (the current
buzzword) would exist with an acquisition by Procter and Gamble which owns Sunny Delight
or Quaker Oats which owns Gatorade.
Ocean Spray
Fresh Fruit price:
Fresh Fruit price down $8 case from last year
9/16/99 A memo dated 9/8/99 (click here) addressed to Ocean Spray Fresh Cranberry Brokers and National Accounts
from James Nolan, Ocean Spray's manager for domestic and international cranberry sales
states that:
"effective immediately, we quote the
following price on Ocean Spray fresh cranberries for the United States and Canada: $19.00
for 24/12 oz. poly bags and 20 lb. bulk, f.o.b. all shipping points. This price, which
represents an $8.00 per case decrease from our opening price last year, will be good on
all orders requested for arrival by October 30, 1999. In addition, we are giving a lid
price of $25.00 f.o.b. for November's shipments. A firm November price will be announced
in mid-October.
Shipping is expected to get underway the week of
September 20 from Massachusetts and Wisconsin and the week of September 27 from
Washington.
All requests for fruit are subject to Ocean
Spray's confirmation, availability of supplies, ability to ship and acts of God.
Terms: Net 21 days from date of invoice."
In the September edition of The Scoop, a
publication written primarily for in-house employees of Ocean Spray, sent to
grower/owners, and occasionally shared with the press, he steps onto the slippery slope of
the issue of free speech vs. company loyalty and tries to discourage debate on "the
Internet". He wants employees to confine their debate about critical business issues
to "department and facility meetings, in CEO Mailbox and during Office Hours." I
doubt if such an admonition would be made if outside debate was going on only in the
donut shop. CONTINUED | Easy to print version
Potential Ocean
Spray suitors:
Quaker Announces Supply Chain
Reconfiguration; Targets $60-$70 Million in Savings in 2002 and Beyond
9/20/99 CHICAGO - - /PRNewswire/ -- The Quaker Oats Company
(NYSE: OAT - news) announced today that it has begun a
three-year project to upgrade and optimize its manufacturing and distribution capabilities
in North America.
This program is expected to significantly lower operating
costs by removing inefficient assets, building operating scale in key product lines, and
integrating Foods and Gatorade warehousing. The project involves a rationalization of U.S.
and Canadian food operations, an expansion of U.S. beverage manufacturing and a
reconfiguration of the Company's food and beverage logistics network. In total, these
actions could result in a total company headcount reduction of nearly 10 percent, or 1,200
jobs. Entire Press Release here
Ocean Spray hires Interim COO
Click left for
information updated 9/18/99
Story updated 9/17/99 - Ocean Spray has announced that Dean
A. Mefford has been hired as the interim chief operating officer to work immediately under
outgoing Ocean Spray President and CEO Tom Bullock. Mefford, 58, worked for thirty years
at Ralston where he advanced from management trainee to a series of top level
posts."Given some of the critical supply chain and marketing issues we now face, we
are fortunate to have someone of Dean's caliber and background to tighten our focus on the
work at hand," said Bullock in a press release.
"He has a proven track record of providing vision and leadership to grow existing
businesses, start new businesses and turn around under-performing businesses."
According to Ocean Spray, Mefford became President and CEO of
Viskase, then a subsidiary of Envirodyne, in September of 1994. He replaced F.E.
Gustafson, who remained as chairman of Viskase and executive vice president of Envirodyne
Industries, its Oak Brook-based parent. Viskase is a supplier of food packaging materials.
Gustafson went on to become President and CEO of the entire corporation, a position he
continues to hold.
Mefford came aboard following the filing of a Chapter 11 by
the parent company in 1993. (ed. note: I am not clear as to when Mefford left Viskase; but
he was there at least until 1997.)
Envirodyne Industries, Inc. changed its name to Viskase on,
Sept. 8, 1998. It is traded on the Nasdaq SmallCap market under the trading symbol
VCIC. Viskase is the world's leading supplier of cellulosic casings and a
major producer of specialty plastic films. These packaging products and solutions serve
the packaging needs for processed meats, fresh red meats, poultry, foodservice, cheese and
bakery sectors of the food industry.
In 1997 Enrivodyne suffered a downward spiral. It sold off a
number of its units, including Clear Shield National, Inc. to Solo Cup Co., for $140
million and its Sandusky Plastics subsidiary. The corporation was seeking a buyer, but had
a $524.1 million debt load. There was an attempted leveraged buyout by Heico Holdings,
Inc., which failed. A 1997 law suit resulted in an $11 million settlement against
D.P. Kelly & Associates and Salomon Brothers. It had been alleged by the plaintiff,
the Atra Group, that they had been deceived about the prospects of Environdyne. Donald P
Kelly and Salomon led the $840 mil buyout of Envirodyne, which later filed for bankruptcy.
Prior to the buyout, Artra had a 26.8% interest in Envirodyne.
In 1997, revenues dipped 6% to $612.9 million, while the loss
of $9.6 million, or 66 cents a share, represented only a slight improvement over the 1996
loss of $13.7 million, or 96 cents a share. They suffered a loss of $17.6 million,
compared with a year-earlier loss of $7.5 million. Sales in the first six months were down
16% to $105.4 million. The company also had to lay off 215 employees in its Chicago plant
in 1998.
In a 1996 trial in Chicago, a jury found that American
National had infringed on Viskase's patents for casings and
awarded $102.4 million in compensatory damages. Eventually on appeal in 1998, Viskase was
awarded damages from American National Can Co. of Chicago. In U.S. District Court in
Chicago, a jury found that American National's manufacture and sale of heat-shrinkable
film -- used for fresh meat, processed meat and poultry applications -- infringed Viskase's patents. The judgement was almost twice the stock value
of Viskase.
April 1999 Press Release on the
state of the company
Archived news articles about Viskase from Hoovers
S.E.C.
Filings (10K's are the most informative) for Envirodyne/Viskase
Northland Cranberries:
Swendrowski addresses concerns, issues, in
letter to Northland growers
9/17/99 In a letter to Northland Cranberries growers
(9/13/99), President and CEO John Swendrowski explains the erroneous reporting in the
media that led to a buzz around Boston as major news radio stations like WBZ reported that
Northland was considering the acquisition of Ocean Spray.
In the letter Swendrowski also elaborates on his opinion of
the benefits of an affiliation between Ocean Spray and Northland: "A combined entity
with the Ocean Spray, Northland, Seneca, Nantucket Nectars, Tree Sweet, Awake brands would
be a near $2,000,0000,000 exciting entity with significant earnings potential. It would be
a powerhouse on the juice aisle with tremendous opportunities to grow through acquisitions
or merger with other juice focused franchises worldwide."
On the issue of Ocean Spray being acquired by a larger
entity, vs. a merger with Northland, Swendrowski writes: "I do
not understand the discussions that a $1.4 billion sales company cannot compete in the
marketplace and therefore must be acquired by a bigger player. I believe that, because of
capital restraints, a $1.4 billion cooperative has difficulty competing and growing
profitably. I also believe that a cranberry grower will be best served by a company that
is cranberry focused, not a company that has a small part of its income from
cranberry."
He is critical of Ocean Spray as he predicts the following:
"do not be surprised if upcoming reports show an increase in Ocean Spray
"sales". Based on reports filtering in from around the country, Ocean Spray is
now giving away coupons for free 64-ounce bottles at checkouts. Since these coupons
will "ring" up at full price in industry data, I would assume that the next
industry report will indicate that Ocean Spray has increased its market share."
Read Northland Letter
| easy to print version
News link:
9/15/99 Carver Selectman to join in Makepeace Discussions, from the Patriot Ledger
9/15/99 The Ocean Spray public web site,
criticized here for being out of date (see below - article on 9/12/99), has now been
updated and has a new look. |
9/15/99 What better time to promote
or reintroduce Cran - Blueberry?* Read about the latest study on the health benefits
of blueberries here. |
*
The
Ocean Spray consumer web site notes, regarding Cran-Blueberry: "Very limited
availability. May be available as of March 10, 1997 in select areas in
the following states: AL, AZ, AR, CA, CO, FL, GA, HI, IL, IA, LA, MI, MN, MT, NE, NY, OH,
OK, OR, PA, TN, UT, WA, WI and throughout New England." |
.....
Back to Cranberry Stressline
Front Page
|