Ocean
Spray on Standard & Poors Credit Watch
9/30/99 Citing "uncertainties pertaining to Ocean
Spray's long-term strategic direction and ongoing business challenges in its core
cranberry operations," Standard & Poors announced today that Ocean Spray is on
"Credit Watch with developing implications" for its single-A long term corporate
credit and senior debt ratings, triple-B-preferred stock rating, and A-1 short-term
corporate credit and commercial paper ratings. Should Ocean Spray be acquired by a
higher rated corporation that assumed the rated obligations, the rating could be raised.
If Ocean Spray was purchased by a lower rated company, the rating could be lowered.
S&P notes that if the Ocean Spray market share continues to lose market share, the
ratings could deteriorate further.
Media:
Feature story on T.V. news
9//29/99 New England Cable News broadcast a
feature story last night on Ocean Spray and the cranberry crisis. Reporter Mont Fennel
interviews and Massachusetts grower Al Robichaud, Ocean Spray CEO Tom Bullock. There is a
brief comment from David Farrimond of the Cranberry Marketing Committee. 9/30/99 To see
the video go to Archives and enter "cranberry" -- NEW ENGLAND CABLE NEWS.
Company Press Release
Harvest Sets Stage for
Marketing Efforts; Ocean Spray Optimistic Despite Challenging Year
9/28/99 LAKEVILLE-MIDDLEBORO, Mass. As the cranberry harvest
gets into full swing, there's no doubt another bumper crop is in store for the cranberry
industry. The tart berries will be showing up everywhere in the year 2000, and that's good
news for consumers.
Market leader Ocean Spray says consumers can expect a hearty
supply of cranberry products for the holiday season while the record crop is spurring the
Massachusetts-based cooperative to reenergize new product development efforts and
aggressively promote cranberry offerings year-round. CONTINUED | Easy
to print version
Media:
Widespread economic impact of lower
prices reported
9/26/99 The Brockton Sunday Enterprise, a
newspaper with a large circulation in southeastern Massachusetts, devoted most of its
front page (Picture) to a story about the huge impact of
lower cranberry prices on the region's economy. Unfortunately, the Brockton Enterprise is
not online.
The important article was marred, however, by
the misrepresentation of a matter vital to the cranberry industry. Under the heading
"Merger possibility announced" the article says that Ocean Spray hired Bain and
Company "to look into the possibility of a joint venture with Wisconsin based
Northland Cranberries, Inc." As those following the cranberry crisis know, Bain was
retained to help Ocean Spray explore all options. The article went on to state that A.D.
Makepeace sent a letter to Ocean Spray grower/owners saying a merger should be given top
consideration, and that Ocean Spray had not had any formal discussions. Both the Makepeace
letter and the Ocean Spray comments had to do with the possibility of a strategic merger
with a larger entity, and had nothing to do with Northland Cranberries.
Boston television airs interviews with
Bullock, local growers
click to enlarge
9/24/99 Boston's' WBZ television broadcast a
story on the cranberry crisis on the 6:00 P.M. news. Ocean Spray CEO Tom Bullock, and
Ocean Spray grower owners Peter Beaton and Betty Brown were interviewed. Read excerpts,
including all quotes here | and view pictures here.
Old Colony Memorial, Providence Journal
Coming Sunday - Brockton Enterprise
9/24/99 The weekly Old Colony Memorial
(Plymouth, MA.) published part one of a two part story entitled "Sour taste: tough
times for cranberry growers" by Scott Smith on 9/23/99 - Picture. The focus was on the plight of growers and those
associated with the cranberry industry. Part two, already being printed, will cover
marketing issues. The newspaper article is not online.
The Providence (R.I.) Journal published two articles in its
Business section on 9/23/99."For growers, it's the bottom of the barrel" is a
story derived from the New York Times article below, and "Caught in a squeeze: Ocean
Spray finds it's ripe for picking - Several companies have offered to buy the troubled
cranberry cooperative, a deal some analysts say could be worth $1 billion" is
attributed to the Boston Globe and Bloomberg News. As Stressline readers are aware. no
verification of any buyout offers have been published.
New York Times, Wall Street Journal,
Cape Cod Times, publish stories on Ocean Spray
All published on the same day
by Hal Brown
9/22/99 New York Times'
business reporter, Connie Hays, a thirteen year veteran of the New York Times whose recent
assignments have included covering Coke and Pepsi, visited Massachusetts last week and
interviewed, among others, Ocean Spray CEO Tom Bullock, Sr. V.P. Nancy MacDermott, as well
as critics of Ocean Spray management Tom Gelsthorpe, and this reporter's wife, Betty
Brown.
The in depth article by Connie Hays,
"Low cranberry prices shake farmer's faith in Ocean Spray" includes quotes from
Tom Bullock who was interviewed at the cooperative's headquarters in Lakeville, Mass.
Referring to the various problems facing Ocean Spray he says "part of it is the
surplus, and part of it is the competitive activity. People are unhappy," referring
to grower/owners, "these are good, solid, hard-working farmers, and this is their
paycheck. They'll remain unhappy until this turns around. We're doing a lot of things, but
it's going to take a while." The Times reports that Bullock is in charge of choosing
his own successor and has an agreement to stay on for a year to insure a smooth
transition.
Regarding his retirement, he stated "I think it's time
for a change, and that's what they'll have -- a change." The Times notes that
"Bullock announced his retirement only a day after an advisory committee of growers
expressed no confidence in management, although the company said that was not a factor in
Bullock's decision."
Industry analysts are also quoted:
"This company was a trendsetter, what happened was they
didn't keep evolving." Michael Bellas, chief executive of Beverage Marketing.
"It does appear that the whole board-management
interaction the last few years has been somewhat dysfunctional," Rex Green, a
managing director at Advest in Boston.
"Someone like Kraft or Coke or Triarc is going to come
along and seduce them, and then someone they can't control will be controlling them. The
Ocean Spray brand would become just another brand in some company's big-brand
portfolio." Unnamed industry analyst
"Northland is what people now point to and say, that was
the beginning of the Bataan Death March. People are saying now, under no circumstances
should they have let the Northland growers leave the co-op." An unnamed consultant.
Others quoted in the article are: Wisconsin
Ocean Spray Board member Paul Jonjak;David Farrimond of the Cranberry Marketing Committee;
John Swendrowski, President of Northland Cranberries; Robert Rosbe, Treasurer of A.D.
Makepeace; and Mary Brazeau Brown, an Ocean Spray grower in Wisconsin.
NY Times article has been archived, available for a fee
The Wall Street Journal story,
"Ocean Spray Hires Merrill Lynch To Study Strategic Alternatives" provides
little new information to readers of Stressline. The newspaper of record for the
investment community does, however, call Ocean Spray a "financially failing
company". It confirms that industry insiders consider Pepsi and Cadbury Schweppes as
being "top contenders" to purchase Ocean Spray, and that the company has hired
Merrill Lynch to assist in exploring strategic options. The story includes the following
speculation: "Ocean Spray, which is facing stiff
competition amid falling cranberry prices, could be valued at about $1 billion, according
to industry officials." Insiders report that the article was put together in about a
day after the Wall Street Journal learned that the New York Times was about to publish
their story.
To read the story online in the Wall Street
Journal you need a paid subscription: here
The Cape Cod Times published
"Bogging down - Cranberry growers take aim at Ocean Spray as their
livelihoods become threatened " The article, which was several weeks in preparation, includes
interviews with John Decas of Decas Cranberries; Ocean Spray CEO Tom Bullock; Ocean
Spray Board member Chip Morse; Brian Taber, public relations manager of Northland
Cranberries; David Farrimond, Executive Director of the USDA Cranberry Marketing
Committee; industry analyst George Dahlman of U.S. Bank Corp Piper Jaffray; Cape Cod
cranberry growers Carver Crowell, Linc Thatcher, Kevin Archambault and Tom Grew. It also
includes an interview with Marston Mills grower Dave McCarthy, who left Ocean Spray in
1995 expecting to redeem his stock only to suffer what he terms "a breach of
faith" when Ocean Spray suspended payments. This is an important article about
the problems at Ocean Spray and in the cranberry industry. Cape Cod Times
MOODY'S PLACES COMMERCIAL PAPER AND PREFERRED
STOCK RATINGS OF OCEAN SPRAY UNDER REVIEW FOR POSSIBLE DOWNGRADE
Approximately $200 million in securities affected.
9/22/99 Citing the deterioration of the
cooperative's operating performance and uncertainty regarding the company's future
business configuration Moody's Investment Services has placed the commercial paper and
stock ratings of the cooperative under review. "The review will assess the continuing
impact of falling product prices, rising competition, and management instability on Ocean
Spray's operations and financial profile, and whether or not there is likely to be any
significant improvement in debt protection measures over the near to intermediate term.
The review will also focus on the strategic options that Ocean Spray is considering."
Read entire Moody's
report here |
In the Forum:
Look in the mirror
Thursday, 30-Sep-1999 10:07 AM
One of the first things we need to do is STOP laundering our
(Ocean Spray) problems for the world (especially our direct competitors) to see on this
site. Do the New England Patriots or Green Bay Packers send their "gameplan" to
the opposition every week? Do you find Pepsi, Coke, P&G, Northland, Motts, Welchs,
Cadbury beat up their own initiatives, strategies, tactics etc on the web for us to pick
apart and laugh at? If so, where can we find it? Of course Hal Brown would like you (and
everyone else) to ignore this posting, since this "board" is his claim to
fame... and all it really has turned into, is a gossip column primarily talking about OS
problems, concerns, short comings etc... Think about it... If I were Northland, Decas,
etc, I would "hit" this board daily just to laugh at the ignorance (several
employees and or owners) show, by publicly broadcasting/sharing our faults... We looked
for the enemies...and guess what? They're in the mirror! Hey Mr. B., Mr. G. and Ms
R. now its your turn to say that I'm opposed to "open communication and free
speech" and that the reason we are having problems is because of people like me... Unsigned
-- READ RESPONSES
Ocean Spray
trade release:
New bottle, Moody's rating
9/28/99 In an release to the trade Ocean Spray
announced the introduction of a new bottle due in the first quarter of the new year, and
addressed the ramifications of the Moody's Investment Service report. Read release HERE.
Russia proposal of concern to cranberry
growers, Decas calls helping Russians to build bogs "absolute madness"
9/26/99 The Taunton Gazette reports that a
Massachusetts state senator, Marc Pacheco, who has generally been known for his support of
cranberry growers, has gone to Russia for the second time to meet with cranberry growers
there. His intention is to promote a "win-win situation" for Massachusetts
growers as they partner with Russians to market Russian and American cranberries in
Europe. However, his initiative is being criticized by John Decas of Decas Cranberries who
says:
"I think it is an ill-advised initiative on
(Pacheco's) part. He is not fully aware of our problems. But to think there's something positive in teaching others how to compete
with us ... just doesn't make any sense. If it's promoting cranberries in Europe as a
product, that's one thing, but to go (to Russia), build bogs and introduce a product
that's already in oversupply, that makes no sense. ... It's just absolute madness."
"Why should we help them and create competition for
ourselves? I don't mind competition, but I'm not going to subsidize it. As long as we are
capable of fulfilling the marketplace abroad, why get help from elsewhere?"
Read
entire story here
Another story, in the Taunton Gazette
Possibility of Makepeace land
development interests state and town officials
9/26/99 The rural town of Carver, MA. is only
10% developed. A.D. Makepeace owns 12% of the undeveloped land. The company owns 10,000
developable acres in the "gateway to Cape Cod" towns of Plymouth, Carver and
Wareham, with 5,600 acres just ten minutes from the Bourne Bridge to Cape Cod. If,
when, and how this land is developed will effect both the towns on the route to Cape Cod,
and the Cape itself. With the commuter train now operating between Boston and Middleboro,
before long the cranberry growers in the southeastern corner of Massachusetts will
find them farming a major crop in suburbia. But the state plans to buy some 200,000 acres
statewide in the next decade to preserve open space. There's a possibility they might buy
some of the Makepeace property.
From an article in the Cape Cod Times:
State environmental officials have taken notice.
Already focused on Southeastern Massachusetts as the state's next "growth
frontier," they hope to broker a plan that preserves as much undeveloped land as
possible. That could include purchasing a portion of the Makepeace property.
"Pieces of land this big don't come up too often," Secretary of Environmental
Affairs Robert Durand said.
The project will put to the test fashionable concepts like sustainable development, smart
growth and regional planning. Read article here
Free Speech on
the Internet
When companies sue Internet detractors
9/25/99 It was reported in yesterday's
Milwaukee Journal
Sentinel, that Universal Foods learned some hard lessons about free speech when it
decided, in 1998, to sue two former employees for posting negative messages on a
Yahoo message board. As the legal process progressed the media learned of the story. Then
the Milwaukee Business Journal decided to publish an article and Universal tried to
block it's publication in another law suit, citing irreparable harm to the company. This
only brought more media attention. The Business Journal carried a front page story and
noted that Universal was not the most pleasant place to work under it's Chairman and CEO.
One expert, Lawrence Soley, is quoted as saying
"The problem is companies have a tendency to overreact and really infringe on free
speech. I would advise caution, because I think there's a growing backlash against
companies trying to curb speech rights. These are the types of comments that are made
during lunch breaks and after work at a bar. It's just that it's a little more
visible" Read the article HERE.
by Linda Rinta
Read a well thought out, albeit anonymous, rebuttal to this Op-Ed HERE.
9/24/99 We all know to judge our leaders not by
what they say but what they do. Now let's separate what our leaders do from what they say.
They say that we need new leadership but they keep Bullock in place, not only for the
present but also into the future as hirer, trainer and consultant. They say that their
goal is to raise the return to stock holders but they post a payment schedule that will
doom Ocean Spray growers, alone, to loan ineligibility and dump our fruit onto the market
at below cost prices. They say they want to help us realize the value of our investment
and yet effectively undervalue our assets, drive up our debt. They vote to stop the
redemption of stock while board members themselves try to purchase that same stock at
bargain prices. They say that we should educate ourselves and they will keep us informed
and yet they can't or won't answer critical questions, withhold information, and
discourage us from "confusing" ourselves by reading outside articles. They say
that they intend to take back market share and yet they cannot fill orders and deliver
products. They say that the problem is over supply, and they take in 500 more acres. They
say they are working very hard to bring about change but the only change they brought
about is a downward plunge for their members.
Board Accomplishments:
The Ocean Spray crop does not cash flow.
(Independent crop still cash flows.) They have lost or abandoned the single serve market.
They have driven the market price for fresh fruit, which there is never enough of, into
the bargain basement and dumped products into the market at below cost, continued to anger
their customers and lose market share. They have devaluated our property and the value of
our stock. They have broken faith with their stockholders. And, they hold fast to these
accomplishments.
Not to be confused by what they say, what can be the motivation for what they've done?
What is the motivation for what they continue to do? Someone in this picture has an agenda
because nobody is this stupid! (You can respond to this Op-Ed on the Forum)
Read a well thought out, albeit anonymous,
rebuttal to this Op-Ed HERE.
Tom Bullock must be fired
9/23/99 For a company that hadn't made the news
for one specific event, Ocean Spray received more media attention yesterday on one day
than any company in recent memory. It was the subject of well researched newspaper
stories in the NY Times, the Wall Street Journal, and
the Cape Cod
Times. All three were in depth analyses compiled by a group of experienced business
reporters that took considerable time to prepare. To say that these three articles, plus
the critical Moody's Investment
Services report released the day before, put the company in a bad light is an
understatement.
The sobering, if not chilling, suggestion by the
Wall Street Journal that Ocean Spray's value is a mere $1 billion should be enough of a
wake up call to the Board of Directors that more decisive action is needed than merely
energizing and refocusing the company during a year-long transition period from management
under Tom Bullock's regime to management under a new CEO that Bullock himself will be in
charge of selecting.
If Ocean Spray aspires to be a world class
company, the Board must assure that it handles mismanagement like other world class
companies. Not having someone, like the Chairman of the Board, to step in immediately as
interim CEO may have led the Board to act indecisively. But, regardless of why he is still
in charge, now is the time for damage control.
Ocean Spray is a great company led to the brink
of bankruptcy; but not by a surplus and competition, made worse by
few minor problems (the failure of Wellfleet farms and a troublesome computer system were
not minor problems) as Bullock contends. It is where it is today because of Mr. Bullock
himself.
Despite the fact that Tom Bullock has announced
his retirement, he can, and must, be fired.
Print editorial
Web sites:
BevNet reprints Stressline article
9/23/99 BevNet, the web site noted for its reviews and ratings of
beverages, has reprinted the Cranberry Stressline article "New
York Times, Wall Street Journal, Cape Cod Times, publish stories on Ocean Spray."
BevNet is the only web site that attempts to
give objective taste ratings to a wide variety of beverages including those from both
small and large companies. It has been known to give ratings from A+ to F to different
juices from the same company.
Sometimes its ratings can be instructive for
those analyzing the beverage industry, other times they cause puzzlement as to why highly
rated beverages disappear from the marketplace. How many people remember Ocean Spray's
Wild Ciders? Like most Nantucket Nectars, they received excellent taste ratings from
BevNet. Yet Ocean Spray gave up on Wild Ciders and purchased Nantucket Nectars instead. |