A
Call To Action!
- The Future
by "business person"
and
Nabiel Shawa's response
Editor's note: "Business person" is a regular poster on the
Forum and for reasons I believe are legitimate, chooses to remain anonymous.
11/20/99 - 11/22/99 Emotions are running high. Grower/Owners
continue to feel they are in the dark about the facts required to make an intelligent
decision for the future of their company. It certainly appears that change is not coming
as quickly as many feel it should. In light of all that, I would like to comment on Mr.
Shawa's call to action* and to provide something for Grower/Owners to think about.
I feel some of the most intelligent postings have been placed by Nabiel Shawa during the
past few months. I do not agree with his solution of selling the cooperative, but that is
just a difference of opinion. He may be right, or I may be right that a merger with other
fruit cooperatives is a better strategy than selling all or part of OSC, only time will
tell. CONTINUED | Easy to print version
Nabiel Shawa's response - I would agree that
Business Person’s comments are reasonable and insightful. We seem to agree on many
points however I respectfully disagree on seeking Welchs and Tree Top as the best merger
candidates. Assuming you are a fellow Grower/Owner, what is your most dire need and that
of our company? In one word, I believe the answer is Capital (followed closely by
competence and stability). CONTINUED
| Easy to print version
* Editor's note: You can read and/or print the dicusssion
thread Nabiel Shawa began on Friday, Nov. 19th, with 28 responses, all on one page here.
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Ocean Spray
shareholder revolt brewing:
decision by board prompts "call to action"
11/19/99 "Our Board of Directors has spit
in the face of us stockholders," according to Long Beach, Washington grower/owner
Nabiel Shawa. Oregon grower/owner Cheré Winters and others posting on the Cranberry
Stressline Forum are calling for an immediate special meeting and a recall vote of the
Board, replacing them with a smaller board committed to selling the cooperative. Winters
writes:
"The board members responsible for this
decision should be recalled. How many more consulting fees do they expect us to pay for,
with no results? We should all demand to see the Bain report. The uncensored version.
Knowledge is power...maybe that's why we are kept in the dark as much as possible."
Stressline has learned that decisive action is
likely to begin within the next week. Reliable sources indicate that the result of the
Board's vote was not unexpected. The sale of the cooperative which, as nomination
elections suggest, is supported by a large majority of shareholders, will not be pursued
with this sitting Board. The next step is calling a special meeting and recalling the
Board, to replace them with a Board favoring a sale or merger.
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Ocean Spray
Press Release:
Riding Wave of Marketplace Momentum, Ocean
Spray Rejects Potential Transaction
LAKEVILLE, Mass., Nov. 19 /PRNewswire/ -- Riding a wave of
renewed popularity in its brand, Ocean Spray Cranberries, Inc. has decided not to pursue
the idea of selling all or part of its company in favor of building a stronger
grower-owned organization to better compete in a world of food and beverage giants.
``Over the last 70 years, we have created an incredible brand
and category that stands for health and refreshment,'' said chairman Don Hatton. ``We
believe we can continue growing our brand and ensuring the financial health of our
grower-owners by revitalizing the organization.''
The 25-member Board of Directors, which represents the
company's 900 grower-owners, voted to remain a cooperative after reviewing the findings of
a six-month business analysis that involved the Board, management and outside advisors,
Merrill Lynch and Bain & Co.
Ocean Spray commands an industry-leading 50 percent share of
the cranberry juice category and is often credited with creating the grocery juice aisle.
But poor grower returns caused by record surpluses and slippage in Ocean Spray's market
share have created intense pressure on the Board and management to improve grower-owner
profitability.
Ocean Spray's marketing plans have begun to yield success
with volume trends up sharply for 20 consecutive weeks. This success is building on the
strength of two significant product launches: a new line of Premium 100% Juices and
Cranberry Juice Cocktail PLUS, both of which contain 130 percent of the recommended
dietary allowance (RDA) of vitamin C. Cranberry Juice Cocktail PLUS also contains calcium
and vitamins A and E. While these changes will not impact owner profitability in the
short-term, they have created renewed confidence among employees and shareholders.
``The food and beverage industry is experiencing intense
consolidation, but our analysis convinced us that Ocean Spray can compete in this industry
if we make the necessary changes,'' said Hatton. ``Our grower-owners take great pride in
owning this company and want to continue controlling their destiny,'' he said.
The Board currently is in the final stages of a search for a
new Chief Executive Officer and will form a Strategic Committee to advise the new CEO
regarding future business plans to improve financial health for growers and realize the
untapped value of the Ocean Spray brand.
Ocean Spray is an agricultural cooperative owned by 750
cranberry growers and 150 citrus growers throughout the United States and Canada. Ocean
Spray has been the best-selling brand name in the canned and bottled-juice category since
1981, with sales of $1.48 billion in 1998. Headquartered in Lakeville-Middleboro, Mass.,
Ocean Spray employs more than 2,000 people worldwide. For additional information about
Ocean Spray Cranberries, Inc. visit its web site at http://www.oceanspray.com
.
Easy to print version
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Readers react
to Ocean Spray Board vote
11/19/99 Ocean Spray Board members are
completing what has probably been the most significant Board meeting in the history of the
cooperative. With the results of the nomination election for new Board members signaling
that a large majority of shareholders were in favor of a merger or acquisition, and having
heard the reports from Bain and Merrill Lynch, the Board came to a decision on whether to
merge or sell the company, or to maintain its status as a cooperative. Their decision is
being discussed in the Cranberry
Stressline Forum.
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Media:
Fresh fruit promoted
11/16/99 An article in the Food Section of the
San Jose Mercury News suggests freezing cranberries during the holiday season to eat all
year. An advertising copywriter couldn't have said it better than than this: (the
cranberry) "emerges as the shining star of feasts and festivities. Within the past
few decades, the tart, red berry has forged its way to the top of the fashionable food
ladder. Once appearing primarily as quivering, jellied sauce in a can, the up-and-comer
now shines in every corner of the holiday table." Read
the article HERE.
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Excerpts
"New England Chronicle" Ocean
Spray story
"Is a mutiny in the offing?"
 11/13/99 New England's
number one news magazine television show, WCVB channel 5's Chronicle
aired a segment on the situation at Ocean Spray and in the cranberry industry on
Friday, November 12th at 7:30 P.M. "Harvest time in New England, but the living
isn't totally easy. The cranberry farmers in Ocean Spray are worried
about business bogging down. Is a mutiny in the offing?" Linda and Paul Rinta,
Betty and Hal Brown, John Decas, Stu Gallagher and Chris Phillips were
interviewed. Their comments can be read HERE with images | or HERE in easy to print, faster loading version without
images.
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WSJ
Will the next Ocean Spray CEO come from Pepsi?
11/9/99: Will Tom Bullock's successor come from
Pepsi? According to the Wall Street Journal, it's a possibility. "Individuals
familiar with the search see PepsiCo Inc. as a likely source for the new Ocean Spray chief, even though the two companies are
involved in litigation over Pepsi's 1998 purchase of Tropicana Products Inc., an Ocean Spray competitor." from the Wall Street Journal, The
Jungle/By Rachel Emma Silverman: Fruitful choices?
Pepsi has been frequently mentioned as a
corporation interested in buying Ocean Spray.
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|
Media
New York Times:
Ocean Spray votes against merger idea
"We believe we can continue growing our brand and ensuring the financial health of
our grower-owners by revitalizing the organization." Board Chairman Don Hatton
11/20/99 New York Times business reporter,
Constance Hays, surveys grower reactions to the decision to maintain Ocean Spray as a
cooperative. Tom Gelsthorpe, from E. Sandwich, MA., a grower/owner who was just elected in
the nomination to be confirmed at the annual meeting in February is quoted as saying
"we are fairly certain that a majority of growers favor the merger, and the board
doesn't reflect that. The people who oppose the merger have sentiments about somehow
recapturing the past. Those who favor the merger want to raise the industry to a higher
level."
Robert Rosbe, a vice president of Ocean Spray's
largest grower, A.D. Makepeace, based in Massachusetts, states "we think it puts
everybody in jeopardy, particularly the smaller growers." Advocating a recall of the
entire Board, Nabiel Shawa from Washington explains his position: "it's really in
reaction to the intransigent attitude of our directors. All I'm asking for is an open,
democratic process. They have been very tight-lipped. They have not been open or frank
with the cooperative membership."
Commenting on the feelings of the growers, Ocean
Spray spokesman Chris Phillips is quoted as saying "Clearly there is some
disappointment out there"
New York Times, 11/20/99, HERE
In Wisconsin, The Milwaukee
Journal Sentinel features this story in its business section. Greg Fanning, who
is president of the Wisconsin State Cranberry Growers' Association says "I will
be anxious to learn from our directors about what exactly did transpire and what their
logic was. As a farmer-grower-owner, the idea of remaining a co-operative has some appeal
to me. At the same time, I'm a realist, and I know that the world market has changed as to
the production and sale of food."
Northland grower John Sager is expresses his view on Ocean
Spray as follows: "anything they can do to improve themselves is positive. The
industry right at the moment is in a state of oversupply and in a state of flux. The
industry needs a very strong Ocean Spray. The industry needs a very strong
Northland."
Read the Journal Sentinel article HERE
The Cape Cod Times interviewed
newly nominated Board member Jim Jenkins and reports:
(Jenkins said the news of the rejection of a
merger or sale) was disheartening.
"I felt the idea of a strategic merger should have been used as a benchmark from
which all other proposals were looked at," he said.
He said he hopes the current Ocean Spray board and management will release the findings of
a Bain & Co. and Merrill Lynch analysis of the company to the growers-owners. To
withhold it, he said would be "the height of hypocrisy."
Cape Cod Times, 11/20/99
article HERE
The Boston Herald has an
article which quotes Chris Phillips as saying "The decision was that if another buyer
could accomplish bringing Ocean Spray to the next level, Ocean Spray could do the same
itself. But there are still going to be major changes in how the cooperative is designed
and how it's structured. A very different Ocean Spray will emerge when this is over.''
Boston
Herald article HERE
Business reporter John Estrella, who has
followed Ocean Spray for many years, reports the story in the Patriot Ledger. Asked
whether the Board might release the Bain report to shareholders, Chris Phillips said that
was not likely stating "that's highly proprietary information." The Ledger
article included the following from Don Hatton: "Our grower-owners take great pride
in owning this company and want to continue controlling their destiny.''
Patriot
Ledger story HERE
The Associated Press is also
carrying the news about the Ocean Spray Board's decision. You can read the A.P. story on
the Tampa
Bay Tribune web site HERE. The Boston Globe and other papers are carrying this story.
The Wall Street Journal had an
article featured under the heading "Top Business News" on their online front
page. They report the decision but do not include any interviews. It requires a paid
subscription to read the article on their web site HERE.
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Ocean Spray board adds
pro-merger members
By Robin Lord Cape Cod Times, 11/19/99,
here
Ocean Spray Board
continues historic meeting
11/17/99 The Ocean Spray Board of Directors is
continuing to meet in Plymouth, MA, in a monthly board meeting unlike any other in the
history of Ocean Spray. Since several incumbents lost in their bids for renomination to
candidates favoring a major restructuring of the company and an acquisition by a global
corporation, Board members now have, in effect, heard the results of a referendum on
change vs. business-as-usual.
Be Bold Board of Directors
by Nabiel Shawa
11/12/99 This coming week our Board of Directors has the
responsibility to reenergize every Ocean Spray Grower/Owner’s future. Regardless what
direction they decide to chart they are certain to face sharp criticism. If they choose to
fully explore the sales/merger scenario they will be accused of selling out. If they elect
to make minor corrections and/or select a new CEO they will be accused of avoiding the
co-op’s inherent structural and financial shortcomings. Frankly they’ll be
damned if they do and damned if they don’t. Continued on the Forum.
#TOP
Tropicana sales
up
Shelf stable Sunny Delight down
Source: Beverage Digest
11/11/99 Pepsico's refrigerated juice business
scored well this quarter with an increase of 1.1 to a 22.2 share, while Coca-Cola's Minute
Maid, with a 16.3 share, increased 0.8. On the juice aisle where
cranberry beverages compete with the entire range of juices and juice drinks, the shelf
stable version of P&G's Sunny Delight was down a whopping 15.8%.
Recommended reading:
Competing in the
global marketplace
11/10/99 In an article, "Winning the World Over" by
Tim Stevens, that includes 61 slides, the results of IndustryWeek's 1999 senior executive
survey is discussed. The survey reveals how to steer a company through competition in the global
marketplace. Link to article here.
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