June 1999 - continued

Ocean Spray's sale of Middleboro Plant Equipment

6/29/99 Schneider Industries (St. Loius, MO) provides investment recovery for industries. Recent clients, along with Ocean Spray, include General Mills and Amoco. Their web site has information, descriptions and pictures of the processing and packaging equipment from the closed Middleboro plant, as well as some from the Nevada plant.

Sale Information and descriptions


"Key growers" speak:

Ocean Spray needs marketer as head
Source:
Boston Globe South Weekly

6/27/99 Growers David Eldridge, Clark Griffith (formerly a member of the BOD) and Jeff Kapell (current BOD member), as well as Ocean Spray spokesperson Chris Phillips, were interviewed for an article in the Boston Globe. Eldridge mentions the need for the new CEO to have strength in creative marketing and public relations. Griffith wants someone with charisma and who can inspire research and development. Both Eldridge and Griffith allude to the competition with independent cranberry companies.

Kapell sheds light on the reasons outgoing CEO Tom Bullock was hired, noting that while he had "some strength in marketing" he was promoted to the top job primarily because "he knew the organization well."

Griffith revealed that the salary paid Ocean Spray CEOs was in the $500,000 range plus bonuses, suggesting that this was not adequate to attract the best candidates. Read article here.


Online Message Boards and Forums

6/26/99 For those interested in other unofficial uncensored business Forums on the web, try the links on this page from the amazing web site Vault Reports, here. While on the Vault Reports web site, you can click "Home" and surf their site for a wealth of information about the corporate world.


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What makes Ocean Spray Great?

Hal Brown

6/25/99 Ocean Spray is more that  a company that collects and markets fruit. Ocean Spray to millions of consumers, and yes, their children, has for generations meant cranberries.  The company logo, likewise, means cranberries, and the combined name and logo are priceless. Together they convey not only a product of the highest quality, but a company that can be trusted. People believe that Ocean Spray is a good product which is grown, made and marketed by fine, caring, honest people. The name and logo alone will induce many consumers to try a new product.

Most consumers don't know or care whether a company is publicly traded or a grower owned farm cooperative. However, being the later always opens advertising opportunities which play on the notion that though big, Ocean Spray is not your typical impersonal corporation. As Tom and Tom at Nantucket Nectars have demonstrated, this is marketing at its best. Of course the image must be grounded in truth. Otherwise the fall from grace with the public can be long and hard.

With the cranberry market now approaching free fall, only a handful of growers and directors are resisting accepting the awful truth about the paltry returns coming for the remainder of last year's crop payments, and the dismal outlook for next year. While some prefer blissful ignorance, grower/owners with the intestinal fortitude to do so have educated themselves about the errors made by top management at Ocean Spray. Growers who didn't even know what ERP stood for a few months ago, now know that it already cost them upwards of $30 million to install and unknown dollars in lost revenues, and will cost tens of millions to fix. Growers who wondered why the cooperative needed to roll out a new brand name and label, Wellfleet Farms, to enter the 100% juice market, when the new approach would have saved millions in the first place, now understand that no matter how much you pay them, advertising consultants still have to work within the parameters of their assignment.

There are probably about ten corporations or cooperatives that would find Ocean Spray an attractive partner. Some of these are at least interested enough to put some resources into learning more about Ocean Spray. This web site has been beneficial to a few in showing not only the great strength of the company, but in helping them to understand its weaknesses. No large company will go into a partnership blind, and no large company is naive enough to believe there are no skeletons in the closet that management would rather not reveal. A sophisticated potential partner will locate and open these closets, and a company that tries to prevent this will pay the price for its duplicity.

Many of those who have analyzed Ocean Spray, and the causes of the "cranberry crisis", see need for drastic changes in the way the industry leader is run. Companies are successful, in part, because they know how to learn from their mistakes and bounce back afterwards. Companies don't make mistakes, people do. Some CEOs are probably incredulous as they read about the decision to allow Tom Bullock to remain at the helm of Ocean Spray until sometime next year. They know that had they sailed their "unsinkable" luxury liner at full speed into iceberg cluttered waters, they would have been unceremoniously fired by their Board of Directors before the iceberg with their name on it came along. Corporate boards are far sighted enough to know that as long as the company remains afloat, as long as its infrastructure is intact, Captains can be be changed and new courses charted.

Ocean Spray is still great because of the farmers who put it together and the farmers who continue to hold it together through hard times. It isn't great because of astute management or wise directors.


Ocean Spray announces early commitment figures for 1999

6/24/99 Ocean Spray general sales manager Richard E. O'Brien announced the details of the Early Commitment Pricing Program for the coming crop on June 15, 1999. This program endeavors to allow Ocean Spray to better manage its inventories of fruit by giving discounts to customers who contract to purchase before the crop is harvested.

The price prediction is in the range of $45/bbl with a plus or minus of $5.00bbl. This assumes that the crop is close to projections for fresh fruit. There is a minimal bin charge. The actual opening price will be announced around the first of November.

Independents wishing to avail themselves of the discount must place their orders before July 15, 1999. The discounts range from 6.2% below the announced commercial price for between 5,000 and 10,000 bbls to 9.8% for any amount over 50,000 bbls.


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On keeping options open:

Making Peace with Pepsi
Hal Brown, Editor

"The situation is slightly more complicated than Ocean Spray suggests... One might suppose that such relief would follow from Pepsi's concession that Pepsi's ownership of Tropicana is itself a breach of the exclusivity clause. Instead, as first-year law students quickly learn, the enforcement of contracts by injunction is the exception rather than the rule."  Judicial sarcasm from the Circuit Court denial of Ocean Spray's appeal of the District Court finding against the cooperative.

6/24/99 Ocean Spray has had a rocky relationship with Pepsico, many of the details of which are described in the somewhat sarcastic United State Circuit Court ruling which can be read by clicking above. The bad blood with Pepsi is rooted in many poor decisions made by Ocean Spray management. It also involves Pepsico's breaking a contractual promise not to distribute single serve products (Tropicana in this case) which competed with Ocean Spray. I am certain that Pepsico fully understands how the conflicts evolved and who the players were. With these players no longer in place, a whole new picture may emerge, making Ocean Spray once again an attractive partner for a strategic relationship that would benefit both companies. Continued hereI

Advertising:

Cramer-Krasselt wins Gold Effie for Northland Cranberry Ads

6/29/99 Wisconsin - It's the Academy Award for the advertising industry. Northland's "100% Honest -to- Goodness Juice" campaign won the prestigious Gold award for non-carbonated beverages. For Milwaukee based Cramer-Krasselt and Northland, beating Madison Avenue stalwart J. Walter Thompson which won the Silver for their Pepsi-Lipton ads, has to be like an upset at the Oscars. Welch's won the bronze for their "Memories/ White Grape ads. Read more about the award here: Effie Award for Non-Carbonated beverages

Ocean Spray NCAA Baseball Web site sponsorship a success
Source:
PR Newswire

6/29/99 Any doubt that the Internet provides excellent opportunities for targeted advertising should be dispelled by the statistics on hits to the NCAA web site www.NCAAbaseball.com during the championships. The site logged over 32 million hits. Along with Ocean Spray, corporate sponsors included American Express, Champion, Compaq, General Motors, GTE, Gillette, Hershey's, Kentucky Fried Chicken, Marriott, Nabisco, Pepsi, Phoenix, Pizza Hut, Rawlings, Taco Bell, Sears, Continental Airlines and Aquafina.

Gatorade kicks off new campaign
Source: Company Press Release

6/28/99 Quaker Oats' successful sports drink, Gatorade, has rolled out a new web page feature called "Be a Mia Fan" just in time for summer. The interactive feature builds on their successful Michael Jordan vs. world soccer ace Mia Hamm ads. Read more here.

$14.2 Million for Wellfleet ads
Source: Advertising Age

6/26/99 In addition to the many costs of rolling out a new label, the price tag for measured media advertising for Ocean Spray's Wellfleet Farms came to $14.2 million for less than a year. Arnold Advertising, which handled that campaign, is apparently onboard again for the launch of the the new Ocean Spray Premium 100% juices. The campaign planned for the new line is described as "intensive".


The Web:

OS Growers' Extranet  Forum Changes

6/29/99 Ocean Spray initiated major changes in their password protected grower/owner Extranet on June 23rd offering more timely and more candid information, and a moderated forum for messages on any topic (i.e., messages were reviewed before being posted). After less than  a week their Forum was changed again from a moderated one to an unmoderated one. That means your messages are now posted automatically without review. Grower Relations is urging posters to sign their messages. Growers who are online but do not already have their password can get it from Grower Relations. You can access the ExtraNet HERE.

New on the web in
the past 2 weeks:

Ocean Spray Chevrolet: See the car

Ocean Spray's Herzlich Willkommen im Cranberry Information Center.

Ocean Spray a sponsor of The Great Floridian Triathlon

Compare Ocean Spray's PAC contributions with those from other agribusiness's

Old news you may have missed:

March, 1998 Press release on the SAP


6/30/99 update in red
Food for thought:

The mind is a terrible thing

by Hal Brown

"By and large, in fact, the news from the CR study is good, not bad -- fresh produce is safer than it appears to be, and may be rapidly getting safer." Quackwatch

"Psychologists have studied several perceptual factors that help explain how reasonable people can conclude that they have suffered toxic exposures and injuries when they have not. These include social proof, repeated affirmations, appeals to authority, vividness, confusion of inverse probabilities, confusion techniques, and distraction techniques." Quackwatch.

6/25/99 Coke's problems in Belgium, after scientific analysis, has been determined to not to have constituted any risk to public health. (1) In one instance, an off odor was due to defective carbon dioxide used in the carbonation process, and in the other, and odor on the containers was due to a wood preservative that had adhered to the bottom of some bottles or cans. Smell is one of the most potent, and the most evocative, of all human senses. An odor perceived as foul can trigger intense physical and psychological reactions. That such an odor caused 200 people out of thousands to become nauseous and dizzy is not surprising. Coke's public announcements mention "current public sensitivities to food safety issues" and state: "we continue to work around the clock to develop the additional data requested for satisfactory assurance." (2) Companies can loose customer loyalty if they don't  respond honestly and quickly to such scares, whether or not they represent a real health hazard. (3) Related stories:Salmonella in orange juiceDioxin in pigs | 6/30/99 Coca-cola pulls mold contaminated mineral water .

The Coke example represents the psychosocial phenomenon of "contagion", or the harsher term, "mass hysteria", which is well documented in scientific and lay literature. From the classic case study of the handful of children at the sports event who started a a chain reaction of vomiting when they threw up after eating hot dogs, to the more recent epidemic of "sick buildings", we can see a cautionary note for all those in the food industry.

Whether it's consternation over residual agrichemical levels on fruit, as covered in Consumer's Reports "How safe is our produce?" [Consumer Reports 64(3):28-31, 1999], and critiqued on the web's health and science watchdog site Quackwatch, or environmental concerns, people are still at the mercy of their own psychology. It doesn't take much for the body to respond to barely conscious fears with physical symptoms.

In the great cranberry cancer scare of the fifties, or the Alar scare of the 1980's, nobody got sick because cancer doesn't hit overnight with symptoms. In the Tylenol cyanide poisoning case, few if any people got sick from untainted Tylenol because everyone knew that the only symptom following ingestion would be sudden death. However, when the symptoms aren't immediately life threatening and are dramatic, the power of suggestion can take over and hundreds or thousands of level headed people may succumb finding themselves suffering the range of gastrointestinal (g-i) distress.

If you need any proof as to how sensitive the g-i system is to psychological suggestion, think about how quickly you can become nauseated at the sight of something you find disgusting or upsetting. Some people can't even listen to gross stories at dinner time without this reaction. Even physicans who may have specialities in areas other than psychosomatic medicine, like the expert on gastroenteritis, Dr. Veronique Verdonck, dismiss the power of the mind to cause severe symptoms. She treated some of the first victims and thought the patients were so sick they couldn't be suffering a psychosomatic reaction caused by contagion from the first student who became violently ill an hour after drinking the Coke.(4)

If you want to learn more about how the human psyche can lead to food product and environmental scares read about Environment Scares and propaganda, also in Quackwatch.


From the Forum:

For Those Following the 2nd Preferred Stock Case
By Linda Rinta

6/24/99 Efforts to negotiate a reasonable settlement on the repayment of stock and ARE's by former members in Massachusetts, Oregon and Canada.have been ignored by Ocean Spray. We were assured that in-house attorney would be in contact with our attorney no later than Tuesday. Tuesday came and went with not a word. Wednesday and Thursday came with not a word. Should that surprise anyone? The arrogance is characteristic. We are left with no choice but to file for a court date and take our case into the court and the press of our respective states.

BE ASSURED THAT EVERY EFFORT WAS MADE TO AVOID THIS AVENUE. We have spent a good deal of time and money trying to negotiate, but with the Board and Management absolutely ignoring us, we have no alternative but to pursue our goals in this direction. It is just too much hard earned money to walk away from. Sometimes, you have to take a stand.


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