Cranberry Stressline

July 1-7, 1999

Consulting Companies:

The Top Three

7/1/99 According to Vault Reports, the three leading business strategy consulting firms are McKinsey & Company, The Boston Consulting Group and Bain & Company. These three companies are considered the "ultra-elite". You can read company profiles of them on the Vault Reports Web Site here. Any or all of them could play a significant role in the future of the cranberry industry.

Since The Boston Consulting Group is representing an unidentified concern other than Ocean Spray. Pepsico is a long time client of McKinsey & Co. Ocean Spray has not announced the name of the company they are retaining. However, with their practice of always going first class, if they want to retain one of the top three, it would have to be Bain & Co.

 

 

The Boston Consulting Group doing Study of Ocean Spray

"We're trying to understand what's going on with the growers, with the people who built this company, and who are obviously very upset." A. Bruce Bowden, II,  Consultant, Boston Consulting Group

6/30/99 The Boston Consulting Group (BCG) is doing a two week study analyzing Ocean Spray from the grower/ owners' perspective. Consultants are interviewing growers in Massachusetts and Wisconsin. Contrary to allegations made in a 6/28/99 letter to Ocean Spray grower/ owners from Board Chairman Don Hatton, BCG does not represent Ocean Spray's competitors, according to a BCG representative; at least if we are to assume that by competitors Hatton means the independent cranberry companies.  While the consulting firm is not able to declare who they represent, they would not deny it might be a beverage giant interested in acquiring Ocean Spray. Growers were asked their opinions about acquisition of Ocean Spray by a larger company. One grower was asked how he would feel if there was no longer an Ocean Spray headquarters in Lakeville.The interviews included questions about the perceived strengths and weaknesses of Ocean Spray, and inquiries about how and why growers thought the current crisis developed.

John Decas, of Decas Cranberry Sales, Inc. states that any suggestion that his company has hired a consultant to gain insight into Ocean Spray operations and strategies is "categorically not true".

Decas goes on to say "If we did hire consultants for the purpose of learning about Ocean Spray operations and strategy, the last place we would send them is to grower/ owners. They are the least informed about what is going on at Ocean Spray. If my friend Donny Hatton would take the time to give me a personal call, I would be pleased to provide him with a list of the Ocean Spray activities aimed at undermining our expansion plans. Furthermore, I would be willing to provide him with Ocean Spray marketplace pricing practices that result in smaller returns to their growers unnecessarily."

Northland Cranberries' CEO, John Swendrowski also denied hiring a consulting firm stating "we have not hired any consultant to contact any Ocean Spray growers or management. In fact, I've been informed that some of our growers have been contacted by BCG."

 

p-ideas.gif (1029 bytes)

Advertising:

The purest cane sugar, the fruitiest fructose
(or the sweetest sweet corn syrup*)

Hal Brown

7/2/99 In the battle for the fickle public dollar, fashions come and go. Companies pay millions to advertising gurus to be at the forefront of the latest trend, or better yet, to actually start a fad. The example of Tom First and Tom Scott (next column) in emphasizing that pure cane sugar is one of the three ingredients of their "grandmother endorsed" lemonade is nothing short of brilliant in its simplicity. And why not. Who has made cane sugar the villain? Doctors, dentists, nutritionists? Who cares - picture those fields of Hawaiian sugar cane. What could be more natural.

People in the industry all know that the 100% juice advertising campaigns are just public manipulation. There's little difference between using an inexpensive de-flavored fruit juice as a sweetener and using a crystalline monosaccaride that is also found in fruit. At what point does a sweetener stop being fruit and start being fructose?

A more common name for fructose is "fruit sugar". If Ocean Spray wants to save a "few" million dollars, why not take a cue from Tom Scott and Tom First and advertise the products as "sweetened with pure fruit sugar"? Add a little nostalgia for the baby boomers with an ad from the 1950's (free), with the copy amended to read "the best tart red cranberries, sweetened with the purest fruit sugar - always was, always will be".....* Update I've been informed that Ocean Spray uses high fructose corn syrup (a mixture of dextrose, maltose and dextrins) as a natural sweetener, and as Tom Glesthorpe points out in the Forum, what could be more American than glorious fields of corn? So my new ad copy would read something like this: "the best tart red cranberries, blended for that perfect zing with the sweetest sweet corn syrup this side of Kansas."

 

Juice Guys Boston Store Now Open

7/1/99 Nantucket Nectars opened a "juice/ smoothie bar on Charles Street in Boston's tony Beacon Hill section today.

The shop is called Juice Guys. You can read about  it and view pictures on BevNet here. No announcement of the new  enterprise appears on the Juice Guys web site.

You can read more about how Tom Scott and Tom First promote the product by reading how they involved their grandmothers in  recording radio advertisements for the new line of lemonades, in 6/30/99 BevNet article here.

Readers following the "100% juice" cranberry wars might be interested that the advertising approach touts natural ingredients: "like all Nantucket Nectars, Squeezed Nectars are pasteurized and all natural, with no artificial colors, flavors or preservatives. The ingredients are lemons, water, and pure cane sugar." (emphasis added)

M. Douglas Ivester, Coca-cola chairman and chief executive officer still has the confidence of the Board, although an article in the Sunday Atlanta Journal-Constitution notes that ''While nobody is blaming Ivester for any of these circumstances, CEO's have been eased into premature retirement for less.''


Beverage giants:

The other Big Three

7/1/99 Those interested in the two viable scenarios for the future of Ocean Spray, drastic restructuring or being acquired by a larger company, would do well to follow news about the three beverage giants which dominate the world scene. Pepsico and Coca-cola jockey for the number one place while Cadbury Schweppes, which owns Motts and 7-UP, always maintains a strong third place.

Coke's woes are described on Stressline ("The mind is a terrible thing") HERE, and in a 7/1/99 a Boston Globe AP article   HERE. The Atlanta Journal-Constitution covers Coca-cola extensively and has an index page devoted to breaking Coke news and an archive of all Coke-related stories HERE.

 

Northland Cranberries:

CEO John Swendrowski Expresses Grave Concerns,
Critical of Ocean Spray Management and Board

"I am confident that in the long run, the Ocean Spray Board will act in the best interest of their growers. I am concerned with the speed  at which they will act and the potential impact on the value of the fruit. Every day that goes by without action, in my opinion, reduces the earning for our crop, whether you are an independent grower or an Ocean Spray grower."

6/29/99 In a letter to Northland growers dated June 28th, and received by most growers today, Northland founder, Chairman and CEO  John Swendrowski was harshly critical of Ocean Spray management for its decision to keep Tom Bullock in a decision making position until his successor is hired. He was also highly critical of the decision to replace Wellfleet Farms 100% juice with Ocean Spray Premium 100% Juice, at a cost he estimates to run in the neighborhood of $40 million. He sees this as an attack on Northland that will only serve to hurt all cranberry growers. Swendrowski was also questioned the wisdom of the "Early Commitment Program", as did  John Decas in his June 1, 1999 Newsletter (see Cranberry Stressline, 6/8/99).

You can read the entire John Swendrowski letter  HERE.

 

Home