Cranberry Stressline Archives

DeMarco files suit against Ocean Spray
also
An open letter to the Ocean Spray ExtraNet by Hal Brown and Betty Brown -- Ocean Spray Cranberries Inc. Ratings Lowered; Off Watch; Outlook Stable -- Cooperatives Give Members Control Over Destiny -- Black carrot juice from Turkey -- Not for attribution by Hal Brown (includes "At least three more lawsuits against Ocean Spray are in various stages of planning or implementation at this time") -- Ocean Spray changes White Cranberry Juice Drink label text

More on Nantucket Nectars

10/31/01 An article in the 10/29/01 edition of The Deal entitled Nantucket Nectars may be shopped stated that:

"At a time when soda giants such as Coca-Cola Co. and PepsiCo Inc. are willing to pay frothy prices to acquire small fast-growing non-carbonated drinks with health appeal, the fate of Nantucket Nectars has been the subject of intense speculation."

The article noted that their source speculated that the Nectars sale would be handled through Merrill Lynch, and went on to say that...

"The cast of interested suitors beyond Coca-Cola and PepsiCo could include food giants such as Kraft Foods Inc., whose beverage brands include Kool-Aid powdered drinks and Capri-Sun juice drinks, and Campbell Co., which owns V8 Splash blended fruit juices."

10/30/01 With the sale of Nantucket Nectars being discussed again, and in light of Coca-Cola's purchase of Odwalla (see right column), Stressline suggests readers revisit the Sept. 2nd editorial Some pros and cons of a sale of Nectars to Coke. As an addendum to that piece, we would add that the Ocean Spray label's virtual disappearance in single serve now leaves them with only Nantucket Nectars as a viable competitor in that segment. In the refrigerated juice aisle, which is growing at the rate of 30% a year, Ocean Spray has no other offering besides Nantucket Nectars. These two facts tip the scales against a sale, unless there are economic or other factors weighing in the opposite direction. To date Ocean Spray has not revealed what these factors may be.

On the face of things, selling Nectars appears to be a last ditch effort to raise cash. One would expect Nectars' sales to double within the year as a subsidiary of a company like Coke's Minute Maid or Pepsi's Tropicana.

If Ocean Spray really intends to remain a free standing juice company, helping Coke or Pepsi become an even more powerful competitor seems to defy logic.

10/31/01 Press Release: Schneider Logistics Expands Its Relationship With Ocean Spray.

10/30/01 Press Release on Coke purchase of Odwalla juices
Ed note: Odwalla's newest juice is Glorious Morning, an orange-cranberry blend

10/30/01 Oregonian: Oregon cranberries bring more sugar and size to table

10/29/01 A.P. More On MA. bog fish farming

Reuters: 10/25/01 Ocean Spray sets stage for comeback

10/23/01

The Cape Cod Times covers the DeMarco lawsuit
here

Big fish, little fish
Ocean's Spray's third largest grower has filed suit against the cranberry cooperative claiming that management, as well as 11 current and former directors, have "conspired and schemed" to drive smaller growers out of business. by Robin Lord, Cape Cod Times.

Ed. note: Most of the Press dismissed this lawsuit with the incorrect explanation offered by Chris Phillips of Ocean Spray, i.e., that it was merely an effort to force a sale of the company. In fact, the suit alleges

that management and the Board committed fraud, conspired and schemed to drive smaller growers out of business in order to profit themselves when the company was eventually sold, that they engaged in a complicated conspiracy, breached their fiduciary trust, continuously misrepresented the facts concerning the financial condition of Ocean Spray and the need to sell the Company, and than to pursue a fraudulently created and totally unsuccessful turnaround plan....

The view from Oregon:

Cranberries aplenty but farmers pessimistic about their future, by Oleh Lysiak, The World, Coos Bay, OR

Current, former Board members speak out

Quotes:

"I feel Ocean Spray controls the market... they can raise the price, lower the price, do whatever they want to do. They say they don't. They say they can't, but you can't tell me they're not doing it.... Ocean Spray needs to get mean and lean. They're not going to do it as long as the growers are going broke and they're making money. I don't believe Ocean Spray is run like a business, or maybe it's run like their business, not ours. I don't believe it's a co-op any more. We can't vote like a co-op. They don't tell you anything like a co-op should."
Jack Hackett, Bandon, Oregon, former Board Member of Ocean Spray Cranberries.

"The market establishes the price of cranberries... Juice concentrate buyers, the marginal buyers, will pretty much set the price. Cranberry juice has to compete with all the other juices on the supermarket shelf. The housewife will buy the more competitive product.... The marketplace really sets the price.... We've already harvested the 2000 crop and anticipate, through projection, that it will be a fairly substantial increase from the 1999 crop... At this point we don't know what that will be. As a cooperative, we get paid as the product is sold. Right now, we don't know what that will be, but project that it will be from $17 to $25 a barrel.... It will be 14 to 15 months before we get the information on the 2001 crop we're harvesting now." Daryl Robison, Sixes, Oregon, Board Member of Ocean Spray Cranberries.

"Technically, we're both (ed. note: a corporation and a cooperative ) Ocean Spray is more than a business. It's a way of life. (The DeMarco lawsuit is) an attempt to push Ocean Spray toward a sale. We're involved in a turnaround. Our market share was eroding. We stabilized the erosion and are gaining back our market share. We're eating into the surplus. The future will be bright again."
Chris Phillips, Ocean Spray spokesman.

from article Cranberries aplenty but farmers pessimistic about their future, by Oleh Lysiak, The World, Coos Bay, OR . The article also features interviews with Oregon growers Reg Pullen and Alex Ells.

10/19/01 (Updated below) We thought that our suggestion that you send positive press releases to Stressline was a reasonable one. Imagine our surprise when you responded that when you post items on the ExtraNet that Stressline isn't on your "radar screen" and informed us that you would not add Cranberry Stressline, a resource many people count on for news about the cranberry industry, to Ocean Spray's distribution list. It seems a bit like discrimination against a publication that is out of favor with Ocean Spray management.

Your reference to the fact that you know by the "pings" that we access the ExtraNet frequently gives us pause, however. Many posters on the Stressline Forum have wondered about Ocean Spray monitoring their use of the ExtraNet. The logical conclusion from your remarks is that Ocean Spray does indeed keep, identify and review logons. As Jerry Seinfeld would say, "not that there's anything wrong with that," but ExtraNet users should be aware of that fact.

10/19/01 5:00 P.M. Addendum: In a follow-up, Ocean Spray has denied that they monitor their message board, and do not know who is who is posting unless growers identify themselves. They say they merely use their capability to identify users who access the web site to determine web site traffic. They say that logons from our password stood out because of the larger number of hits than most. However, they reiterate their refusal to put Cranberry Stressline on their distribution lists.

Ocean Spray Cranberries Inc. Ratings Lowered;
Off Watch; Outlook Stable
Ratings are removed from CreditWatch

10/19/01 (Ed. Note: Stressline was not able to post this earlier because we couldn't locate an Internet source for the report. Thanks to an anonymous poster on the Forum for supplying the URL for S&P report.) Read Report

"Broward County, Fla.'s largest law firm and one of its partners could face sanctions of up to $700,000 for making what a federal magistrate found to be frivolous claims in a racial discrimination lawsuit against Massachusetts-based Ocean Spray..." Miami Daily Business Review

All-American Thanksgiving Favorite Offers Health Benefits http://www.theworldlink.com/display/inn_news/news01.txt

10/23/01 Cranberry Institute - Since the first Thanksgiving of 1621, cranberries have, and continue to be, on most American's holiday menus. Not only are cranberries popular because they're steeped in this country's heritage - they also serve up a variety of potential health benefits. CONTINUED