"Win-win
situation" for Northland
Uncertainty surrounding Ocean Spray predicted to improve over coming year
1/7/00 According to Piper Jaffray beverage
industry analyst George Dahlman, as quoted in yesterday's Wisconsin
Rapids Daily Tribune, the sale of the private label portion of Northland Cranberries
"appears to be a win-win situation." Dahlman goes on to say that it "looks
like Northland is making the right moves. Its branded business is doing well, and it is
selling its private label business, which it really has never gotten off the ground
anyway. We believe both the overhang of cranberry inventories and the uncertainty
surrounding Ocean Spray will improve over the next 12 months. Meanwhile we'll keep a buy
on the stock."
"You can expect the most aggressive
street fight for cranberry market shares we have ever seen." Scott Corriveau,
president of Northland's branded products division
1/6/00 - In a Milwaukee Journal Sentinel article
yesterday, reporter Tom Daykin writes: "Northland Cranberries Inc. is at war with
arch rival Ocean Spray Cranberries Inc., company executives told shareholders at their
annual meeting Wednesday."
Shareholders attending the meeting were shown a
sampling of Ocean Spray coupons, including one that offered a $2 Ocean Spray discount to
any consumer who buys Northland juice. The coupon would print out automatically at the
time a customer bought a Northland product (Click to
view coupon.)
The sale of the private label end of Northland's
business is seen as a way to focus more on competing with the still dominant player in the
cranberry juice business, Ocean Spray. The juices bottled under the Northland label are in
direct competition with Ocean Spray juices. The Seneca label, still held by the company,
is a lower end product that doesn't compete directly with Ocean Spray. Mil.
Journal-Sentinel article
Cliffstar Press Release:
Cliffstar
Corporation signs definitive agreement to acquire Northland's private label juice business
Nations largest private label
juice company signs agreement to acquire Northland Cranberries private label division
1/5/00 - DUNKIRK, NY The Cliffstar
Corporation today announced that it has signed a definitive agreement to acquire the
private label division of publicly traded Northland Cranberries, Inc.
"This acquisition will continue our growth
as one of the nations leading private label juice manufacturers and offer us the
opportunity for improved services, efficiencies and flexibility in our bottling
operations," Sean McGirr, president, Cliffstar Corporation, said. "We are a
leader in this industry because of the new opportunities we create for our private label
customers, our associates, family of growers and our suppliers."
Cliffstar will acquire Northlands private
label product line that includes a wide array of cranberry, apple, grapefruit and grape
juice products. According to IRI, dollar sales of juices are up 7.2% versus 1998, with
private label having the largest category market share of 12.5% and sales up 12.2%.
"This acquisition, in combination with
consumer trends and our recent acquisition of Carolina Products, provides expanded
opportunities for growers and customers of Cliffstar," Robert Gioia, Cliffstars
chairman, said.
Cliffstar manufactures more than 145 quality
Corporate Brand Label fruit juices and drinks for the leading grocery customers throughout
North America. The company operates manufacturing facilities in Dunkirk, NY, Joplin, MO,
Fontana, CA and Greer, SC and processing plants in Warrens, WI, East Freetown, MA and
Fredonia, NY. Corporate headquarters are based in Dunkirk, 45 miles southwest of Buffalo,
New York.
Northland is a vertically integrated grower,
processor and marketer of cranberries. The company processes and sells Northland brand
100% juice cranberry blends, Seneca brand juice products and other fruit juices, Northland
brand fresh cranberries and other cranberry products. Easy to print version
Government:
Vice President Gore announces
administration will seek over $1 billion to help farmers protect water quality,
environment
1/7/00 - Washington, DC -- Vice President Al
Gore announced today that the Administration will seek nearly $1.3 billion in the FY 2001
budget for conservation programs that help family farmers take steps to protect water
quality and the environment and to preserve farmland. This conservation package is part of
a larger Administration budget proposal to strengthen the farm safety net. "Farmers
are among the most important stewards of our land and water," Vice President Gore
said. "Despite the accomplishments made in recent years in stopping soil erosion and
protecting water quality, agriculture's environmental challenges are multiplying. The
initiatives that I am announcing today will provide needed financial support to our family
farmers as well as tremendous environmental benefits for the American people."
Continued | Easy to print version
Food Labeling & Health Related Claims Conference
Attracts Monsanto, McNeil, Orafit, Kraft Foods, Nabisco,
Roche, Tropicana, Campbell Soup Company, Pharmavite and other
Major Players
NEW YORK, Jan. 3 /PRNewswire/ -- Strategic
Research Institute N.Y., announces Food Labeling and Health Related Claims conference:
Read press release HERE.
Added 1/5/2000:
Read the papers from last year's conference on a similar topic, "New economic
approached to consumer welfare and nutrition", including a long study "Measuring
demand for functional foods and the impact of health labeling regulation" and fifteen
other presentations. HERE
News:
Nantucket Nectars Implements
Oracle's E-Business Suite
1/3/2000 - According to Beverage World,
Nantucket Nectars will be replacing several computer systems with Oracle's E-Business
Suite in March because they made collecting and analyzing data difficult. Read article
here: Beverage World article
Oregon Washington race for BOD
heats up
12/26/99 The proposed downsized Ocean Spray
Board will combine the states of Oregon and Washington into one growing area for the
purpose of Board representation. The Washington candidate, Don Hatton, is an incumbent and
is the current Chairman of the Ocean Spray Board. His opponent, Daryl Robison, decided to
run from Oregon when controversial director Jack Hackett resigned at the Dec. 21st meeting
of the Ocean Spray Board in Chicago. Hackett was accused of leaking a
"confidential" memo from Bain to shareholders.
This is the first time in the history of Ocean
Spray where candidates from two different states have squared off in an election for one
seat on the Board.
Daryl Robison has posted a statement about his
qualifications and platform on the Cranberry Stressline Forum. Supporters of each
candidate are also posting their opinions on the Forum. Go to
Forum
Coke's distribution decision hurts
smaller company
12/23/99 According to an article by Constance
Hays in today's New York Times,
the bottled water company Naya is seeking bankruptcy. The story of Coca-Cola's
decision to stop distributing a bottled water, manufactured by this Canadian company,
which has led to a bankruptcy filing is strikingly similar to the PepsiCo decision to stop
distributing Ocean Spray's single serve products when they purchased Tropicana.
Coke had been distributing Naya, which is a
bottled filtered water with added minerals. With Coke's help, the privately owned company
grew 30% a year for five years.It was so successful that Coke tried to buy the company in
1997. This year, when Coke introduced the own bottled water, Dasani, they stopped their
Naya distribution. Now Naya is attempting to reorganize.
The Pepsi and the Coke cases demonstrate what
can happen when a large company moves into a market previously dominated by smaller
companies. In Coke's case with Naya, they first attempted an acquisition. Failing that,
they brought out their own competing product, severed the distribution relationship with
Naya, and are now becoming a formidable competitor.
Read NY Times article
CATCH UP ON THE PREVIOUS
TWO WEEKS OF CRANBERRY NEWS HERE
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Northland
Cranberries, Inc., posts 1Q EPS $0.02 vs. $0.01
Northland Cranberries, Inc.
Interim Consol. Earns. Nov. '99-- Thou. US Dollars
3 Mos. to Nov. 30: |
1999 |
1998 |
Revenues |
74,967 |
34,236 |
Net income |
321 |
120 |
Share earns. (basic) |
$0.02 |
$0.01 |
Share earns. (diluted) |
$0.02 |
$0.01 |
Released 1/7/2000 8:39AM EST: NEW YORK
(Standard & Poor's)--, Northland Cranberries, Inc., announced 1Q EPS $0.02 vs. $0.01.
Northland Press Release:
Northland Signs Agreement to Sell Domestic
Private Label Juice Business to Cliffstar Corporation
WISCONSIN RAPIDS, Wis., Jan. 5 /PRNewswire/ -- Northland
Cranberries, Inc. , manufacturer and marketer of Northland brand 100% juice cranberry
blends and Seneca brand fruit juice products, today announced it has entered into an
agreement to sell its private label shelf-stable juice business and certain related
inventories to Cliffstar Corporation, a privately-held manufacturer of private label juice
products based in Dunkirk, N.Y. No plants or equipment are included in the proposed sale,
which is expected to close before the end of the first calendar quarter of 2000, after
certain conditions, including expiration or earlier termination of the 30-day federal
Hart-Scott-Rodino Act antitrust waiting period, are satisfied. The business being sold
represents approximately $43 million of Northland's $237 million of fiscal 1999 revenues.
Northland will receive a total of $32.35 million for the
business and certain cranberry inventories and an additional amount equal to the fair
market value of other inventories to be conveyed at closing, estimated to be approximately
$4 million. Northland will receive Cliffstar's six-year promissory note for $28 million
and the balance will be paid in cash at closing and during the first ten months
thereafter. Northland will also be entitled to an earnout payment equal to a certain
percentage of profits realized by Cliffstar from its sale of cranberry-based juice
products during the six-year period following the closing, with a minimum earnout payment
over the six years of $5 million. Cliffstar will have the option to terminate the earnout
during the first 30 months following closing by paying Northland an aggregate earnout of
$22 million (including any prior earnout payments) and prepaying the balance of the
promissory note issued at closing. Northland expects to realize a pretax gain of
approximately $3 million on the sale.
At the closing, Northland and Cliffstar will enter into a
long-term cranberry supply agreement pursuant to which Northland will supply cranberries
to Cliffstar and a contract manufacturing agreement pursuant to which Northland will
co-pack juice products for Cliffstar at its bottling facilities.
John Swendrowski, Chairman and CEO of Northland, said, ``This
sale will allow us to focus entirely on building the Northland and Seneca brands within
the juice category. While the sale will considerably reduce annual revenues, we do not
expect a material impact to our operating profits on an ongoing basis. We believe that the
reduction in goodwill amortization and the interest income, co-packing profits and profits
on raw cranberry sales from the transaction will offset prior profits from the business.''
Easy to print
version
Press Release:
Northland Cranberries, Inc. reports first
quarter earnings; conducts annual shareholder meeting; announces quarterly cash dividend
1/5/00 WISCONSIN RAPIDS, Wis., J /PRNewswire/ -- Northland
Cranberries, Inc., manufacturer and marketer of Northland brand 100% juice cranberry
blends and Seneca brand fruit juice products, today reported fiscal 2000 first quarter
financial results for the period ended November 30, 1999. Total revenues recorded for the
three-month period were $75.0 million, up 119% over last year's first quarter revenues of
$34.2 million. Net income for the quarter was $321,000, or $0.02 per share, compared to
fiscal 1999 first quarter net income of $120,000, or $0.01 per share.
John Swendrowski, Northland Chairman and CEO, stated, ``The
results for the quarter are in line with our internal expectations, as well as the recent
published estimates of market research analysts. The dramatic increase in revenues over
the first quarter of last year was primarily a result of increased sales of our branded
products, which includes Northland 100% juice products and Seneca juice and drink
products. Also, substantial revenue gains were generated through co-packing operations,
compared to last year. Continued
Corporate diversity
1/4/2000 - Part of the legacy at Coca-Cola that
Douglas Ivester left for his successor, Douglas Daft, is an ongoing problem with the black
community and its own black employees. According to Constance Hays in today's New
York Times (Ivestor was a) "brilliant planner who masterminded the interlocking
relationship between Coca-Cola and its bottlers around the world, (who) was criticized for
what was seen as insensitivity and arrogance in certain situations. His tenure was clouded
by declining worldwide profits, scuttled acquisition plans and the biggest product recall
in company history last June." NY
Times article
Technology for the juice business
1/3/2000 - There's an excellent article about
Enterprise Resource Planning (ERP) technology in Beverage World entitled "Food and
beverage companies need to integrate information enterprise-wide." Read article here.
Did you know?
12/29/99 - Just prior to Christmas, according to an article,
"Call it a Christmas cranberry crunch: Not a crisis, mind you. But only three days
before Christmas, there's a shortage of fresh cranberries" in the Madison, Wisconsin
State Journal (12/21/99), there was a shortage of fresh cranberries in Wisconsin.
According to a British trade journal, Ocean Spray is spending
3 million pounds promoting cranberry as a drink with adult appeal in the U.K. Bates
Advertising is handling the account in the UK. Bates' U.K. chief executive John Stubbings
said, "the market has grown by 40 per cent in the last six months but that's mainly
in the kids' sector. We have to create a brand proposition for Ocean Spray
as an adult drink." Also, in the United Kingdom, as of this summer, three flavors of
Craisins were due to be relaunched: regular, orange and strawberry. New for the English
Christmas, it was reported that Ocean Spray was introducing a gourmet sauce product
described as a "cranberry variant with orange liqueur, mulled wine and extra
fruit."
Craisins got a good review in the Israeli newspaper HA'ARETZ
(Sept. 22, 1999) where they were described as "an excellent snack on their own or
make fine additions to muffins, pancakes or English-style cakes." The article also
said that craisins are "worth adding to dry breakfast cereals in the morning,"
and that "a great deal of current research indicates that cranberries are an
excellent natural antioxidant, so these delicious tidbits may actually even be good for
us."
According to an article entitled "The new economy is
stronger than you think" in the Nov./Dec. 1999 Harvard Business Review, "Nantucket Nectars used to be a tiny company run by two friends who
sold their wares off the back of a boat. An entrepreneur fell in love with their business
plan and gave them several million to expand the business before it was purchased by Ocean
Spray for almost $100 million."
'When the bottom drops
out
this fast, it's just unbelievable'
By Charles Mathewson
© 1999, MPG Newspapers
Reprinted with permission
PLYMOUTH - Will Stearns has a habit of chuckling in
mid-sentence. He's not only an optimist. He's enjoyed 20 years of good fortune as a
cranberry grower. The chuckle goes away when he talks about the future.
"It's been a wonderful ride," Stearns said.
"But when the bottom drops out this fast, it's just unbelievable. Even if the market
does recover, it will never come back like it was." The drop in cranberry prices
means Stearns can no longer make a profit on his 42 acres of bogs. This year he and his
son saved labor costs by picking the bogs by themselves. CONTINUED | Easy to print version
State wants growers to bog down
Offers $40,000 grants to those who agree not to develop land
By Charles Mathewson
© 1999, MPG Newspapers
Reprinted with permission
PLYMOUTH- Cranberry growers got an offer for help Friday.
It's an offer many can refuse. They wonder if it's enough to save their farms.
Approximately 150 growers participated in a symposium at the
Sheraton Inn Plymouth. They learned the state will offer $40,000 grants in exchange for an
agreement not to develop their land for 10 years.
"Our growers must increase the efficiency of their
operations and lower costs to remain competitive," said Jeff LaFleur, executive
director of the Cape Cod Cranberry Growers' Association. "These programs will provide
the means for Massachusetts' cranberry farms to remain a strong force in the now global
cranberry industry."
No longer kings of the cranberry industry, local growers have
to find new ways to remain competitive or sell the farm. Collectively, they own thousands
of acres of developable land around their bogs. They could dump all those acres onto the
housing market and retire from an increasingly losing proposition. Such a move would
further stress local governments trying to maintain a reasonable balance between
commercial and residential land.
"The meeting helped us put things into focus," said
Wayne Barnes, a Plympton grower and past president of the Cape Cod Cranberry Growers
Association. "It's discouraging. You put your heart and soul into something for years
and overnight you have no income, no equity." CONTINUED | Easy to print
version
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