Press Release Harvest Sets Stage for Marketing Efforts; Ocean Spray Optimistic Despite Challenging Year LAKEVILLE-MIDDLEBORO, Mass. --Sept. 27, 1999--As the cranberry harvest gets into full swing, there's no doubt another bumper crop is in store for the cranberry industry. The tart berries will be showing up everywhere in the year 2000, and that's good news for consumers. Market leader Ocean Spray says consumers can expect a hearty supply of cranberry products for the holiday season while the record crop is spurring the Massachusetts-based cooperative to reenergize new product development efforts and aggressively promote cranberry offerings year-round. The U.S. Department of Agriculture predicts growers will harvest 5.81 million barrels of cranberries, or 6 percent more than last year. When Canadian figures are added, USDA's Cranberry Marketing Committee projects the harvest will total between 6.2 and 6.4 million barrels. The increased supply of cranberries has eclipsed demand. Total cranberry inventory has reached record levels, with two years of cranberry surplus and flat market demand. This excess, which translates to lower returns for Ocean Spray and other cranberry growers, presents a marketing opportunity to grow the category. "There's more and more evidence that women and families are looking for healthy products that give them great taste and refreshment," said Don Hatton, Ocean Spray Chairman of the Board. "That's exactly what Ocean Spray and cranberry is known for. We're going after the untapped potential in the market with a full slate of promotional programs and new advertising as part of one of the most aggressive marketing campaigns we've ever executed." The cooperative commands 50 percent of the cranberry juice market, but has just wrapped up a challenging fiscal year marked by slow revenue growth and far lower-than-expected returns for grower-owners. At the same time, the company is optimistic about changes it is making to improve performance. "There's real opportunity to convert more consumers to the taste and health of cranberry and to grow the category significantly," said Hatton. "If you look at the numbers, our heavy users are not all that heavy. Consumption among juice drinkers is a fraction of that enjoyed by other, less healthful beverages. We are leaving lots of business on the table." Capturing that business is a critical focus while the company undertakes the search for a new CEO and considers other business options that will position the company for growth and deliver greater profitability to stakeholders. Building on a record number of new product introductions in 1998, Ocean Spray has stepped up new product development efforts and is launching three new products to consumers this fall. The company plans to invest $75 to $100 million this year to vigorously market new and existing products. According to the Cranberry Marketing Committee, that's the only way to drive growth of the cranberry market and balance out the supply and demand figures. "With utilization estimates well below the anticipated record harvest and high inventories, the industry as a whole has to market cranberry products like never before," said David Farrimond, general manager of the Cranberry Marketing Committee. "Aggressively promoting the health benefits of cranberries is key to the equation." Ocean Spray's renewed marketing efforts will focus on the two things consumers want most from cranberry products: health benefits and distinctive taste. With the recent announcement of Ocean Spray Cranberry Juice Cocktail PLUS(TM), the 69-year-old cooperative is giving consumers a convenient route to better nutrition. Hitting shelves this month, the supercharged juice contains 130 percent of the Recommended Dietary Allowance of vitamin C and is a good source of calcium and vitamins A and E. "Ocean Spray's recent introductions are the first in a string of new products that deliver great-tasting products with the healthful goodness of cranberry," said Stu Gallagher, Vice President, Marketing. "We will continue to develop innovative new products and breathe new life into existing ones, creating greater consumer demand and making a valuable brand even more valuable for all of our stakeholders. If we do our jobs, it will be a win-win." The cranberry giant also renamed its line of 100-percent juices as Ocean Spray(C) Premium 100% Juices in May to put more emphasis on the healthfulness of the products. At the same time, Ocean Spray added two new flavors, Cranberry and Concord Grape, and Cranberry and Pacific Raspberry. New labels clearly identify the new line as 100-percent juice, and it is available on store shelves now. Since 1930, Ocean Spray Cranberries, Inc. has been known for the distinctive taste and refreshment of cranberry. As an agricultural cooperative owned by 920 cranberry and citrus growers throughout the United States and Canada, Ocean Spray has been the best-selling brand in the canned and bottled juice category. With annual sales of about $1.5 billion, Ocean Spray continues to hold its long-standing position as the nation's leading producer of canned and bottled juice drinks.
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