by Randy Jonjak
6/3/99: I'm ready to admit I read the stressline. I am now taking the next step by contributing to it. They're discussing selling my company here, which is something I have some strong opinions on. Whether we like it or not, this site has become the forum for the grower. Our advisory board meetings, in theory, are the correct place for our frank discussions of the future of Ocean Spray. But in practice, the grower meetings have not been an open forum. Some topics we are told are off limits. Some questions are answered by directors in a manner which lets you know it shouldn't have been asked. (In the wake of our price decline, though, I must say the directors at the last advisory meeting in Wisconsin tolerated more questions than in the past.) Anyone who doesn't like the stressline forum should encourage open discussion behind our closed meeting room doors. Until that happens growers will visit this site because we're starved for information. "We've tried the quiet approach" We've tried the quiet approach, with the results that company is disintegrating before our eyes. There are times when the Board of Directors must hold some information confidential. But not all information. How many times can we be expected to leave our sprinklers in someone else's care at 4am to drive half way across the state, arrive and find the rumors we have heard are off limits for discussion that day? And then you will hear someone woefully state "Why don't more growers attend these meetings?". Face it. Our competitors have sources of information about what is happening in Ocean Spray, and that source is not the growers. I know it's damn hard to sit through meetings while people vent their frustrations. But that's the price of running a grower owned cooperative. I checked to see if there was a page on the Ocean Spray extranet were growers could chat. The "grower to grower" page there plainly states it is for horticultural discussions. If we were free to talk there, at least everyone reading would be Ocean Spray members with password protection. But what do you want to bet that the powers that be will have a good reason we "can't" use our extranet that way?
Anyone who believes growers feel free to talk at advisory meetings should note that very few sign their letters here. Who are they afraid of? I am going to submit my name with this letter. I'm Randy Jonjak. In fairness to my two brothers on the Board of Directors, I want to remove all possible confusion by explicitly stating I am not one of them. They are Paul Jonjak and Eric (Terry) Jonjak. I run my own cranberry operation which they are not involved in. On the topic of signing letters, more users of this site should have the guts to do it. Your credibility goes up 200% Further, as it stands now, anyone who wants to stir up Ocean Spray growers has only to type in some outrageous comments, misspell a few words so it looks real, and see if they can't weaken our unity further. Selling the Company Enough apologies. The reason I wrote this is to voice disagreement with two points that have come up recently on this site. I don't like the idea of selling our company or our brand to a company like Coke. Anyone who feels our rights could be protected should read the legal documents on this site regarding our Pepsi distribution agreement. I find it compelling that the topic of selling the Co-op was alive last fall, before the price per barrel dropped. You may recall Paul Jonjak wrote the growers a letter discussing this option. While I found the language somewhat convoluted, I gleaned an important point that I agree with. IF WE SELL THE CO-OP, IT MUST BE CONSIDERED A CASH OUT OF THE BUSINESS. IT WILL NO LONGER BE PROFITABLE TO RAISE CRANBERRIES IN A FAMILY FARM OPERATION. To Coke (or whatever beverage giant would buy us), the producer of raw materials is just a line on a spread sheet, with a cost number associated with it. You can bet Coke would have a management team whose whole purpose in life would be to shrink the total dollar amount paid for cranberries. You may think our price is as low as it can go now. You may be wrong. We now know there are more cranberries planted in North America than the market demands. Coke would only have to maintain the price at a level where their supply needs are met. If a few small cranberry farms go out of business, it doesn't show up on their spread sheet at all. I know that there are farms more modern than my 60 year old one, with better layouts, perfectly level beds, all hybrid vines, etc. that can produce cranberries more cheaply than I can. If they are debt free, then they can survive and I won't. Outside Directors The other idea I disagree with is outside directors. Growers are not marketing experts, nor do they know how to run a large company. Our forefathers had the smarts to admit this and hire outside talent to sell the fruit. This outside talent is called management. While management is expected to have the talent to run the company, their perspective is different from ours. Therefore, we maintain a Board of Directors to insure that we have the right management team, and that this team runs the company to our benefit. I see Ocean Spray as a vehicle to sell the fruit of my family farm, period. For whatever reason, management sometimes has different goals. THE BEST PEOPLE TO KEEP MANAGEMENT ON TRACK ARE GROWERS WITH A VESTED INTEREST IN THE BUSINESS. That is the formula that brought Ocean Spray to greatness. If we have deviated from that relationship between management and the Board of Directors, this is a hell of a wake-up call. And I sense that our directors are already responding. What incentive would an outside director have to serve on the Ocean Spray Board of Directors? What would this person's day job be, and would he be more loyal to growers or management? "Keep the company grower owned and grower run" Ocean Spray is the reason it has been profitable to grow cranberries for so long. If Ocean Spray crumbles, the independent growers will be no better off than we are. The fruit handlers will be the winners, and the farmers the losers. Keep the company grower owned and grower run. That is the only way to way to restore cranberry growers to their position as preeminent farmers in the world. Randy Jonjak, Wisconsin (most recent on bottom) Randy Jonjac's letter strikes a cord Randy Jonjak's letter struck a cord for me, as I'm sure it did for many. For all of our
carping and complaining, I think he spoke the words we all had hoped for. Nobody goes into
Ocean Spray with the idea of selling the company and nobody particularly likes the idea of
outside directors. These are the words of desperation. Re: Randy Jonjac's letter strikes a cord. 216.41.33.75 writes: Linda: For goodness' sakes, "desperation" will not lead us out of this jam; neither will glomming onto "the words we had all hoped for." The "horrific grower relations" you refer to has basically been a policy of telling the growers what they want to hear, rather than regular doses of reality, and it has led us, by the nose, into this mess. We have been told that a doughty little cooperative, with a market capitalization of less than $300 million and a Board with little experience outside of raising the raw fruit can somehow compete on a world scale with consumer packaged goods companies hundreds of times our size, run by Boards with broad ranges of business experience. Randy Jonjak's essay, however comforting it may sound, contains a huge contradiction. He details how the grower meetings are a sham, how the cooperative is coming apart before our eyes and how even now, with a crying need for greater participation, people are still afraid to identify themselves. Then he concludes that the only way to change it is not to change anything. "Keep the company grower owned and grower run," is a slogan with no argument backing it up and no credible scenario for improving returns. Just two points now, Linda, and I will take up other points with Mr. Jonjak at another time. 1. Think, Linda, how receptive farmers are to machine technology -- we are always eager to try the newest kind of pump or harvesting machine or mower. No one would think of going back to the wooden scoop for harvesting cranberries. We are familiar with machines; they don't frighten us; we feel capable of mastering incremental improvements on a yearly basis. We are ready to improve our productivity on a moment's notice. But talk about changing a corporate structure in order to adjust to a changing reality and growers will cry, "Hell no! If it worked in 1948, it will work forever!" It's not the danger of restructuring but the unfamiliarity that makes us afraid. 2. The assumption that only an all-farmer Board can run the company goes against common sense. If having outside directors is "desperation," then 99% of all major corporations are desperate. A big company needs several skills represented on the Board -- marketing, finance, operations, public relations etc. Read a few annual reports and you will learn this very quickly. Proctor & Gamble, for example, has a 17 member Board that includes several CEO's from other companies (one is a rocket scientist), a couple of college professors (one a former U.S. cabinet member) and the CEO of the Nature Conservancy. Even oil companies, which are fairly simple, if technically demanding businesses, have college professors and consumer packaged goods executives on their Boards. Once you acquaint yourself with some of these facts, the proposals people like me are making won't seem so scary. You can download annual reports on your computer from company websites, free of charge. I suggest you start with www.pepsico.com Tom Gelsthorpe Re: Re: Randy Jonjac's letter strikes a cord. 208.140.0.138 writes: I see Tom says he will take up a few points with me later, but I want to respond to some of his comments in case I don't check back for a while. You use Proctor and Gamble as an example for your ideal board. This is somewhat removed from Agriculture. Can you give me an example of a global-scale company which has absorbed a farmers group and prides themselves on sending them a tidy return on their produce? To the contrary, I think some home work will show you how Coke treats farmers it has absorbed through acquisitions over the years. When I think of farmers who are well paid for their produce, I think of Crystal Sugar, Blue Diamond Almonds, Sunskist Oranges, maybe Florida Naturals who seem to have a good ad campaign going. To my knowledge, these are all grower's co-ops. Maybe you can name some farmers for me who are flourishing under another set up, but I am unfamiliar. On the subject of outside directors, I assume Tom will address my questions of what
incentive an outside director would have to serve on our board, and what his loyalties
would be.
Re: Randy Jonjac's letter strikes a cord. 204.214.112.195 writes: Randy Jonjac's letter makes several good points about our company, but I agree with Linda that a lot of the farmers haven't got time for the slow changes that the board may or may not make. The Massachusetts farmers aren't the only ones in trouble. I have heard that as many as 30 farms here in Oregon are either in foreclosure or very close to it. When the board meets in a few days I hope they will take the necessary steps to try to get our company turned around before its too late! Does anyone know if we have a legal right to know how the board members vote in regards
to the CEO?
Re: Randy Jonjac's letter strikes a cord. 216.41.49.109 writes: Correction to my earlier message on this topic. The website to visit for Pepsi financial information, including annual reports is: Pepsico Other interesting companies' websites are: Cocacola and Unilever Tom Gelsthorpe
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