Grower-owners of the Ocean Spray cranberry cooperative have rejected a resolution, at the company’s 70th annual meeting in San Diego, calling on the company’s board of directors to explore a possible sale.
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A handful of the 900 growers in the cooperative have consistently lobbied the management of the Massachusetts.-based Ocean Spray to consider selling the brand in response to increased competition from industry giants, Coca-Cola and PepsiCo. Other growers voted 2-to-1 to reject the resolution.
Last year, three cranberry growers filed a lawsuit in Plymouth Superior Court accusing the cooperative of trying to force poorer growers out of business for their own profit by rejecting advice to sell the company.
“Obviously, we’re disappointed in the vote,” said Bob Stears, a spokesman for New Jersey-based A.R. DeMarco, one of the plaintiffs. “We’re going to get together in the course of this week and make a determination of what our next move will be.”
The rejection of the sale was a victory for the management of the company. “Growers want to keep this company in their hands and maintain the family-farming way of life that has defined them as people – and Ocean Spray as a brand – for more than 70 years,” said Ocean Spray chairman Sherwood J. Johnson.
Supporters of the move to sell the cooperative accused management of ‘nostalgia’ and interfering with what is ‘good business sense’.
In 1999, the Ocean Spray board rejected a sale. Profits fell 45% to US$73.5m last year, well below the US$280m reported in fiscal year 1998. The company expects net earnings for grower-owners to rise US$81m to US$140m this fiscal year.
Ocean Spray produces a variety of cranberry juice products but also promotes cranberry as a food ingredient.
