The nearly 1,000 cranberry and grapefruit growers who own Ocean Spray yesterday rejected by an overwhelming majority of votes a push by some of its members to move toward a sale of the company.
Growers attending or sending proxies to the Cooperative’s 70th annual meeting voted 2 to 1 in opposition to a resolution calling on their board of directors to instruct management to explore a possible sale of Ocean Spray, the nation’s number-one brand of canned and bottled juice drinks.
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Ocean Spray’s grower-owners opted instead to continue with a turnaround plan already beginning to gain traction in the marketplace. That plan is projected to more than triple financial returns to cranberry growers within the next three years.
“The growers of Ocean Spray have spoken,” said board chairman Sherwood J. Johnson. “They want to keep this company in their hands and maintain the family-farming way of life that has defined them as people — and has defined Ocean Spray as a brand — for more than 70 years.”
Under the weight of a burgeoning surplus in the late 1990s, Ocean Spray’s cranberry growers received less than $11 per 100-pound barrel of fruit they delivered in the fall of 1999, a dramatic drop from the record $60.50 per barrel returned in 1996.
However, a turnaround plan engineered by former Pillsbury chief Rob Hawthorne, who was hired one year ago as Ocean Spray’s CEO, already has begun to reverse the company’s slide. With market share holding steady and a flurry of 21 new product entries hitting the marketplace this year, net earnings for grower-owners are on track to rise to $140 million this fiscal year, an $81 million jump from last year.
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By GlobalData“The tide is beginning to turn,” said Hawthorne. “This new endorsement from our grower-owners is just one more signal that Ocean Spray is on its way back to being the best juice company in the business.”
The crop Ocean Spray growers harvested this past fall is expected to generate roughly double their 1999 returns — a range of $20 to $25 per barrel. By the 2003 harvest, cranberry returns at Ocean Spray are projected to exceed $40 per barrel.
Ocean Spray’s board of directors is exploring a range of options — including possible joint manufacturing and distribution ventures with other companies — to create a new layer of earnings for Ocean Spray cranberry growers, above and beyond their traditional returns per barrel.
One key to Ocean Spray’s turnaround is a second-year federal limit on cranberry production this fall, a move which USDA and other agricultural economic experts believe will correct the current imbalance of supply and demand.
An alternate slate of four board candidates was soundly turned away by shareholders voting at today’s meeting. Those openings on the company’s 15-member board were filled by the slate recommended by the board.
The group which today rejected the push toward a sale of Ocean Spray is made up of growers large and small, representing a cross-section of growers from all cranberry-producing regions: Massachusetts, Wisconsin, New Jersey, Oregon, Washington, British Columbia and other Canadian provinces. In addition to 804 cranberry growers, Ocean Spray is owned by 126 Florida grapefruit growers, who also weighed in on today’s decision.
Board chairman Johnson said the decision was driven as much by the desire of growers to maintain the family-farming way of life as it was the need to restore profitability for themselves and their brand.
“Ocean Spray is more than a brand and more than a business,” said Johnson. “It is way of life our growers have known for generations, and we’re not going to abandon it by selling out.”
The above information includes certain “forward-looking statements” about the Company’s future plans and goals. These statements are based on management’s knowledge and expectations at the current time. Whether or not these forward-looking statements will be accurate in the future will depend on many factors, including risks and conditions in the markets where the Company competes, the cranberry and grapefruit industries and the Company’s future performance.
