Few harvests can match the stark beauty and rich color of cranberries in the American northeast. The state of Wisconsin may have perfected the mass production of this annual crop, but you can trace the berry’s roots and history back to the bogs of Massachusetts.
Stretching across 14,000 acres of annually-flooded fields, Massachusetts farmers are 2nd in the nation in cranberry production and the red fruit accounts for nearly one-fifth of the state’s entire farm production revenue.
Some growers harvest the original cranberry vines planted by their ancestors more than a century ago – as the annual crop doesn’t call for replanting in the region’s sandy topsoil. But farmers caution that the berries require a bevy of inputs and year-round maintenance.
Gary Garretson, Cranberry Grower: “In January when a corn farmer may be repairing some equipment, we are out maintaining sand on the bogs and seeing how they’re putting up with a harsh winter. We’re managing our properties 365 days per year and I haven’t seen any corn plants that are approaching 80 years old and here my cranberry plants are still very productive after 80 years.”
Fourth-generation cranberry grower Gary Garretson, has toiled in his family’s cranberry operation since the 1970’s and it’s clear the trade has been perfected over the years through modern technology and ingenuity.
As fall approaches, the massive acreages are flooded one-by-one. Field workers, operating “beating” machines run multiple passes through each bog – literally shaking the cranberries off the vines and into the rising water.
A team of hired hands corral the red fruit into concentrated circles, starkly visible from hundreds of feet above. Powerful pumps suck up the floating fruit, pressured water strips away much of the remaining leaves and chaff, and the berries are dumped into nearby containers.
Truckload after truckload of Garretson’s crop will eventually arrive here….at one of Ocean Spray’s massive collection facilities which run non-stop from late September into November.
The imagery of a bountiful harvest evokes a sense of prosperity for the cranberry industry but a decade-long economic roller-coaster has buffeted the pocketbooks of growers, and for many farmers, THEIR parent cooperative Ocean Spray.
Randy Papadellis, CEO – Ocean Spray: “10 years ago. The industry was going through an oversupply. The price of cranberries had crashed to about $10 per barrel. We literally announced that price the week I joined the company. There is no average farm but if there is the price would have been $18 per barrel so everyone was losing money.”
“That kicked off a period of years of uncertainty and four CEOs in four years – I was the fourth.”
Randy Papadellis first came to Ocean Spray as Chief Operating Officer in 2000, and was then appointed CEO in 2003, amidst a swarm of grower resentment towards dwindling profits and a company teetering on the edge of a potentially aggressive takeover.
Randy Papadellis, CEO – Ocean Spray: “You had about half of the growers that wanted to rebuild the company and another half that wanted to sell off to a large buyer like Pepsi or Coke so they could realize more value.”
Ultimately, growers narrowly chose to spurn the Pepsi bottling takeover and embrace a new long-term marketing strategy for the world’s largest producer of cranberries. A host of increased marketing efforts launched for the popular dried cranberry snacks Craisins, cranberry energy drinks, and a fresh variety of blended offerings that have bolstered the bottom line.
But unlike other food and beverage companies, Ocean Spray’s shareholders are its 750 farms. The cooperative strains to maximize the value of its most prized commodity as opposed to other end users that bargain for the cheapest market price.
Randy Papadellis, CEO – Ocean Spray: “We in a sense try to maximize the cost of our raw materials. I have a lot of friends in the consumer packaging industry and when I try to describe to them that I actually try to maximize the price of our largest raw material – that’s a little difficult.”
As businesses across the country cope with the fallout from the Great Recession, the cranberry industry is now faced with its latest wave of oversupply and according to Papadellis, a nearly all-time low commodity price for cranberries.
Randy Papadellis, CEO – Ocean Spray: “The difference this time is because of our investments we made ten years ago and the strength of our business we are in 180 degrees opposite position in regards to the Ocean Spray brand. The Ocean Spray growers will receive the highest return in the history of the cooperative on the crop we are harvesting right now. The independent growers may see the lowest return. It’s created quite a dichotomy in our industry.”
That gap between those inside and outside the cooperative has created tension throughout the industry.
John Decas, Decas Cranberry Products: “When a cooperative controls 65 percent of the tonnage and the market they do decide a lot of things.”
John Decas, whose family first dabbled with cranberry production in the 1930’s, now represents his namesake company. The collection of more than 150 growers and 500 acres of bogs have long carved a niche into the Ocean Spray-dominated industry. Decas contends the latest glut of berries is due to poor planning and further amplified by juice blending practices.
John Decas, Decas Cranberry Products: “They started putting less and less product into their juices. If there is a shortage then that is one thing but we have an oversupply and the growers are getting hammered as a result. And they aren't passing the profit on to consumers. They're putting it in their pockets.”
Ocean Spray’s Papadellis contends the blend of cranberry concentrate and other juices isn’t linked to supply but instead driven by consumers.
Randy Papadellis, CEO – Ocean Spray: “Some believe it serves us better to put more cranberries in the bottle. Everything we do is based on consumer research and our goal is not necessarily to put the most amount of cranberries in the bottle but to sell the most amount of bottles. And when you do that the benefit of that is your maximizing your business and you sell more cranberries.”
Like their heavyweight competitor, Decas has heavily marketed their sweetened dried cranberries – known in the industry as SDCs. The mid-sized operation also is bullish on its latest venture…Fruiticuticals. The nutrient-infused berries are aimed at the health-conscious consumer by marketing the medicinal properties of cranberries.
The Decas Fruiticuticals are pumped full of previously leftover antioxidant-rich cranberry material. The move is just the latest step in squeezing every dollar from every berry.
John Decas, Decas Cranberry Products: “If we’ve learned anything it’s that you can’t stand still. You wake up one day and you realize you have too many cranberries. And when the price got high the companies started putting less content in there juice. And suddenly you wake up and you have too many cranberries and the price plummets. You have to grow your way out of it and open up new markets. Were successful getting into Asia.”
Expanding markets is at least one thing the overall industry may agree on. Ocean Spray has sought a consumer foothold in countries ranging from Western Europe to East Asia. The efforts could bolster demand for the largely North American fruit but regardless of the outcome cooperative members like Gary Garretson contend Ocean Spray is more than an end user of commodities.
Gary Garretson, Cranberry Grower: “It’s not just a contract. It’s a relationship. We don’t just sell them a crop for the highest price. I feel it completes us as a farm and I can concentrate on my farming and not on my marketing.”
Cranberry production in 2011 is shaping up to be the second largest on record. USDA claims 7.5 million 100-pound barrels will be collected, up 10 percent from a year ago…leaving marketers like Decas and Ocean Spray to find a home for all those berries.
For Market to Market, I’m Andrew Batt.