Who will decide the future of Ocean Spray?
For the past few months, the single most puzzling question that many cranberry growers have been asking themselves is: why does the Ocean Spray Board of Directors seem hell bent on leading the company to destruction? Each action the Board has taken, from following management's lead in paying greater attention to competitors' strategies than to their own, to attempting to shift blame for the situation onto either an oversupply or to disloyal growers, to minimizing serious weaknesses in getting product to customers (many of whom are now former customers), to flat-out deception and lies seems to fly straight in the opposite direction of what logic, basic business wisdom, and simple respect for the owners who elected them would dictate. Is there a reason why they are doing this? The reason for the current crisis, like most everything in life, is complicated. It's due to a lethal combination of factors including:
Since Tom Bullock became CEO, the cooperative has behaved as it it were on a war-time footing. It was panicked by fear of independents gaining market share. Ocean Spray was "aggressively defending its turf" against other cranberry companies, ignoring the reality so clearly articulated by James Tillotson and others: the ultimate winners in the food and beverage business will be those companies who market with vision and intelligence at home and abroad. Tom Bullock's pronouncements were filled with phrases like putting "an aggressive plan in place to slow competitive inroads", being "vigilant about guarding our business interest" and "facing the competition head-on." In his mind, this was war with the independents, and he was thinking and talking like the Commander-in-Chief. He sued Pepsi with such recklessness that although the judge ruled that Pepsi was in the wrong, the decision blasted Ocean Spray for the amateurness of its lawyers. Ocean Spray needlessly squandered its resources in wars that should never have been fought. In the process Ocean Spray lost the core consumer and, aside from in the U.K., lagged dismally behind other companies in opening markets in other countries. The enemies, besides the so-called independents, came to include former owners who bolted the company and helped Northland and others to gain a greater market share, split contracts, second preferred shareholders, and finally, any owner asking questions. Management enlisted Board members in their wars, playing on each man's pride in his cranberry heritage and his ego. Most members of the Board became convinced that withholding information from growers was in the best interest of Ocean Spray. Some did so reluctantly, while others did so in earnest because it made them feel like part of an elite club distinct from and superior to being "just farmers." After the February meeting, when the Board should have been outraged that they were deceived like rest of the "ordinary" owners, they were co-opted again. How did this happen? This is when management convinced the majority of the Board to accept the escalation to a siege mentality. Faced with a crisis whose gravity only upper management knew at the time, they convinced the Board that the enemy was on the outside, determined to destroy the company, their cranberry dynasties, and their pride. When under siege, it is acceptable to do whatever is necessary in defense, so the rationale goes, even to deliberately lying to people whose vital interests are at stake. But something far worse was in the offing as Management errors continued. The most extraordinary is keeping Tom Bullock not just as a figurehead CEO, but as the actual leader of the cooperative. There were, and are, other options. The confluence of events over the last month has finally led to a bunker mentality. More and more information has been made available to Ocean Spray owners, to those in or affiliated with the beverage industry, and to the general public, about mismanagement . The mainstream media is catching on that the plummeting price price per barrel was not caused by a surplus in the freezers; but in fact the surplus itself was caused by gross mismanagement and lack of strategic planning at Ocean Spray. With growing debt, there is even the possibility of an attempted hostile takeover, with the most trusted and valuable name in juice beverages being bought at a fire sale price. Instead of facing the reality and need for drastic change in business as usual Ocean Spray owners see quotes from OS spokesman Chris Phillips saying that "doing nothing" is still an option. With Ocean Spray management and the majority of Directors barricaded in a psychological bunker, their vision is myopic. While Ocean Spray owners outside the Boardroom see options for saving Ocean Spray, their farms, and the industry, those inside might as well be locked behind steel doors and sound proof walls. The time for status quo is over. The owners who have lost control of their company need to do one thing: take it back. Individual Board members who do not see "doing nothing" as an option need to come forward. Bain should issue as complete a report as possible which can be shared with all owners without jeopardizing their interests. Owners from all regions need to come forward, get together , and reassert control. When a plan for doing that is offered to you, join in. It can be done.
August 22, 1999 Click here for ready to print version
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