If we don't build it, they will come

1/14/2000 James Tillotson, Tom Gelsthorpe and others have said it. Yesterday at the Cranberry Marketing Committee meeting, Ed Gelsthorpe, a former CEO of Ocean Spray (and Tom's father) also said it. "The only cranberry companies that will compete successfully in the 21st century are those who are successful marketing internationally."

Ed Gelsthorpe pointed out that a volume restriction to stabilize the supply-demand equation was only a short term solution.

In the future, with new acreage coming into production, and more anticipated here and in Canada, Chile and Europe, cranberries will flood the worldwide market. Nothing short of a miracle could lead to these berries being consumed in existing markets.

Business abhors a vacuum. The untapped global marketplace is a giant vacuum just waiting to suck up all the cranberries that can possibly be grown for decades to come.

If we don't build the global marketplace, and by we I mean the existing American cranberry industry, they will come and do it for us. By they, I mean any international corporation with the know how, capital and existing distribution network to move decisively and judiciously into new overseas markets.

As an example, Pepsi, having failed in it's overtures to purchase Ocean Spray, could decide to add cranberry to the Tropicana line they are already taking global.  Pepsi could be supplied by  the independents, who would expand by adding contracts with growers who are leaving a decimated Ocean Spray, or a new business entity could be formed just to meet the demands from Pepsi.

Just as Ocean Spray has been the dominant player in the domestic cranberry market, Pepsi would soon dominate the global market. As international demographics change and more and more populations become middle class, Pepsi's cranberry division would move closer and closer to Ocean Spray in size.

Any global  food company, from P&G to Cadbury Schweppes, could take advantage the errors made by Ocean Spray. As we know, instead of focusing their energies on going global and selling to new customers, Ocean Spray choose to battle the independents for existing customers, buying Nantucket Nectars in the process, bringing out Wellfleet Farms, and spending the lions share of their advertising budget in the United States.They compounded these errors by not opting to sell the company to a corporation which would take them into international markets.

All is not lost. Ocean Spray could still be sold to a Pepsi, Quaker, General Mills, Campbells, P&G, or Cadbury. These corporations would be able to market the surplus overseas and balance the supply-demand equation by opening new markets as the berries became available. One, or several, of the independents could also be sold to a global company, and almost overnight become a true rival to Ocean Spray.

For the cranberry grower in the United States, any of these outcomes should offer hope for the future. Companies may come and go. But, as any grower knows, we plant our vines to grow for a hundred years or more. We have a fruit that is healthy and tasty which will be quenching thirst and nourishing people until such time as all foods are made in the laboratory. Somebody will buy the berries and take them global. Ultimately, cranberry growers who can hang on through this crisis, will make a good living again.

The only losers will prove to be those hidebound twentieth century executives who didn't have the wisdom and vision to move into the twenty-first century.

HB