The Cranberry Stressline Forum
debate from Oct. 22 to Nov. 5, 1999

IF WE SELL WE LOSE CONTROL, RIGHT? WRONG!

by Nabiel Shawa

Friday, 22-Oct-1999

Perhaps the most frequently asked question amongst Ocean Spray Grower/Owners after the "Are we going to sell?" question is the "How are we going to obtain a fair price for our fruit if we do sell?" Some less than open minded grower/owners, including our gloomy chairman, contend that if we sell we lose control. Further, many of these same folks claim that the corporate raiders could then hold us hostage and pay us a pittance for our crops (one could counter that this is the current situation).

If one sets aside their emotional attachment to our co-op and examines the situation from a business standpoint the most reasonable conclusion is the exact opposite. The scenario set forth by the more progressive thinkers within the Ocean Spray family calls for the sale of the label and related infrastructure while retaining our co-op to handle, store, and negotiate the sale of our fruit. We would not be negotiating from a position of weakness. Although our market share of red juice drinks has dropped to the mid-fifty percent range we still produce and control approximately seventy percent of all cranberry production. And we thought OPEC had a cartel!

Now put yourself in the shoes of an executive team desiring to buy our label and production facilities. What do you think their most significant concern is? Is it the selling price of the label and facilities, or the amount of outstanding debt, or the ability to increase market share or international sales? I don’t think it’s any of these. My most significant concern would be tying up the fruit necessary to fuel this investment in order to increase market share both domestically and internationally. The biggest fear would be the bargaining power of an entity that controlled seventy percent of the raw production material. After all who could I turn to to provide a consistent supply of high quality fruit year after year if negotiations with existing Ocean Spray growers collapsed? Just for simplicity and efficiency I would prefer to deal with one organization rather than sending out a team of field representatives each year to individually negotiate price and delivery terms. And while there is presently a surplus, I have to remember that if we’re successful in significantly growing the market share (domestically and internationally) such success will attract the attention of my competitors who may show up in the fields next year bidding for that rare fruit to fuel their new product line. Therefore it would be in my best interests to insure that Ocean Spray growers received a fair price and perhaps slightly more than others. Better to establish a long term, friendly, stable relationship with the primary source of this unique commodity than to face frequent, sometimes heated negotiations which increase the likelihood that my competitor could someday skip away with it.

This viewpoint is not far-fetched. I have no doubt that this exact scenario is being discussed by every serious suitor speaking with our Merrill Lynch representatives.

There are examples of large agricultural organizations who have very long term, successful relationships with international corporations. As one example I have an acquaintance in Singapore whose family owns the world’s largest cocoa plantation. For numerous years they have sold to Cadbury and prospered. This successful relationship works for many of the reasons outlined above. The buyer wants a large, reliable source of a unique commodity and is therefore willing to pay a reasonable price to secure it for the long term.

The Ocean Spray Grower/Owner family has a tremendous opportunity to secure many years of prosperity. Think it through for yourself. If we sell and stick together we will enjoy the best of all possible options.


Response: Tom Gelsthorpe
Saturday, 23-Oct-1999

Mr. Shawa has performed an extremely valuable service by explaining how a well-thought-out, post merger, two-part structure might work. The example of the family that raises cocoa for Cadbury is good, too. I hope that other participants in this forum can come forth with examples of long-term contracts that benefit both parties. We needn't think that structural change will bring fruit price collapse and leave growers helpless. As Mr. Shawa points out, you could argue that the present arrangement has already done that.

It's past time for imagining that past glories can somehow be revived, or that simply recapturing domestic market share will use up the volume of fruit now available. Northland has bitten a big piece out of us (O.S.) and taught everyone a lesson, but they're not yet powerful enough to alter the balance of power with retailers or storm the ramparts of international markets without help. We should concentrate our mental energies on seeking modernized arrangements that can renew prosperity for the growers in a more sustainable and balanced way. O.S. got as far as it could with the limitations of coop financing -- a relative handful of excellent products are well-known throughout North America. Now we can grow more than we can sell. Rather than go backwards and curtail growing, let's find a major marketer who can bring our products to an international consumer audience.

I hope we hear more from Nabiel Shawa, and enjoy more participation from other people who are thinking ahead to the next stage of growth.

Response: "Business Person"
Saturday, 23-Oct-1999

12.18.241.87 writes:

This posting is clear evidence of the intelligence that exists within the grower community. Some good questions are presented for the Grower/Owners to consider and I would like to make a comment. What is the fair price for a barrel of cranberries? $60.00 ... $40.00 ... $25.00?

I am not well-versed in the cost to produce a barrel of cranberries, but I believe that this will drive the market price long-term. Is it reasonable that a pound of cranberries sells for more than a pound of raspberries or blueberries? The stable pricing that Ocean Spray growers have enjoyed for 25 odd years is unique to the agricultural industry. Are the growers prepared to adjust their thinking about a reasonable return for their crop?

I agree that a long-term relationship between the growers and the theoretical new owner of the OS brand and facilities is a strategy that will work, but at what price. The leverage will only last until the price to the grower allows a "reasonable" return on investment for the efficient farmer. The smaller farmers will struggle with price fluctuations, new bogs will be planted as long as the investment is attractive to the farmer, supply and demand will find a balance in the open market.

What price is fair? Are the growers willing to accept the transition to the cycles that most agricultural commodities face? The co-ops position is strong, but it is not the monopoly that once existed. Mr. Shawa, what is your feeling about a fair price for cranberries?

Response: Nabiel Shawa
Sunday, 24-Oct-1999
"...........slightly more than others."

Response: Anon.
Saturday, 23-Oct-1999 22:49:16

63.21.164.25 writes:

You will become a vendor of raw materials to the corporation that buys the intangible assets of Ocean Spray. This corporation will purchase cranberries at the lowest possible price at all times. If that vendor is in US, Canada, Ireland, Chile, etc.,, WHEREVER. The purchaser won't give a damn about from whom they buy the cranberries.

Response: Nabiel Shawa

24-Oct-1999

"The biggest fear would be the bargaining power of an entity that controlled seventy percent of the raw production material. After all who could I turn to to provide a consistent supply of high quality fruit year after year if negotiations with existing Ocean Spray growers collapsed?"

You're assuming market power continues...
Sunday, 24-Oct-1999

128.119.99.203 writes:

The argument to divest the marketing arm of OS is strong and well stated. However, I'd like to play the Devil's Advocate and question the assumption of OS maintaining 70% market power into the future. Suppose this assumption FAILS in the future because it will be very difficult to maintain a cartel (OS) when the cartel is comprised of many, many players (growers).

The rise of Northland has shown that growers will leave OS if outside handlers are offering a higher price. Thus, the company that acquires OS must simply pay more to independent handlers to steal growers from OS and spur further expansion. Then, a surplus will build (sound familiar?), OS will be weakened by exiting growers, and the resulting drop in barrel price will play right into the hands of the multinational company that now owns OS!

Now, lets go one step further and consider the impending growth of foreign acreage in Russia, Ireland, Chile, even Canada...these countries have lower costs of production (in some cases MUCH lower) than we in the US have. US cranberry growers cannot compete with these countries, much like US corn growers cannot compete with Brazilian corn growers. Once cranberries become an "unprotected" commodity US growers will be in big trouble. Only the largest , most efficient growers will survive and cranberries will go the way of corn, soybeans, etc.

Now, maybe this is doom and gloom, but it is very possible in the long run (maybe only 10-15 years from now). The bottom line here is that OS does not have enough money to expand internationally in the same way that Pepsi or Coke can. However, selling the OS brand may be shortsighted. It should be a last resort.

Re: You're assuming market power continues...
Monday, 25-Oct-1999

216.41.49.101 writes:

You are describing as future risks things that have already happened: "Growers will leave OS if outside handlers are offering a higher price." "A surplus will build." "OS will be weakened by exiting growers." "Consider the impending growth of foreign acreage." "Once cranberries become an 'unprotected' commodity, US growers will be in big trouble." All these suppositions of yours are not possibilities; they are established trends. We have to deal with reality as it already exists, not pretend these things have not yet happened. The crucial challenge that merger advocates are dealing with now is the financial survival of current growers. If current growers receive stock in the company acquiring the brand name, they can profit from the future growth of the business through growth in the value of the stock -- not solely from a berry price. If the current surplus is sold successfully by a better-funded corporate parent, stockholders would benefit from production wherever it occurs, in "traditional" areas and new ones. If the surplus is not sold, current growers are sitting on devalued real estate, devalued investments in buildings, plants and equipment, devalued stock and declining prospects for improvement. You seem to ignore or misunderstand this. Currently at OS, the processing and marketing function is so pathetic that it SUBTRACTS from the berry price; the proof is the much higher price independents have received for the last five years and continue to receive now. None of the opponents of merger, including you, present a credible scenario for selling the current oversupply or restoring the price advantage to OS growers under the current structure. Whether foreign producers, other handlers, or substitute products are the gainers from this dysfunction, the result will be the same -- Ocean Spray will continue to shrink relative to the competition. A vote to change nothing is a vote for imminent self-destruction. OS growers voting to destroy each other -- which the Chairman seems to endorse -- will accelerate the shift to other handlers and other areas, not retard it. Your "gloom and doom" scenario about corporate and geographic shifts MIGHT occur, according to your own prediction, "10-15 years from now." What should a sensible person prefer? To be hanged tomorrow for certain, or possibly be hanged 10 years from now? And a sale most definitely should not be put off until it is a "last resort." That reduces the price. And how would you define "last resort"? After hundreds of growers have "exited" and lost the chance to be rewarded for their current stock holdings? After a few more CEO's have bumbled their assignments and retired with juicy pensions for their efforts? Until OS is such a small segment of the business that it's irrelevant? Until years from now, when two or three cranberry handlers have grown larger than OS, Europe and Asia are lost possibilities, and Chris Phillips is still issuing vacuous statements about recapturing market share?

The whole tone of your message seems to assume that restructuring is inherently bad, that global growth is more problematic than promising, and that the halcyon days of the mid-80's can somehow be recaptured and frozen in amber. Who are the dreamers in this debate and who are the realists? The stick-in-the-muds who fear all change and think the world can somehow be stopped in its tracks? Or the forward-looking people who believe that corporate dynamism is a reality that growers can adapt to and profit from?

Response: You're assuming market power continues...from John Edwards
Monday, 25-Oct-1999

I understand that the scenario I have predicted is currently happening - that is exactly why I made the statement! If OS divests the marketing arm of the coop to a much larger company (like Pepsi or Coke), the parent company MIGHT eliminate the surplus through global markets. If the surplus is eliminated we win. But even if we win, prices will go back up and the parent company will have incentives to stimulate over-supply at which point OS growers will have little leverage to deal with (see end of next paragraph).

But back to the present situation. There will soon be almost one full year's worth of berries in freezers, an amount that will not disappear overnight and certainly not fast enough to save the most financially vulnerable growers. Furthermore, if OS merges with a larger company, the growers who were MAJORITY shareholders in OS will now be MINORITY shareholders in the parent company. That may seem like a small detail, but it is cause for concern because the majority shareholders in the parent company will not want to pay higher prices to the OS handling coop. They will do all they can to weaken the coop, including paying higher prices in the short term to independents to stimulate another oversupply situation.

Does this sound like a good scenario? When I think of the merger option, it makes me very nervous because OS will be going to bed with a larger and more powerful corporation. Unless the terms of the merger are highly favorable to the growers in the long term, I do not believe it is a sound decision. The whole reason the industry is in this mess is because of short-term thinking to the effect of "Hmmm...$80 berries? I'll take that second mortgage and put in more acres." OS was created with long-term visions and there have been downturns in the past. Sadly, growers went out of business then and they will now.

Tom, we may not agree on the future direction of OS, but I hope that you can see the reasons for my concern. Unlike most farmers, cranberry growers (ALL growers, not just OS growers) benefit from the direct marketing link that OS provides. Yes, it is inefficient at the moment, and embarrassingly so. However, this situation can be corrected with proper management. As the Bain report stated, the main problem at OS is poor management.

To address issues of solvency and undercapitalization, perhaps the solution is to break the marketing arm of OS away from the handling side of the coop. Issue an IPO for the marketing arm, restricting the majority of shares to be held by growers. This way, the growers retain control in the long term and OS raises capital for market expansion. I have to admit that this is only an idea and I don't know if it is possible, but here it is - you said you wanted ideas.

One last note - going back to what Business Person said a few weeks ago - the most obvious merger is with another coop like Welch's or Treetop. This makes sense on many levels, the most important of which is that the shareholders all share the same goal - greater return for the grower. Also, a merger with Welch's would provide operations efficiencies and greater control of the juice market without sacrificing grower control. However, in the long term, you may again have these problems of undercapitalization because of the coop nature of the company.

Bottom line here is that OS is a rarity in Ag. Protect that brand as much as possible because once it is sold and gone, it is gone forever! It is worth more tomorrow than it is today, and it is the greatest bargaining chip that the growers will ever have.

Response: Tom Gelsthorpe
Saturday, 30-Oct-1999

Yes, Mr. Edwards, I share your concern about "the future direction of OS." Do you share my concern for the financial survival of current OS growers? Readers of the Stressline should be skeptical of "Business Persons" and others whose identities, alliances and agendas are unclear.


Your apparent preference for preserving the status quo offers no credible plan to restore the Ocean Spray advantage for growers. "ALL growers" do not benefit from the "direct marketing link that OS provides," nor is this link only "inefficient at the moment;" it is long-term. Ocean Spray growers' berry price has been lower than independents for over five years and the discrepancy in percentage terms is the largest ever. In effect, Ocean Spray is run like a charity whose principal beneficiaries are non-members. Those beneficiaries are all too happy to take their freebies and keep gaining on the fallen elephant at OS growers' expense. Worst of all, OS seems willing to oblige them. Both Northland and Decas have told their growers they expect to maintain their price advantage. Prominent OS Board members, including the Chairman, have made remarks to newspaper interviewers -- although not directly to growers -- indicating that if growers go broke, that's just too bad; but trying to change anything systemic at corporate is virtually unthinkable. OS propaganda maintains that the current modus operandi is the best arrangement because only a coop "cares" about the farmers. If this is "caring," what would NOT caring be like? Moreover, how does the willingness of OS growers to absorb the most punishment strengthen our "bargaining chip" or demonstrate to outsiders our seriousness of purpose?


Your grimmest apprehension appears to be that in case of a merger, OS growers would be minority stockholders in a big corporation rather than majority stockholders in a coop. First of all, no single OS grower is a majority stockholder in anything but his own farm. And again, even if collectively we are majority owners of OS, what good has it done? Have OS growers deliberately chosen to lose money so that others might prosper? An overwhelming majority voted to fire Bullock and he's still there, continuing to lay waste to current operations and future prospects, continuing to draw a paycheck, vest his pension, protect incompetents and send out his minions to gull the growers into thinking that Tinkerbelle will wave her magic wand any day now, and restore our "category defining" position. More importantly, your apprehension about "minority" ownership begs the question: "Which is more valuable -- minority ownership in a strong, growing corporation or majority ownership in a weak, declining one?" If you'd bought five million dollars worth of Proctor & Gamble five years ago, you'd still be small fry at a stockholders meeting; you'd be dwarfed by institutional investors. Nevertheless, your $5 million investment in 1994 would be worth about $18 million today. That kind of "uncaring" minority interest sounds a heckuva lot better than ownership of a company whose implicit purpose appears to be self-destruction. I ask you, what is more dangerous: "Going to bed" with a growth company? Or competing with several of them, unaided even by our own putative leaders?

You still seem to be living in the past. You seem to count financial strength only as a berry price, never in terms of stock ownership, although you have no program to increase berry price and nothing to say about stock appreciation. Based on berry price alone, growers have only two ways to survive -- 1. Tap other investments they have already made or 2. Grow more fruit. The first way is practicing what merger advocates would like to make possible for all the OS growers -- get some of the eggs out of the one basket and into another source of wealth. The second way will depress prices even more and accelerate the downward spiral. You show a preference for a multi-coop merger as a way to "maintain control." Supposedly those awful corporations will "weaken the coop." As things now stand, is the coop even "in control" of itself?

Bain is very likely correct in asserting that poor management got OS into this mess, but it does not automatically follow that a change in management will get us out. If you sleep through a spring frost night and lose the crop, you can stay up all summer but those ruined buds will not produce. The oversupply is now sufficiently immense that better management, better distribution AND MORE CAPITAL are required to sell all the fruit. A major consumer packaged goods company could furnish all three in a single stroke. In that case, the oversupply could be transformed from a coop's burden into a corporation's opportunity; from a glut that threatens to shift the industry to reverse, into a chance to open new markets and pave the way for future growth. The same thing has happened during the growth pains of many industries. Oil would not have become the worldwide fuel of choice if giant corporations hadn't arisen to refine and market it, and build machines that use it. Europe would be awash in olive oil if they hadn't taught the rest of the world to love it. New Zealand would be awash in kiwifruit; Costa Rica would be awash in bananas;
the Philippines would be awash in pineapples. None of these foods attained worldwide popularity through the promotional efforts of funky little coops. Cranberries are still a local, cottage industry compared to what is possible, but what is possible will never be achieved if we cling to the past.

Response: Linda Rinta
Sunday, 31-Oct-1999 06:52:40

Tom, That was by far your best! Put it on as an op-ed.

Response: Business Person
Sunday, 31-Oct-1999 11:26:55

Mr. Gelsthorpe is correct in questioning my, and other anonymous contributors alliances. I can only state that the opinions I express are legitimate concerns for the future of the cooperative. I have friends within the Ocean Spray family for whom I wish long-term success. I can also confirm that my frustration with management's philosophies and direction was one of the reasons I left the company.

With that said, I will reiterate my concern that the long-term price of cranberries will change with a sale to a large food company. I strongly agree that world marketing is critical for the future of cranberry products and that this market is untapped. Yet, will the North American Grower benefit from these increased markets? Maybe in the short-term, but the longer term prospects of international production in Chile, Russia, and maybe China will surely negatively affect the higher cost production in the U.S.

This has been the case with South American and, more recently, Chinese apple concentrate. The difference is that the apple grower makes money with their fresh crop and can afford to take reduced returns on processed product. This is not the case for the cranberry growers.

The same is true for Eastern European and South American raspberry concentrate. Ask the North American raspberry growers about their returns on juice stock raspberries the past few years.

My point is that the growers must decide between "cashing out" their ownership and the longer-term prospects of successful farming of the cranberry. It may be the right time to cash out and gamble on another company marketing the cranberry internationally effectively. I have a hard time believing that a Pepsi or P&G will devote the same effort to international marketing of cranberries as a grower owned cooperative, but maybe I am wrong.

The cost of educating foreign markets and introducing the unique flavor of cranberry is an expensive proposition. Ocean Spray has done a "half-ass" job in its efforts, but it is not an easy task for even a beverage giant.

In any case, I thought I would throw my two-cents into this discussion. It is for the grower/owners to decide the future of Ocean Spray. It is not for any anonymous "Business Person" to chose the future for the cooperative. I am simply expressing an opinion for the growers to listen to if they chose.

Response: Anon.
Sunday, 31-Oct-1999 15:03:00

209.244.244.247 writes:

To Business Person:

I find your responses informative and more closely aligned to the level plain thinking that will move this co-operative forward.
For the casual reader to this web site, as an grower/owner, your approach is more informative with many readers in our community than responders who employ journalistic rhetoric to drive points across.
Please continue to express your opinions.

Response: John Edwards
Monday, 01-Nov-1999

Tom,

I think you have to remove the emotion and think objectively about things. I offered postings on Oct. 24 and 25 that I put a lot of thought and time into and considered the options. My conclusions conflict with your opinions and that is fine - but I don't think that you are really reading my postings - you're just reacting to them.

I was hoping that you would address my suggestion for restructuring OS, which you apparently ignored. Let me bring this back into the discussion and ask you and all others for their comments. As I stated in the post, I do not know if it is possible, but here it is (pasted from the Oct. 25 post):

To address issues of solvency and undercapitalization, perhaps the solution is to break the marketing arm of OS away
from the handling side of the coop. Issue an IPO for the marketing arm, restricting the majority of shares to be held by
growers. This way, the growers retain control in the long term and OS raises capital for market expansion. I have to
admit that this is only an idea and I don't know if it is possible, but here it is - you said you wanted ideas.

There it is. I have nothing else to offer this discussion at this point besides what is already mentioned on Oct. 24, 25. And Tom, I am not living in the past - I am looking to the future and for what is best for the long-term financially conservative (read: responsible) grower. It is very easy to react to ideas and respond emotionally. The net gain of such actions is zero.

Response: Tom Gelsthorpe

Friday, 05-Nov-1999

An IPO might address the issue of growers' solvency if the growers receive a price for their shares well in excess of their current $25 value. However, if that were a cash price -- a near certainty for an IPO -- any amount in excess of $25 would be subject to capital gains tax, whereas a stock-for-stock merger with an existing company could be arranged as a tax-free transfer of assets. So an IPO price would have to be much higher than a stock-for-stock price for the growers to come out the same.

Would an IPO address the issue of undercapitalzation? Maybe, if the price were high enough -- but it wouldn't solve the distribution problem. World-class marketers such as Nestle, P & G, Coke & Pepsi already have distribution systems in place which they could use to distribute an acquired brand name at little additional cost. Even a well-capitalized, partly public OS would lack the distribution system to go international or even to maintain single-serve domestically, and would likely have to enter into an agreement with such a world-class company (as it did already with Pepsi). Such an agreement would likely cede most of the profits in the expanded sales area to the partner, as OS apparently already did with Pepsi in single-serve. A partial IPO would likely be only a partial solution to OS's fix, and leave us in a deeper fix a few years' hence.
Then the world-class marketers would be at an even greater advantage.

The most important of your questions relate to the matter of "retaining control." The "control" issue seems to trigger strong emotions but nobody seems to be able to give figures that prove "control" exists now, or is feasible in the future. If growers "controlled" the berry price, it hardly seems likely that it would be well below the cost of production, that it would have declined as a percentage of sales for years on end, or that it would be well below the price paid to independents -- who make no pretense of control. Nor do growers "control" the marketplace in any meaningful sense -- if they did would there be a surplus? Would per capita consumption of cranberries have remained static while plantings increased and buried the market with unsold fruit? As I said before, if this is "control," what would lack of control look like?

So it seems that some growers have an emotional need to maintain the illusion of control, even though the reality is not there. In this regard, you suggest selling only a "minority" share in an IPO. What investors would want to buy a minority interest in a poorly run company with an inadequate distribution system? If growers don't want to give up "control," why should investors want to send them money, with no hope of attaining enough control to address the aforementioned limitations?

On the other hand, an existing business with world-class marketing capabilities and sufficient capital, if they bought majority interest in the branded business, could exercise control where it really matters -- maximizing the strength of the brand by using sound marketing principles, securing better management and distribution, achieving economies of scale in production and sales, and achieving greater power in negotiating with the grocery trade. In short, it would appear that a minority IPO would only be a halfway measure that would solve only a few problems and procrastinate on the big ones. A merger of the branded business could benefit both the acquiring company (through increased size, market power and profits) and growers (by increasing demand for fruit and making them stockholders in the big company). Growers seem to fear that doing business with a big company means subservience; that only the giant makes money. That's not true. Sugar suppliers, cardboard suppliers, regional bottlers; many participants in an industry earn a good living. Vertical integration of a company that is too small scale in several crucial areas may seem like "control" but where's the profit? Real profit is more important than the illusion of control. Trying to continue as a small coop competing in a global economy is iffy; a partial IPO is iffy, too. In the case of a merger with a proven global performer, GROWERS COULD BECOME OWNERS OF STOCK WITH A GOOD GROWTH RECORD. In the hands of a global giant, fruit that now sits in freezers running up electric bills could be sold for a profit and growers could benefit twofold -- as fruit suppliers and stockholders. What are we waiting for?

Response: John Edwards

Wednesday, 10-Nov-1999 16:03:41

128.119.99.203 writes:

Good points about a possible IPO - in light of your great comments this does not seem to be a viable option.

Addressing the important matter of control, I agree that the current situation is far from controlled. However, control can be regained with the implementation of better management structures that emphasize accountability. Indeed, radical changes are needed at OS - the current situation is the product of complacency at many levels within the company.

You mention a few large industries where small suppliers have prospered, but your comparison is not apples-to-apples. Using the relative success of a Central/South American sugarcane grower as a barometer for the future success of the North American cranberry grower is not a realistic comparison. In the same vein, "regional bottlers" enjoy substantial barriers to entry through licensing rights and are not producing a commodity product.

There is no doubt that something needs to be done soon and in a decisive manner. There are some very real benefits to a merger, especially in the area of marketing power. However, merger has its flaws and should not be promoted as the savior to the industry. Merger needs to be approached with great care because one primary goal of any publicly owned company is to obtain raw material at the best possible price, an obvious conflict with the goals of growers (although one could argue that OS has been very successful of late in this respect).

In some respects, discussing a merger is premature - I mean, do you really want the current team handling this most important decision?! Perhaps the best thing OS could do now is to immediately clean house and focus on recovering the business. How about some discussion on this board about how OS could improve their marketing and executives' accountability?

[email protected]

Response:

Wednesday, 10-Nov-1999 22:52:39

205.188.197.46 writes:

I think it's too late to save this coop. Whatever changes were necessary should have been made a few years ago. Unfortunately, we growers didn't know of the many problems. I believe the only solution that will keep many of us out of bankruptcy is a merger. It's not my favorite option either, but I believe it's far too late for anything else. OS is also too short of cash to try any kind of intensive marketing or promotion. There's certainly no room in grower returns to retain any more. Has anyone ever compared our retain percentage to other coops? 1999 is $7 out of $26 (ignoring incentives because we're all different). How does 27% compare to other coops? Surely no grower thinks he can afford any more!

Response:

Wednesday, 10-Nov-1999 23:44:48

205.188.192.159 writes:

The problem is, selling the coop at this time wouldn't get you what it's really worth either. So management has screwed the growers no matter what. They will laugh althe way to the bank.



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