Message Thread from Cranberry Stressline Forum
A Call To Action!
Friday, 19-Nov-1999 01:18:48
Message:
209.222.160.156 writes:
Our Board of Directors has spit in the face of us stockholders! How could they possibly
take such decisive action in light of the recent elections? I foolishly hoped our Board of
Directors could share the merge/sell decision with the newly elected Directors and the
stockholders. Now what reaction do they expect from the stockholders? Do they really think
that we’ll quietly stand on the sidelines and humbly accept their incredulous
decisions as we have in the past? I for one am not standing on the sidelines. I am
stepping on the playing field.
This is a call to action for like-minded growers to join in the process of calling a
special meeting to accomplish three specific actions: 1) Remove the existing Board of
Directors; 2) Elect a new slate of Directors that are firmly committed to fully and fairly
exploring the sales/merger option; 3) Immediately retain Merrill Lynch to begin the
process of seeking the best offer. Of course final determination is left to the
stockholders (51% sale or 75% merger or do neither). The slate for the new Board can be
developed over the next several days and would likely include existing Directors that are
committed to the above three actions.
Fellow Ocean Spray Grower/Owners, if you support this democratic proposal and share this
point of view please access the Grower Extranet site to step on to the playing field. Go
to: A Call To Action!
Nabiel Shawa
24.128.144.193 writes:
I agree with you entirely but there are some things we must do first. We must confirm
exactly what the board voted. On Monday Mass growers meet with directors, I'm sure all
growing areas have a similar schedule. We'll probably need an organized approach to
getting answers otherwise the whole thing will dissolve into a food fight. We need a
payment schedule verified by the board. So far we have only rumors. Then we need to know
exactly where we stand. The Makepeace company has done a lot of background work. Hopefully
they will step forward with that now. And of course, we will need the Bain report.
Understand that Ocean Spray will not give that to us under any circumstances so we will
need the cooperation of one or more sitting Directors. The place to start is with the
thirteen. Nabiel, we need a plan. Let's see what's out there.
L. Rinta
209.244.245.232 writes:
Don't yell fire in a crowded room. I agree with Rinta. It is irresponsible for Stressline
to post the current head line with out first confirming the actions the board has taken
and the reasons why.
209.222.160.20 writes:
How lethargic can you be? Every like minded grower needs to start stepping forward in
favor of a special meeting simply based on the official Ocean Spray release yesterday. Do
you truly believe at next week's meetings we will be privy to review the official Board
Minutes? Maybe they'll release to us an unfiltered copy of the Bain and Merrill Lynch
recommendations? Do you even believe they'll provide us a new, accurate payment schedule?
Will it make you feel better and change your position on calling a special meeting if you
learn the payments are $10 greater than the rumor?
The time for looking to the majority of this Board to act in a reasonable, responsible
manner is over. Wake up! They don't care about you or me!
Now please sign your name. It commits you to nothing. We need to start somewhere. If by
some miraculous, divine intervention the Board suddenly shifts to recant on yesterday's
decision, fine. We cease and desist in our efforts. In the meantime there are no waking
moments to waste. Remember how the Board has been discussing reducing the size of the
Board. I would not be astounded to learn that this Board takes action today or in the near
future to reduce the Board size in such a manner that it blocks-out the recently elected
pro-sales/merger candidates. You can't afford to wait! Step on to the playing field! We
can always return to the sidelines. As has been written before "What are we waiting
for?"
Nabiel Shawa
204.214.112.144 writes:
I thought about the board downsizing before the new directors could get in myself, but I
think there will still be enough grower-directors vs management-directors to start turning
things around. Maybe that's not the best way of putting that, but it makes my point.
Chere'
Winters
209.244.240.127 writes:
Nabiel, I did not take a personal shot at you. Where did you get your info from that OSC
has or will not act? Inside info. I repeat what Betty Brown has said about this.
"Shame on the Board member who is wispering in your ear". Disclose your info!
204.214.112.144 writes:
I too agree with Linda. We need to see the full Bain report to make any responsible
decisions.
We meet with our director here in Oregon on Monday. I'm hoping the amount of the returns
is only rumor and not fact!
But no matter what, doing nothing should not be an option. That's how we got to this point
in the first place!
Chere'
Winters
24.218.72.49 writes:
Stressline stands by the headline and the story.
Hal Brown,
Editor
209.244.250.104 writes:
Did not expect anything less from you Hal
|
165.247.34.216 writes:
We will go down in history for this fiasco.
205.188.192.172 writes:
Yes Hal, you are only reporting the tip of the iceberg. The Ocean Spray Extranet lays out
the bad financial news and more. Will someboyd please tell the CFO he has failed and kick
his butt out with no parashute? Where is the responsiblity here, cant make the books for
1999 and now cutting the legs off growers. I cant believe he is starving growers with his
big fat wallet and perks and no performance to show for it. Enough already!
63.21.165.54 writes:
A call to action: I am concerned that those of you who are in a rush to
dump a company that has had 70 years of success have individual agendas which do not
coincide with the wider membership.
205.188.193.22 writes:
I don't know who you are, but I can't believe anyone can still be making statements like
that. Assuming you're a grower, you've been paid $26.50 for your 98 crop; you've just been
informed that you've been overpaid and the overpayment will be taken out of future crops,
In addition, you've been told 99 crop payment will be in the 20's, which, ignoring the $7
retain could really mean in the teens. How can any owner/grower not be ready to riot? Does
this board really believe we'll let them get away with this? At worst they've violated
their fiduciary responsibility, at best they're just plain ignorant and somewhere in
between is negligence.
Writer of this note, whoever you are, if you really want me to agree with you, then
please, please tell me exactly how you think it can work. I don't want just "go team
go", I mean a
real plan, with details. Until then, I vote to throw the whole board out and sue them for
a variety of things my lawyer says are viable. It may be the only way to stay out of
bankruptcy.
Finally, writer of this note, we have a wonderful product that has provided us with a
wonderful way of life and a coop that once worked extremely well. But we have to accept
reality: those days are over forever. It takes a lot of guts to admit it but we're all
perilously close to the edge. How many of our fellow growers are we going to let file
bankruptcy before we're ready to do something. WE HAVE TO TRY TO SAVE OURSELVES! Our board
doesn't have the guts.
204.203.20.32 writes:
To the nameless person who is concerned about our agenda (or individual agenda) let me put
my individual agenda out in the open for all to see, read, and to know:
My Agenda is to have Ocean Spray pay me enough for my crop so that I can feed, cloth, and
provide housing for my family. Our combined families (my wifes and mine) have been growers
for over fifty years. Only once in that time did we suffer once before. We used a chemical
that was legal when we applied it, however by harvest time it was not legal and we here on
the west coast dumped out entire crop that year. It was a one year thing and Ocean Spray
was not responsible for our loss. Never before have we taken such a large percentage loss
as we are now and we are now being told it will continue for another year. And arer you
sure we are not coninciding with a larger membership?? Please contact AD Makepeace company
for the results of their survey. Over half the growers in Ocean Spray support some change
to get us back on track. And I can NEVER believe that most of the membership want to see
more growers go under. So since you seem to enjoy stirring up such anger and hate, please
continue. It will give more growers what they need to go public and demand change. And I
didn't quite catch your name either. Are you so ashamed of it?????
John Gibson
Our Agenda is Survival, Yours Included.
Saturday, 20-Nov-1999 07:19:40
24.128.144.193 writes:
If what we hear is true, the writer of that note probably lives in the mid-west, had a
great big crop, and probably no debt. (His directors voted as a bloc(?) not to consider a
sale or merger). He is just as worried about the surplus as the rest of us but he has been
lured into thinking that the problem with the Co-op is that there are too many of us, and
we are too demanding. And, once we have been agglomerated into bigger more efficient
farms, we can grow $20.00 fruit, and stay in business. Those of us that are left.
Certainly at 400 B/A Wisconsin can grow $20.00 fruit, this year.
What is that quote...'When they came for the Jews, I never said a word because I wasn't
Jewish, and when they came for the Poles, I kept quite because I wasn't Polish. When they
took the Dutch, it didn't effect me because I wasn't Dutch. When they came to my house,
there was no one left to speak for me.'
Just because you may not be in immediate danger, you ARE in danger. Think about what has
happened in less than a year, at the hands of those we have entrusted with our farms and
family welfare.
We may not all still be here to speak up, when they come for you.
L. Rinta
|
12.73.184.96 writes:
Linda, I wish you would have your e-mail address listed some way so that I could have
thanked you privately instead of on the stressline, for all of your intellegent input, We
appreciate all of the grower input, it helps us understand more of what is going on. We
are elderly growers that are heartsick at the current situation. THANK YOU LINDA and
others.
152.163.201.63 writes:
All WI growers don't feel this way!!! We have a big crop, and little debt. But WE KNOW WE
CAN'T SURVIVE ON $20 PER BARREL. Maybe we can get by this year. But we're not stupid. We
know we can't make it more than one more year. No one can. I personally believe no
director has the guts to stand up and say: "I can't survive on this." They think
they have to keep up some kind of rich guy image. That they have loads of cash in the
bank. No guts on this board.
204.214.112.150 writes:
Thank you WI grower! Its good to know that the rumor that WI is just going to sit back and
wait for most of the small farmers to go under, as an answer for the surplus, doesn't
apply to you.
63.21.164.121 writes:
I hope that people understand that businesses (whether cooperatives or not)can be turned
around with new management. There are many precedents for this: Chrysler (Iacocca), IBM
(Lou Gerstner), etc. The important thing is not to panic. Give a turnaround a chance. This
may take 3-5 years. This may entail some growers going out of business. But in the end,
you could very well end up with a truly powerful company. Ask anyone who sold out on IBM
when it was in the 20's. The stock now is about 110. Think about it.
205.188.193.188 writes:
I have thought about it. We are a cooperative. We support each other. We do not accept the
idea that certain growers are expendable. Every director has to act in the best interests
of all the growers, not just the ones with money in the bank. Remember, this drop in price
is not a minor variation that would affect only those growers who farm expensively or live
lavishly. This drop in price will drive virtually everyone out of business in a very short
time. We don't have the luxury of waiting five years or even three.
My greatest fear is that we'll have to get the courts involved. But what other choice do
we have?
Some out of business?????
Saturday, 20-Nov-1999 19:10:24
205.188.192.163 writes:
Some may go out of business but we'll have a strong company!!
That's the Co-op spirit I like to hear.
|
Re: A Call To Action!
Saturday, 20-Nov-1999 16:52:17
152.163.207.213 writes:
Unlike IBM or the other examples of corporations trading on the stock exchange, we, the
growers, are not one of millions, we are relatively few responsible for a large company.
Also, very few people would have the stock they owned in those companies as their sole
means of income as most of us do. So what, some will go out of business! ONE IS TOO MANY!
We have the opportunity to continue to be growers while having another means of income
with the sale. Three to five years. Come on. Three to five months is where we're at. I
guess I'll tell Farm Credit to wait five years, see what they think of it.
bac
205.188.193.188 writes:
Farm Credit's not going to like it. And very soon they will stop looking at the equity in
your land as support for loans. They will demand that your loans cash flow. Guess what.
They're not going to cash flow at $20 or even $25 per barrel. Not even in WI
Re: A Call To Action! - The Future
Saturday, 20-Nov-1999 18:04:44
12.18.241.247 writes:
Emotions are running high. Grower/Owners continue to feel they are in the dark about the
facts required to make an intelligent decision for the future of their company. It
certainly appears that change is not coming as quickly as many feel it should. In light of
all that, I would like to comment on Mr. Shawa's call to action and to provide something
for Grower/Owners to think about.
I feel some of the most intelligent postings have been placed by Nabiel Shawa during the
past few months. I do not agree with his solution of selling the cooperative, but that is
just a difference of opinion. He may be right, or I may be right that a merger with other
fruit cooperatives is a better strategy than selling all or part of OSC, only time will
tell. (If you missed my previous comments please review the forum's history.)
The sad fact is that Ocean Spray has lost its monopoly position in cranberry. This
monopoly position allowed OS to make mistakes over the years and continue to grow the
business successfully. I firmly believe that the high price of independent fruit in the
mid-1990's is a large factor in the surplus that is creating these problems. I also
believe that Ocean Spray tried to keep prices in line during this period knowing that
company's would reformulate their products and demand would drop over time. No beverage
company is going to push a low margin beverage that uses large quantities of an $85.00 (or
higher) per gallon concentrate. The independent growers received a windfall during those
years and OSC growers did not. My guess is that they can weather this storm more easily
than the grower/owners of the cooperative.
My opinion is this.
1) Ocean Spray has mis-managed the business because management does not know how to
function in a competitive envirnoment. Management came up through the ranks when building
the brand under monopoly control was easier. They did a very good job in that environment.
2) The SAP implementation was started too late to be successful. The sad part is that many
members of the team are/where valuable OSC employees and could not make it work despite
their best efforts. (I think it is important to remember the people who continue to do
their best for the grower/owners in a very difficult environment. Management is
responsbile, don't let your anger discourage all employees.)
3) The Board is too large. Find a way to reduce the Board size to 12 or 15. At that point
the only Board decision should be "Keep management, or replace management".
4) Cranberries have entered a normal, yet severe, (for most other crops) agricultural
cycle. Sadly, some small, less efficient farms will not make it. This is the nature of
agriculture (at least agriculture not subsidized by the Government), and is a necessary
aspect of a free market economy.
5) Management has become too bureaucratic and political over the past decade. The Senior
Managers are intelligent people placed in roles not well-suited for their skill sets.
Interesting how the senior people in Manufacturing, Grower Relations, Information
Services, and Marketing all came from Finance. Cross-training is great, but pull too many
out of their comfort zone and their area of expertise, and mistakes will be made. These
managers are intelligent people, yet I disagree with their much of their management style.
Politics became the rule, hard work and free thinking became secondary. (Just an opinion)
6) Henderson was ... an interesting idea.
7) Ocean Spray is a marketing company, not a manufacturing company. Think about how to get
back to basics. Some companies are excellent at manufactuing ... let them do it. Co-pack
to cut costs. You have good business people to manage co-packing. Sell and close more
plants. The union shops are not worth the hassle. Let somebody else, better suited for it,
manage the lines.
8) Get through whatever changes the grower/owners feel is right. Don't delay to a point
where you lose all the bright, hard-working employees within your company. (and for those
not familiar with my postings. I am not a current employee of OSC or a competitor).
The Ocean Spray brand is a valuable asset. Take Mr. Shawa's call to action seriously and
make the changes necessary to end the turmoil within the cooperative. I don't know what
the Bain report says, but you should. If mis-management was the major factor, find new
people to bring the cooperative back to where it should be. If outside factors caused this
crisis, let management (some new and some old) find a solution.
I continue to wish the grower/owners and employees of OSC the best. These are difficult
times. It seems it is time for "A Call To Action!"
Business Person
63.21.165.171 writes:
Excellent analysis. In any event, some growers who are incompetent/inefficient will go out
of business regardless of what happens to OSC. Those who are looking for a sort term
solution are only concerned about their own particular issues.
209.244.240.27 writes:
I would just like to comment that The Business Person's editorials and responses always
seem to make logical sense.
They are neither extremist or 'partyline-ish' as so many of the opinions shared in this
web-site are.
I would appreciate, Mr. Shawa, if you could comment on your opinions of these points put
forth. I read your comments and are aligned with the majority of your opinions, but not
all.
I have to ask the question: Is it truly in the best interest of all parties, not to make a
concerted effort to make major structural/organization changes in this 69 year old
cooperative before cashing in? Or giving up, what seems like, the majority of control?
I have struggled with, and still struggle with the perception that a larger player in the
beverage industry would opt, eventually, to buy fruit ingredients needed to support the
brand at the lowest possible price. In the Medium/ Long-Term, where would that leave us,
considering a situation where the selling price needed to produce a reasonable return
would require us to price fruit higher than market?
Some thoughts in light of very troubling times.....
|
152.163.204.181 writes:
A merger/sale would give us an alternate income source outside of the berries that we
would continue to harvest. Whatever means of payment we received cash, stock, or a
combination thereof, we'd have the opportunity to decrease or eliminate the debt we're now
strapped with. Stock would allow you to sell some for this purpose and have dividends on
the remaining portion. All of this would allow us to be able to function as a true co-op,
getting the most as a group from current market conditions. I know I would at least feel
comfortable that our income was a true reflection of the market and not a convoluted mess
like this.
bac
|
209.222.160.134 writes:
I would agree that Business Person’s comments are reasonable and insightful. We seem
to agree on many points however I respectfully disagree on seeking Welchs and Tree Top as
the best merger candidates. Assuming you are a fellow Grower/Owner, what is your most dire
need and that of our company? In one word, I believe the answer is Capital (followed
closely by competence and stability). Washington State is renown for its apple industry.
This year many farmers didn’t even harvest their crop. Tree Top has its own crisis to
deal with. Welchs seems to be doing fine but I seriously doubt they have any desire to
infuse huge amounts of capital into our company. What would be the return to their owners?
I have heard vague claims of greater juice aisle dominance and combined efficiencies (on
the assumption that Welchs and Tree Top have excess production capacities), but these are
armchair economic analyses. Claims of savings through combined efficiencies is possible
but someone has to run the numbers (which requires access to information), determine the
levels of excess capacity, logistics, transportation costs, etc. And still, where is the
Capital we need? As Business Person correctly points out, the independents enjoyed a few
years of wind fall profits that enables them to better weather these turbulent times, not
to mention they’re still being paid increasingly more (in percentage terms) than we.
Apparently the new plan calls for the Capital for corporate’s needs to come from the
hides of us Grower/Owners.
Instead I see a much brighter future in merging/selling to a powerful international
corporation. A corporation with ample capital that can be infused into both the
Grower/Owners’ portfolio and into the label and juice processing assets they have
acquired. There are great potential efficiencies in this arrangement such as
manufacturing, distribution, marketing, and competent management. But we also need long
term stability. And finally, I for one am not advocating a sales/merger at any price or
any terms.
That is why it is so important to explore the sales/merger option. We need to determine
the true market value for our juice segment (brand name and tangible assets). Once we have
acquired the best offer we can then more accurately determine which path (major
restructuring vs sales/merger) is more likely to yield the greatest long term benefits.
This information and analysis must be openly shared and communicated. Finally it needs to
come to a vote. I firmly believe the majority stockholders must have the final say on this
critical decision.
As for the control issue, Thomas Gelsthorpe eloquently bashed any nonsense that anyone in
OS is in control. To paraphrase him; if this is control what does out-of-control look
like; if this is control when did we elect to receive a supposed $20 something a barrel?
Further we cannot control the expansion of cranberry planting domestically nor
internationally. The Doomsday Prophecies of massive international acreage w/ cheap labor
may occur (at some indeterminable point in the future) or it may not. Who can tell what
the future demand will be (see Tillson’s article) or what technological breakthroughs
will occur that will effect us? If at some future point a massive supply of cheap foreign
cranberries emerges, large enough to fuel a major product line in a global corporation
like Coke Cola and we maintain the status quo how will we then compete? What value, if
any, will remain for the "unlocking." Again I agree with Business Person that
the free market will ruthlessly determine the outcome, as it should.
Now, if you’re a Grower/Owner please step out of the gloomy shadow of despair cast
upon us by our Directors. Help shape our destiny through an open, democratic process. Step
into the light and onto the playing field!
Nabiel Shawa
|
I would like to clarify a few points in my previous postings. My belief that Tree Top
and Welch's are obvious merger candidates stems from a theory that a large fruit
cooperative will be able to compete with the beverage giants over the long-term. I would
agree that neither of these companies are probably interested in a merger given the state
of Ocean Spray, and, even if they were, OSC is not in the best negotiating position. I
would favor a merger with a Northland or other independent group of growers. I simply feel
that many coop members would prefer to retain the cooperative way of life if possible.
I believe strongly that you are correct in your effort to bring the grower/owners "on
to the playing field" and let the group decide the future for your company. If the
grower/owners believe it is time to cash in with a sale to someone like Pepsico, then that
is an owner's right. I feel compelled to comment because I believe the growers should be
prepared for the cycles that I suspect will follow a sale/merger as you describe it.
I applaud your efforts to fully explore the sale/merger option with all grower/owners. I
don't pretend to have all the answers, simply some opinions based on experience in the
industry and a time with your company.
Business Person
152.163.213.68 writes:
Business person, as usual yoiur 8-point list of opinions is balanced and insightful. But
my feeling is your are too charitable to upper management.
In point 1, you say "...monopoly control was easier. They did a very good job in that
environment." This is like saying that Mark McGwire did a very good job hitting
minor-league pitching. He proved himself in the Big Leagues; this management certainly
didn't./
SAP/ERP Manugistics and all that was swallowed hook-line-sinker by Bullock and his gang.
The more they lied about how well it was doing the more the performance couldn't meausre
up. They are certainly not the only company to have this implementation problems but for
those who wanted to ask questions the danger signs were there. This management did not ask
those questions.
#4 Cranberries have not entered a normal cycle. The coop has failed in its important role
to damp these cycles and this one is abnormal and severe.
#5 you are absolutely right here. Saying that these managers are intelligent is too much
of a generalization however. Several are over their heads -- way over -- what you call
"out of their comfort zone" "mistakes will be made." Well, that's an
understatement. Lesser mistakes have put people out of business out of work, in court,
etc. If there are so many experts in Finacne then why are the Finacnes so incredibly
bungled up now?
#6 please tell more! Henderson is a major investment!
#7 You're right we need not be a manufacturing coumpany. But it's alot more than
marketing.
#8 Bright, hard-working employees are already leafving.
Thank you, business-person. This is one time when free advice is appreciated.
--Lakeville person
12.18.241.135 writes:
Thank you for your response. Yes, I am somewhat charitable to management in spite of my
true feelings. I have been careful not to criticize specific people as my statements would
be influenced by personal experience and contact with these people. I worked for many of
them prior to this crisis. It is important to place as many facts in the forum, and to
keep my personal opinions regarding key managers to myself. These people are intelligent,
well-educated professionals who do not need me telling them how to be a manager. I
continue to make mistakes as a manager and hope that I learn from them, and do not make
the same mistake twice. I can't criticize their management ability, yet I can question
their style and comment on the politics that became prevalent in some departments over the
past decade.
I agree with your comments on SAP. Any system can work, but ERP implementation is
challenging. I would like to say that OSC uses too many consultants. The ERP process was
no exception. I am a firm believer that nobody knows the company like the people on the
inside. Consultants generally take what people say, the people that know the company well,
and summarize it for management at significant cost. Generally, employees know how to
solve problems, they just need an environment that allows them to make some mistakes in
the process. Fear of failure and passing the buck have become the rule at OS. Empower the
employees to solve problems and they will.
My personal perspective on Henderson is this. The plant was one man's dream. OSC attempted
to create a state-of-the-art facility without really understanding the technology
required. I do not know if all that automation is worth it. My belief is that more often
than not, simple is better. How man PLCs and computers are running that place? In
addition, a whole new management philosophy was attempted at start-up. The warm and fuzzy
people were hired to manage the plant, when what was needed was a strong leader.
Management by committee is warm and fuzzy but darn inefficient. All this built around a
Return on Investment based on backhauls. I never ran the numbers, but that size investment
paid for with transportation savings? I need to see those numbers to believe it.
Yes, it does take more than marketing. My point is simply to shift the resources away from
manufacturing and spend on international market development. Do what OSC has done well
historically and start saving money. I realize this is a harsh comment to the dedicated
people in the plants, but changes need to be made. These plants can be operated by other
companies and jobs can be retained.
Best of luck.
Business Person
|
128.119.99.250 writes:
I agree with everybody else on this board that OSC needs change. If the status quo is
maintained, the problems will only get worse.
Perhaps a merger is the answer. Tom Gelsthorpe has provided some strong arguments for a
merger. On the other hand, Business Person has cited some problems with a potential
merger. I tend to agree with Business Person's views. Merger could be a dangerous approach
at this time because OSC is no longer in a monopoly position. In addition, merger with the
wrong company could eventually create a market where long term returns to growers would
suffer.
A successful merger would unite two companies with similar goals, products, and
infrastructure so that the combined entity could reduce operating costs while
consolidating market share. In OSC's case, there might be further benefits to a merger -
such as increasing grower membership as a way to move closer to the supply side monopoly.
The likely candidate? As Business Person mentioned briefly in a previous post, Northland
would be this company. In this scenario, OSC would get closer to monopoly status on the
supply side and regain market share in the juice aisle. Sure, a merger with another coop
is a nice concept, but it would not accomplish as many desirable goals as a Northland
merger would.
A united Northland/OSC would position OSC for a potential future merger with a larger
company (Pepsi/Coke) because OSC would then have more clout both in the juice aisle and on
the supply end.
I'm not an expert on any of this, so it would be nice to hear more thoughts on this from
Business Person.
[email protected]
John's question
Monday, 22-Nov-1999 16:55:16
12.18.241.180 writes:
I appreciate your interest in my input, but I don't feel fully qualified to answer your
question. I personally like the concept of a multi-cooperative merger to take advantage of
economies of scale and consolidation of manufacturing. The Tree Top and Welch concept was
one where similar goals (marketing of Concord grape, Cranberries and Apples), products,
and infra-structure are aligned. I believe the growers need to look past the cranberry and
understand that the overhead can be more easily spread amongst additional pools, not just
cranberry and grapefruit. This is the basis for the concept. And no, it does not address
the short-term capital issues within the Ocean Spray community.
My reservations with Northland date back to my reading of their prospectus. My first
reaction was that the company was "top-heavy". This may have changed over the
past four years, I do not know. I felt the company would become too bureaucratic over
time. If I am wrong about their structure, and I could do the research, then they may make
an ideal candidate. The stock has not performed well, and I don't see this changing.
Northland should be a very motivated merger candidate. My concern is a merger with
Northland does not solve the problem.
It does bring more control back to OSC/Northland, but what does this mean? I am not an
expert on mergers and acquisitions, but how do you merge a public company and a
cooperative? I belief the thinking includes changing the ownership structure of the
cooperative and losing some or all of the benefits of being a Cooperative (yes I realize
those benefits probably escape most of the growers right now).
I just don't feel a merger with Northland is a big enough step in the right direction. The
company requires dramatic changes, as well as a decision by the grower/owners if they want
to "cash in" or continue with the coop way of life. I think OSC has served
grower/owners for many years, and there are people out there that can turn this around. I
just don't believe a large food company will provide the long-term return to the grower
that a cooperative can, provided it has solid management. Northland may be a step in the
right direction, but I don't think it is the solution to the problems that have been
expressed in this forum.
My recommendations are certainly a longer, harder road, but I think they will provide a
better, long-term solution for the grower/owners. I will once again say that it is up to
the grower/owners. Take Nabiel Shawa's "Call to Action" seriously and decide for
yourselves.
Business Person
205.188.200.56 writes:
DO YOU HAVE ANY INTEREST IN THE INTERNATIONAL MARKET DEVELOPMENT ?
A Call To Action! - The Future
Monday, 22-Nov-1999 12:16:28
12.18.241.40 writes:
Good question. No, I currently do not have any interest in whether OSC is successful
domestically or internationally. I am working on some projects that may change my
uninvolved status in the industry. If that happens, I will not continue to express
opinions in this forum as there will be a conflict of interest and my opinions will then
be tainted (real or perceived). OSC does have some talented people in the international
group that can develop these markets. They have always been hampered by a lack of
commitment to international market development. I suspect this has changed over the past
two years.
Business Person
Monday, 22-Nov-1999 16:06:39
128.119.99.250 writes:
I agree with everybody else on this board that OSC needs change. If the status quo is
maintained, the problems will only get worse.
Perhaps a merger is the answer. Tom Gelsthorpe has provided some strong arguments for a
merger. On the other hand, Business Person has cited some problems with a potential
merger. I tend to agree with Business Person's views. Merger could be a dangerous approach
at this time because OSC is no longer in a monopoly position. In addition, merger with the
wrong company could eventually create a market where long term returns to growers would
suffer.
A successful merger would unite two companies with similar goals, products, and
infrastructure so that the combined entity could reduce operating costs while
consolidating market share. In OSC's case, there might be further benefits to a merger -
such as increasing grower membership as a way to move closer to the supply side monopoly.
The likely candidate? As Business Person mentioned briefly in a previous post, Northland
would be this company. In this scenario, OSC would get closer to monopoly status on the
supply side and regain market share in the juice aisle. Sure, a merger with another coop
is a nice concept, but it would not accomplish as many desirable goals as a Northland
merger would.
A united Northland/OSC would position OSC for a potential future merger with a larger
company (Pepsi/Coke) because OSC would then have more clout both in the juice aisle and on
the supply end.
I'm not an expert on any of this, so it would be nice to hear more thoughts on this from
Business Person.
[email protected]
Monday, 22-Nov-1999 16:55:16
12.18.241.180 writes:
I appreciate your interest in my input, but I don't feel fully qualified to answer your
question. I personally like the concept of a multi-cooperative merger to take advantage of
economies of scale and consolidation of manufacturing. The Tree Top and Welch concept was
one where similar goals (marketing of Concord grape, Cranberries and Apples), products,
and infra-structure are aligned. I believe the growers need to look past the cranberry and
understand that the overhead can be more easily spread amongst additional pools, not just
cranberry and grapefruit. This is the basis for the concept. And no, it does not address
the short-term capital issues within the Ocean Spray community.
My reservations with Northland date back to my reading of their prospectus. My first
reaction was that the company was "top-heavy". This may have changed over the
past four years, I do not know. I felt the company would become too bureaucratic over
time. If I am wrong about their structure, and I could do the research, then they may make
an ideal candidate. The stock has not performed well, and I don't see this changing.
Northland should be a very motivated merger candidate. My concern is a merger with
Northland does not solve the problem.
It does bring more control back to OSC/Northland, but what does this mean? I am not an
expert on mergers and acquisitions, but how do you merge a public company and a
cooperative? I belief the thinking includes changing the ownership structure of the
cooperative and losing some or all of the benefits of being a Cooperative (yes I realize
those benefits probably escape most of the growers right now).
I just don't feel a merger with Northland is a big enough step in the right direction. The
company requires dramatic changes, as well as a decision by the grower/owners if they want
to "cash in" or continue with the coop way of life. I think OSC has served
grower/owners for many years, and there are people out there that can turn this around. I
just don't believe a large food company will provide the long-term return to the grower
that a cooperative can, provided it has solid management. Northland may be a step in the
right direction, but I don't think it is the solution to the problems that have been
expressed in this forum.
My recommendations are certainly a longer, harder road, but I think they will provide a
better, long-term solution for the grower/owners. I will once again say that it is up to
the grower/owners. Take Nabiel Shawa's "Call to Action" seriously and decide for
yourselves.
Business Person
|
Tuesday, 23-Nov-1999 14:29:56
128.119.99.250 writes:
BP, thanks for your comments. Yes, I see your point about a merger with a coop that offers
complementary raw materials and products. This makes sense and hopefully OSC is looking
into that.
However, although I have not read their prospectus, I do feel that Northland has something
to offer OSC, certainly more than Nantucket Nectars can offer. I favor a Northland merger
in principle because they have been able to grab market share with new products and solid
(although not great) marketing. Yes, OSC was an easy target, but Northland has proven an
ability to compete and their people could prove a valuable asset to OSC. Also, Northland
would strengthen the coop membership, if the coop can remain intact with this type of
merger. Of course, without knowing more about Northland or the legalities of such a
merger, I can only speculate...
On a different note, before BP is lost to this board, I would love to hear what he/she
feels were the root causes of this mess. I have to admit that the whole merger/acquisition
discussion is getting a bit old. We can only speculate so much, without the necessary
information. This feeling is compounded by the fact that I still am not sure what exactly
caused this situation. It's hard to discuss a solution before the cause has been
identified. Of course, there will be disagreement on what the cause(s) were, but it would
be good to see what people think. Does BP or anybody else have any thoughts on this?
My underlying concern is that if growers create change for the sake of creating change,
nothing will improve and resources will be wasted. Without a good handle on what caused
this, we are doomed to repeat it. We can learn a lot from our mistakes....
[email protected]
|
Monday, 22-Nov-1999 10:48:22
205.188.200.56 writes:
DO YOU HAVE ANY INTEREST IN THE INTERNATIONAL MARKET DEVELOPMENT ?
Monday, 22-Nov-1999 12:16:28
12.18.241.40 writes:
Good question. No, I currently do not have any interest in whether OSC is successful
domestically or internationally. I am working on some projects that may change my
uninvolved status in the industry. If that happens, I will not continue to express
opinions in this forum as there will be a conflict of interest and my opinions will then
be tainted (real or perceived). OSC does have some talented people in the international
group that can develop these markets. They have always been hampered by a lack of
commitment to international market development. I suspect this has changed over the past
two years.
Business Person
|
Return to
Cranberry Stressline Form
Back to Front Page