Handlers' panel addresses crisis in Middleboro meeting "I'm not going to sugar coat this. We've been telling the growers for the past five years that we need more berries, while at the same time we're telling them there's a surplus coming. What's more stupid than that?" John Decas
3/23/00 The war of words was muted. There were friendly smiles all around. In a first of its kind meeting, all of the major cranberry handlers with the exception of Clement Pappas had representatives express their views on the current cranberry crisis. They fielded questions from a diverse audience of cranberry growers, town officials, the press, and members of the business community in a meeting organized by the Middleboro, Massachusetts Business and Industrial Commission. It's no secret that there have been differences between Ocean Spray and the independents, and between many Ocean Spray growers and Ocean Spray management. Northland has come under fire from both Ocean Spray and Decas Cranberries for their negative advertising. Ocean Spray has also been criticized for their less than enthusiastic endorsement of generic advertising and for their emphasis on aggressively challenging other cranberry companies for their share of the cranberry market. The discourse was civil. Differences in opinion between Decas, Northland and Ocean Spray were not debated. The emphasis was on educating those in the community not familiar with the cranberry crisis, and on offering solutions. With the exception of John Decas, panelists were circumspect in assessing blame and somewhat less than totally candid in accepting it. John Decas said what many growers have said in private, "Northland and Ocean Spray have the surplus." On being late to market 100% juice, Chris Phillips (picture) allowed that "Ocean Spray was behind the eight ball on that," going on to say that cranberry juice cocktail was just as healthy but "as for consumer perception, it fell flat." In addition to Decas and Phillips, other handlers sat on the panel. John Wilson represented Northland, Jonathan Ashley spoke for Cliffstar, and Rob Hiller represented his company. The meeting was called by the Middleboro Business and Industrial Commission and was moderated by its chairman, Jack Lucas. Jack Healy, Middleboro Town Manager addressed the group, as did Middleboro Assessor Barbara Erickson. (Middleboro is making a special effort to bring assessments in line with the real value of a cranberry bog given the drop in prices. More information about economics of cranberries in Middleboro ) Jack Healy and Jack Lucas both emphasized the importance to the town of Middleboro of the cranberry industry. Cranberry growers represent 20% of the commercial value of the town. Healy said "as the cranberry industry goes, so goes the future of the town and the region." Middleboro bills itself as "the Cranberry Capital of the World", as does Carver with its cranberry colored police cars. No matter how many cranberries Wisconsin produces, cranberries are an integral part of the historic farming heritage of this region and of Cape Cod. John Decas candidly advised the audience that he wasn't about to pull any punches, and he didn't, as he criticized Northland for their negative advertising, pointing out that while they market 100% juice they also market a sucrose sweetened product under their Seneca label. Although he didn't often identify the cooperative by name, it was clear his strongest criticism of the industry was aimed at Ocean Spray. Decas laid much of responsibility for the surplus on the doorstep of Ocean Spray for not taking action four or five years ago to stop new acreage. However, he did say of the independents that "one of the dumbest things we ever did was offering $80.00 a bbl.," adding that this sent out the wrong signal to growers who then went on to plant more acreage. Decas sees Canadian cranberry production as a major problem, and most of the acreage in Canada is under contract to Ocean Spray. Noting that we sent growers and scientists to help develop the Canadian cranberry industry, he said "building up Canada to promote competition, how crazy is that?" He explained that the Canadians have benefits not enjoyed by American growers, such as government paid research, subsidized loans, and even the lower cost of sugar which Decas speculates may come from Cuba. "I don't mind competing with Canadians," he said, "but I want a level playing field." "I am embarrassed and I am humiliated to be part of an industry that has gotten the grower to where he is today," Decas began. He then noted that he wished other CEO's could have been present, a likely reference to Ocean Spray CEO Robert Hawthorne who has, to date, not come before the press or the public. Decas and Rob Hiller proved to be the most outspoken as they were the only two panelists who, as principles in their companies, could talk without fear of misrepresenting their bosses. John Wilson, speaking for Northland, discussed the Cranberry Marketing Committee which meets next week to reconsider a marketing order. He said that his company supports a marketing order, saying that the meeting to be held in Minneapolis represents a "watershed moment" for the industry. In addition to supporting the volume restriction, he said that Northland supports generic promotion here and overseas. "Just eat more cranberries," he said, "it doesn't matter where you get them from." Chris Phillips sat in the center of the table next to rival and sometime nemesis John Decas (Picture). He was lukewarm to the sentiment of the rest of the panel that much more emphasis be placed on generic promotion. He said that Ocean Spray would continue "competing like crazy." Phillips seemed to subscribe to the old "coat tails theory" that the independents benefit enough from Ocean Spray advertising so it's unnecessary for the cooperative to sink a great deal of money into generic advertising. Other panelists disagreed, noting that generic promotion was common in the food industry and would help reduce the surplus. Phillips said that he had great confidence that the industry would turn around, but he knew that there would be pain and hurt. He said he could barely imagine the pain of a grower whose family has been in the business for generations. "In some ways we are at fault," he said, "Ocean Spray and the industry had some notion of the roller coaster effect of supply and demand." He also admitted that "Ocean Spray has been a little schizophrenic about over-medicating the brand," but went on to say "that will change with a new focus and new products trumpeting the health and wellness properties of cranberries." Rob Hiller, who is the chairman of the Cranberry Marketing Committee, also dates the beginning of the crisis to 1996 or 1997. He said that processors began to reduce the percentage of cranberry in juices from 30% to 27% or less and discovered that consumers didn't mind. When the surplus began to develop, they figured that if the customer didn't care, why should they increase the percentage. He said that volume regulation was only a short term measure and that the only way out of the crisis was to "look at every single angle to increase demand." He continued "it is a crisis. Growers are being paid less than what it costs to grow. The price continues to decline every day. What we need to do is work together to shore up prices." John Decas surprised the audience (pictures), and probably the panel as well, when he reached into his briefcase and took out a bottle of "Cranberry Apple 100% Juice Snapple" and a bottle of "Big Cran Nantucket Nectars Cranberry with other Natural Flavors," to illustrate how they deceive the customer by presenting themselves as cranberry juices. The Snapple label depicts cranberries and apples, yet their ingredient list is as follows: water, white grape juice from concentrate, apple juice from concentrate, citric acid, chokeberry juice from concentrate, cranberry juice from concentrate, natural flavor, red fruit and grape skins extract for color. He said that Snapple didn't even use cranberry for color. While the Snapple product is 100% juice, Big Cran from Nantucket Nectars is 15% juice. Cranberry is listed as the first juice ingredient (after water and cane sugar); but the drink also contains pineapple, grape, pear and apple juice, so it's anybody's guess as to how much cranberry juice it contains since it could contain just over 3% cranberry and just under 3% for the other four juices. Holding up the bottle of Snapple, Decas said, "our freezers are full and we allow people to sell this garbage!" He then asked the panel if they would go back to their companies and ask them to work together in Washington to get the FDA to force a truth in labeling directive to apply to cranberry juices. The only panelist not supportive of this was Chris Phillips, from Ocean Spray, which owns most of Nantucket Nectars. His position was that the main issue was on selling more cranberries no matter what percentage of cranberries the product contained. He took no position on lobbying the FDA for a truth in labeling regulation for cranberry juice. Tom Gelsthorpe, in the question and answer period, made the point that the FDA had what is called a "standard of identity" for some products (ketchup, mayonnaise and ice cream for example) that specified ingredients for certain labels (ice cream, lite cream, etc. picture). He said that consumers looking for the health benefits of cranberries would be misled by a label suggesting that the juice was mostly cranberry, when, in fact, it might contain 5% or less cranberry. The issue of inferior Russian and eastern European fruit coming into the United States labeled as cranberry was also discussed. Between 5 and 600,000 barrels come in each year without regulation by the FDA. As for trying to stop the importation of this fruit, Chris Phillips said that "Ocean Spray is absolutely involved in that." John Decas, in summary said:
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