
Can the Ocean Spray CEO Save the Cranberry Business? - samsolomon
http://www.bostonmagazine.com/news/blog/2016/04/17/ocean-spray-cranberry-business/print/
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Aelinsaar
"...but now the bitter economics may spell disaster for Massachusetts’ largest
commercial crop."

I had no idea that cranberries of all things, fit the bill as the largest
commercial crop in Massachusetts. I'm shocked actually.

~~~
DiabloD3
I think it's because Massachusetts has nothing that can be described as a
large commercial crop. However, it isn't the largest, and Massachusetts isn't
the largest producer of them.

Wisconsin produces 60% of cranberries in the US(1), with Massachusetts
producing half of what Wisconsin does(2), 201k tons vs 94k tons, out of 343k
tons total. The rest of the producing states combined are half of
Massachusetts.

As for, what is their largest crop, if it isn't Cranberries? Nursery products
like ornamental flowers and shrubs(3).

1: [http://www.agmrc.org/commodities-
products/fruits/cranberries...](http://www.agmrc.org/commodities-
products/fruits/cranberries/)

2:
[http://archive.boston.com/news/local/massachusetts/2012/10/2...](http://archive.boston.com/news/local/massachusetts/2012/10/20/cranberry-
production-state/tFqFOnL323v1fsCdcL00lO/story.html)

3:
[http://www.netstate.com/economy/ma_economy.htm](http://www.netstate.com/economy/ma_economy.htm)

~~~
Aelinsaar
So... Wisconsin... The Cranberry State? TIL!

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sbov
Does anyone know, by what logic are the auctions price fixing? Generally they
seem like one of the fairest ways to determine a price - are they doing
something odd in their auctions? Or are they just grasping at straws?

~~~
tyingq
The auctions are run by the dominant leader in the space (Ocean Spray).
Supposedly they are selling off "excess product". The accusation is that they
are selling with a starting bid that is lower than the actual cost to make the
cranberry concentrate...on purpose, to manipulate the market.

Typically called predatory dumping.

~~~
morgante
I don't see how this can be considered predatory though.

It's still an auction. It should sell at the market price.

In theory, they should be able to open their action at $1 and that would be
totally fair. If they were _selling_ at $1 that would be a different matter,
but the auction structure should guarantee that goods aren't sold at
substantially below-market.

~~~
tyingq
I assume that's why it's currently just an accusation and not a given. It is
still possible to control pricing with an auction if you dump enough product
with no reserve price...basic supply/demand.

A cynic might say they chose the auction route specifically to avoid the
appearance of dumping, but ensured they would dump enough volume to get the
effect they wanted.

Nobody seems to be debating that the sales price is currently lower than the
actual cost to produce the product.

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Animats
$16 a barrel wholesale? Somebody needs to figure out a cranberry-based
alternative to Soylent and find a VC who considers that a "tech startup".

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p1mrx
Why don't they sell unsweetened craisins? Even the "reduced sugar" version
just replaces the added sugar with sucralose.

~~~
tyre
Cranberries are incredibly bitter to the average palette. While they have a
distinct taste, they need sugar to balance out the bitterness enough to enjoy
it.

Grapes have the opposite problem. If you've ever wondered why there isn't
grape ice cream (long shot!), it is because all of the flavor in a grape is in
its skin. The center is a generic, unidentifiable "sweet". That's great for
juices, where other fruits can add taste, but bad for ice cream. Grape skins
don't do well in ice cream—the texture freaks people out.

~~~
coredog64
Ben (or was it Jerry?) managed to make grape ice cream but it killed the dog
of the girl he was trying to impress.

~~~
shrikant
You're probably being downvoted because:

a) either someone wants a citation or,

b) that story is pure fiction
[http://www.snopes.com/food/ingredient/grapeicecream.asp](http://www.snopes.com/food/ingredient/grapeicecream.asp)

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dustinmoorenet
After reading the whole story, I feel that cranberries are a crop most people
don't care much for but is easy for a section of the country to grow. There
should be less growers to match demand.

~~~
zanny
And this is where economics conflicts with reality. The farther north you get,
the more limited your crop options are, especially in the boggy farmland that
hosts cranberries. If the world made sense we would have the southernmost
growers transition to alternate crops more likely to prosper in their regions,
but in practice go try telling PA farmers they need to change crops while the
MA ones can keep continuing on as they always have.

And that is the problem with Ocean Spray - its a coop of too many farmers
making too much of a crop, and it is hard for such an arrangement to just cut
its own workforce when all are meant to be equal.

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astrodust
I did not know that about Ocean Spray. Makes for an interesting case study in
ownership and management.

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dghughes
This reminds me of the Quebec maple syrup "mafia" the FPAQ you do what they
say or else you don't get to sell your syrup.

~~~
rhizome
I love Quebec syrup, but are you implying that there are freaky alternative
maple preparations that never see the market? See also: having to smuggle raw
milk cheese into the US.

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megablast
So the company was saved 13 years ago because the CEO had a brilliant moment
to market Craisins more? Does anyone else find this hard to believe? All the
people working for him, pushing possible solutions, and HE is the one that saw
the other guys eating these things as a snack, and that is what saved the
industry?

~~~
toomuchtodo
Fedex was saved by a night at the casino. Anything is possible.

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kobayashi
It's an interesting read, but I think it leaves me with more questions than
answers.

\- Why did Ocean Spray create the '85% auction rule'?

\- What effect did Craisins have on the raisin market?

\- I'd like more details on the dropped anti-trust suit, which seems glossed
over in the article.

I'm intrigued by the article, but left feeling unsatisfied. This is not top-
tier writing.

~~~
rhizome
I would guess that craisins have had a lot bigger impact on the crouton
market.

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kevin_thibedeau
Stopped buying Ocean Spray when they hit their bottles with the shrink ray two
years ago. Don't cheat your customers if you want to stay in business.

