New Ocean Spray board may rethink Northland offer - The Packer

New Ocean Spray board may rethink Northland offer

03/13/2003 12:00:00 AM
Jim Offner

The group, in published reports at the time the offer was made public, said that it was premature to consider the bid at that time and said that the offer had a “disruptive impact.”

Gary Dempze, vice president and treasurer of Wisconsin Rapids-based Gaynor Cranberry Co. and one of the new members of Ocean Spray’s board, served as a spokesman for the coalition at the time Northland’s offer was made public. But he declined to comment on the matter March 13.

Along with acquiring Ocean Spray’s juice brands, Northland also proposed to pay $35 each for up to 3 million barrels of Ocean Spray growers’ berries in the first year of a 15-year purchase agreement.

However, in its initial rejection of the offer, Ocean Spray claimed that the supply agreement would cover less than half its members’ annual production.

The supply agreement proposed by Northland also is filled with escape clauses, Ocean Spray said, pointing to an option for Northland to drop the fruit price paid to remaining cooperative members.

Both Northland and Ocean Spray have suffered as the price of cranberries has dropped in the past five years. Since 1998, the price of cranberries has slid from about $60 a barrel to $20-25.

“That is exactly the sort of thing the new board will be addressing,” Phillips said. “It’s defining and refining the strategic direction for Ocean Spray, but it will be a combination of fortifying the brand, streamlining the company and boosting grower returns.”

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