The Journal.
Canned or Homemade? America’s Biggest Cranberry Company Wins Either Way
Thu, 28 Nov 2024
Happy Thanksgiving! This episode was originally published in November 2023. Ocean Spray’s farmers are responsible for 65% of the world’s cranberries. It’s not a publicly traded company. It’s not a traditional private company, either. It’s a cooperative founded nearly a century ago and owned by roughly 700 families. WSJ’s Ben Cohen tells the story of how the cranberry got into the can and how the company is planning for a future beyond your Thanksgiving table. Further Reading: -These People Are Responsible for the Cranberry Sauce You Love to Hate Further Listening: -Are Rotisserie Chickens 'Inflation-Proof'? -The Twinkie: From Bankruptcy to Billions Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What is the significance of cranberries during Thanksgiving?
The classic Thanksgiving combination, turkey, stuffing, and cranberry sauce. The jammy side dish will be on our plates today more than any other time of the year. And to shine a spotlight on the cranberries that make up this Thanksgiving staple, we're bringing back an episode we made last year. It's about the biggest cranberry company in the world, Ocean Spray. Enjoy, and happy Thanksgiving.
Our colleague Ben Cohen won't stop talking about cranberries.
I was so fascinated by Big Cranberry. Like everything I learned about cranberries, I was just like going around to everyone last week being like, did you know this about cranberries?
Yeah, you sound like you're becoming a cranberry stan.
Do you know what the top five selling cranberry products in 2022 were?
I do not. Please enlighten me.
Okay. Number one. I'm not going to do it in order, actually, because I want to save the best for last. 64-ounce cranberry juice cocktail. Okay? 100% cranberry juice is also on the list. Okay. 64-ounce cranberry grape juice.
Cranberry grape is a fan favorite. I would not have guessed that.
three liters cranberry juice cocktail. So the three liters and the 64 ounce both make it on the list. And then also on the list, 14 ounce jellied cranberry sauce, that good old classic.
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Chapter 2: Who is behind Ocean Spray and how does it operate?
They really do appear on the table of like every home in America during Thanksgiving. It's like, you know, this thing like pops up out of nowhere once a year and it has this place in all of our hearts and, you know, maybe some of our stomachs.
The company that invented it is Ocean Spray. It does $2 billion in cranberry sales a year and it produces 65% of the cranberries in the world. The ingredients to its success include 700 families, a major berry panic, and some very hip grandmas. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
Coming up on the show, the company behind your can of cranberry sauce.
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Sean Cutts is a cranberry farmer in the Pine Barrens of Southern New Jersey. He worked there for his father when he was younger, and now he works with his own kids. Do you have a favorite time, like, of the season?
You know, to me, October is the most beautiful month of the year. You know, it's fall. The weather is beautiful. The leaves are starting to turn. And then when you have a cranberry bog that's just covered in crimson fruit floating on top, there's really not much more beautiful than that, in my opinion.
Sean's family have been cranberry farmers since 1901. They work pretty much all year long, from winter to fall.
In the wintertime, the bogs are flooded to protect the cranberry vines. And then in April, we drain the flood and the cranberries stay dry for the rest of the growing season until we harvest.
What's the Thanksgiving season like for you?
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Chapter 3: What led to the Great Cranberry Scare of 1959?
...proudly presents the package of the future. Today, the paper bottle with a cranberry apple drink.
In the 1990s, they come out with possibly, like, you know, the most lucrative innovation in the history of the cranberry industry, which is dried and sweetened cranberries that we know as craisins.
Craisins, the sweetest way to eat a cranberry.
Ocean Spray was figuring out how to capture a bigger market. But for its growers, a major decision was on the horizon. That's next. In 2004, the giant food corporation PepsiCo offered to buy a 50% stake in Ocean Spray. That would mean a big payday for the growers, but a potentially huge change in how the company worked. The co-op put it to a vote.
Sean Cutts, the cranberry farmer, was just out of college at the time.
Those of us who have future generations that we envision coming into the business in the future, we're generally in favor of keeping the brand as a co-op. Simply because even though we would have gotten a nice payout up front, long term, that's probably not what was best for our farms. And one of the great things about the cooperative for us farmers is because we own it, we keep all the profits.
But there was something attractive about the offer from PepsiCo. Here's Ben.
A lot of the farmers were actually quite interested in this proposal because they wanted to broaden product distribution and just generally have the scale that it's really hard for like 700 cranberry farmers to accomplish on their own. It was an existential vote for the future of this company, of this cooperative that had such an interesting past.
And so the vote was a 52-48 split in favor of remaining farmer-owned and independent, but really close, about as close as you can get. And I think it took a long time for the cooperative to recover from that split.
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Chapter 4: How did Ocean Spray innovate after the cranberry scare?
Chapter 5: What are the top cranberry products in America?
You know, to me, October is the most beautiful month of the year. You know, it's fall. The weather is beautiful. The leaves are starting to turn. And then when you have a cranberry bog that's just covered in crimson fruit floating on top, there's really not much more beautiful than that, in my opinion.
Sean's family have been cranberry farmers since 1901. They work pretty much all year long, from winter to fall.
In the wintertime, the bogs are flooded to protect the cranberry vines. And then in April, we drain the flood and the cranberries stay dry for the rest of the growing season until we harvest.
What's the Thanksgiving season like for you?
Well, the Thanksgiving thing, we're kind of winding down from the harvest. We've got a few little fall jobs that we do, cleaning our ditches and such, but we're pretty much in recovery mode. For our family, harvest is seven days a week, and it's night and day for a month straight. And so by the end, we're pretty wiped out. Hopefully, we're still all talking to each other and whatnot.
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Chapter 6: What is the history of cranberry farming in America?
But the month of November is a good time for us to rest a little bit and gather together as a family and be thankful for our blessings.
Sean's farm is part of Ocean Spray, which works a little differently than your average food conglomerate.
So Ocean Spray is a cooperative, which means that it is owned by the growers. And in the case of Ocean Spray, the growers are about 700 family farms scattered across North America.
Those families are the company's shareholders. 14 growers make up the board of directors, and they hire the executives that run the business. Here's our colleague, Bennigan.
So I think the best way to think about it is that these people grow the cranberries and then they hire people to grow the business. And what that really means is that in a cooperative, every cent of profits goes back to the farmers.
Ocean Spray has been set up this way almost from the beginning. How did Ocean Spray get started?
Ocean Spray was started in 1930 by three farmers who Ocean Spray today calls three maverick farmers. One of them felt this frustration, which is that there was really no way to sell cranberries year round. He ends up coming up with this sort of brilliant invention, which is cranberry sauce in a can.
And it turns out the market for canned products was so large and the competition among cranberry farmers was so fierce that a few of them decided that they were sick of competing with each other and they would band together. And so 1930 brings the Ocean Spray Cooperative. And that was really the beginning of this company that dominates the market for Thanksgiving cranberries today.
You can see why the families, these farmers, would prefer this model. But you mentioned that this company and these families, as a result, are sort of responsible for growing a majority of the cranberries in the world. How is that not a monopoly?
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Chapter 7: What makes Ocean Spray a unique cooperative?
For the first 30 years, Ocean Spray's business was pretty successful, but it relied almost entirely on one day, Thanksgiving. I'm ready to talk about the great cranberry scare of 1959. What was that? What happened?
Okay, the great cranberry scare of 1959, this topic that, you know, should have inspired, like, you know, competing Netflix and Hulu docs by now, and I'm shocked that it hasn't. 1959, Thanksgiving is still the cash cow for ocean spray.
One day in 1959, early November, the federal government finds that a batch of cranberries in Oregon and Washington has trace amounts of an herbicide linked to cancer in lab rats. So now, you know, suddenly, instead of looking at cranberries and seeing all the health benefits, people are walking down grocery market aisles and seeing cancer when they think of cranberries, right?
It was really a wake-up call for this business cooperative. What they realized was that they could no longer be so reliant on selling one product for a single day of the year. And in order to survive, it would have to innovate, it would have to develop new products, and it would have to diversify beyond jellied cranberry sauce in a can for Thanksgiving.
And so what did they wind up inventing?
A lot of stuff. Basically, every use of cranberry has been invented since the Great Cranberry Scare of 1959. So in the early 1960s, they bring out their first juice blend.
Ocean spray cranapple.
Not too sweet, not too tart.
With lots of vitamins.
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