Ocean Spray - Turning Cranberries Into Success

[Music] on Thanksgiving we all gather around the table and we turkey stuffing mashed potatoes and cranberry sauce cranberries are right there on that short list of foods that we eat every year to celebrate the holiday and there's a more than likely chance that when you bought those cranberries they had this label whether you bought them from a can or you bought them fresh to make the sauce yourself they probably came from the good people at Ocean Spray ocean sprays a brand that I'm sure we've all heard of but I'm guessing few of us have thought much about it we just eat our cranberries and we move on almost completely overlooking the brand but in this case that's really a shame because they're very unique I would even go as far as to say that their story is inspiring there are some lessons we can learn from them not just business lessons but life lessons lessons and teamwork in community as well as lessons in innovation and creativity but first do you know how they harvest cranberries it's some of the most intriguing stuff I've ever seen they're grown in a big bog on these long vines the fresh berries have a different method of harvest which is more what you would expect but further other products the farmers basically flood the entire area once everything is submerged they go through with this machine that splashes the water around and aggravates everything enough so that the berries detach from the vine there's these little air pockets inside cranberries that cause them to float and that's a good thing because otherwise this whole method wouldn't work so then there's a large pool filled with free-floating cranberries from there just round them up in your set it's such a cool and clever way of doing it you may have seen these commercials where the farmers are standing in the water with the berries well that's depicting the harvest the typical harvest time is around fall September through November which I think would help explain why they're associated with Thanksgiving Ocean Spray is the main grower of these cranberries it started back in 1930 by three cranberry farmers at the time there wasn't a huge demand for cranberries the three figured they would come to in an attempt to figure out how to better sell the berries and potentially create some new marketable products really they had a bunch of cranberries and we're trying to create ways to sell them the first product they sold was just what you would expect it was cranberry sauce and for years that was by far their core focus but there's an issue with that no one really ate cranberries outside of Thanksgiving sure they had some sales here and there but their entire business was heavily centered around that one time of year which was fine it was sustainable but there were 11 months of the year where there wasn't much happening and with that model a company could only get so big in the 1960s they decided something needed to change let's just think about this for a minute and let's put ourselves in the position of Ocean Spray their goal was to somehow get bigger to expand and the way I see it there were three real methods in which they could have done this one is trying to make their cranberry sauce more popular during those 11 months it would likely be done through marketing campaigns that focus on delivering that message I'd say this is the lowest effort method but also comes with the lowest payoff plus being able to look at it now from 50 years in the future we still associate cranberry sauce mostly with Thanksgiving if they really wanted to expand it was going to take a little more effort than buying a few commercials for cranberry sauce in July method two is expanding their product lines trying to figure out different ways to sell cranberries other than sauce they did already have the cranberry juice cocktail but they didn't place much emphasis on it it was just kind of a second thought trying to build upon that maybe a good idea along with getting in the lab and seeing what else they can come up with the third method is that they could have expanded into different areas of business I don't mean going out and investing in the phone company but maybe something like investing in the blueberry business in the end they ended up doing all three of these in the early 60s they retooled their cranberry juice recipe expanded into a new line of cran-apple drinks they started producing so many cranberries that they needed to invest in more efficient harvesting methods and that necessity is what led to that cool flooding method that I spoke about earlier in the 1970s they expanded into grapefruit that's when we saw the invention of their grapefruit juice and pink grapefruit juice in the 90s came the ruby red grapefruit juice 1993 was a big year because it marked the start of craisins dried cranberries which by the way is one of the best name products I've ever heard that was pure luck that the words cranberry and raisin combined so perfectly but they came together to form a two syllable word that perfectly describes the product and it sounds good too the craisins line was actually a big deal for them people buy it as a snack to eat on its own it's used for baking you can go out and see them in a salad bar and as of just a few years ago it's led to a whole line of craisins infused with other fruits that was the lesson in innovation and the importance of it in the case of Ocean Spray it was a necessity they first came up with the cranberry sauce but it wasn't enough so they came up with an entire line of juices even when outside of their cranberry comfort zone into the grapefruit business then they went one step further and introduced craisins they took a comparatively unpopular fruit and found out how to make people want it and they did it three times when I say the word innovative you don't think of cranberries but I'd go as far as to say that without innovation we wouldn't know the name Ocean Spray any guesses as to who owns Ocean Spray if you took a shot in the dark you'd probably guess it was publicly traded or maybe some rich guy owns it if you know a little about it you might guess that Pepsi owns it which is a good guess but wrong remember when I said Ocean Spray was started in 1930 by three farmers well over the past 87 years the business structure has not changed it's owned by farmers all the farmers growing the cranberries and grapefruits for Ocean Spray are the owners of Ocean Spray it's called a cooperative it's no longer three farmers it's over 700 farmers spread across the country they're mostly in the north but stretched to places like floor for the grapefruit farmers that's the unique thing about Ocean Spray when they expanded into the grapefruit business they didn't hire some farmers to grow a bunch of them the new farmers became owners of the business there's some big positives associated with this structure maybe the biggest is that all the farmers get to own their own farm and grow their own crops which are sold by their own business are not big corporate farms these are family farms people who love growing cranberries many of which have been doing it for generations there's a certain pride that's involved in it which provides motivation to grow some good cranberries which gives the consumer some good cranberries unlike most any company you see today Ocean Spray was started by farmers and has been owned by farmers for its entire existence and they pride themselves on that the reason that people have the perception that Ocean Spray is owned by Pepsi is because they do a lot of business with Pepsi so much so that as of 2012 they have what's called a strategic alliance let's be clear about what this means there's two similar terms that sometimes get confused joint venture and strategic alliance I actually talked about a joint venture in my VEVO video but it's essentially two businesses coming together to form a third business the two separate businesses still exist but now there's a third one as well that would be if Ocean Spray and Pepsi came together to form a new third company called Pepsi spray well that's a terrible name but you get it but that's not what's happening here what's happening is the other term strategic alliance this is essentially an agreement between two companies to work closely together according to the announcement that came from Pepsi at the time Pepsi handles manufacturing and distribution to an extent and they work together on marketing and innovation so it's still owned by the farmers and there's no third company created but the two are now working very closely together which you would think would only be good for Ocean Spray when it comes to manufacturing and distributing a line of beverage I'd say Pepsi knows what they're doing now I have to admit I didn't realize the extent of Ocean Spray success going into this I knew they made cranberries for Thanksgiving but their line of juices almost completely escape my mind and I didn't even realize they made the craisins I have to respect them for the fact that they've turned a Thanksgiving tradition into such a huge business a huge business that now has close ties with the massive business that is Pepsi and considering they've stayed true to their farmer owned structure well that just adds to it plus they did it with cranberries if it were apples I would understand it but cranberries I challenge anyone out there to take a food that's not too popular and create a business with it that reaches anywhere near the size of Ocean Spray not likely you'll succeed but maybe if you're inventive and work well enough with some others that have the same goal you might have a shot at it let me know in the comments your thoughts on Ocean Spray are you as impressed as I am I anticipate some of you may not be you might say give me a break they made cranberry juice from cranberries not all that innovative I'll agree with that statement but I think it's really oversimplifying the greatness isn't in the idea it's in the execution the risk they took by taking attention away from other things to focus on it the development of the drink itself expanding into other fruits the things we may not think about like bottling logistics marketing sales of a new product line not to mention the second level of innovation in perfecting and implementing a new harvesting method to allow the extra production and remember if we're looking at the narrow market of cranberry juice --is they didn't beat the other providers to gain their market share they practically created their own market definitely the cranapple and cran-grape market so any thoughts on cranberry juices sauces craisins or the neat way they harvest them leave them in the comments oh and also this was my first of two Thanksgiving inspired videos the next one will be out at the regular time on Wednesday the 22nd hope to see you there happy early Thanksgiving and you for watching [Music]

Channel: Company Man

Views: 268,818

Rating: 4.9545221 out of 5

Keywords: Ocean Spray, Thanksgiving, Cranberries, Cooperative, Farming

Id: 4iyfMmZlTJQ

Length: 11min 19sec (679 seconds)

Published: Mon Nov 20 2017