SOMETIMES, THE CRANBERRIES GO STALE.
Ocean Spray is readying yet another round of new products and will boostmarketing spending as it scrambles to regain market share lost to cheapercompetitors.
Those plans follow a May downsizing that cut 100 jobs, roughly 15 percentof Ocean Spray’s headquarters staff, including long-time promo director BobFallon. The promotion unit has been rolled into Ocean Spray’s marketingdepartment under vp-marketing Stu Gallagher, reporting to senior vp NancyMcDermott. Yet Ocean Spray plans more promotion, not less, to turn aroundsales, and may move much of its estimated $40 million ad budget below theline.
“Instead of our traditional approach of heavy TV, we’ll do more promotion,p.r., and print advertising,” says Chris Phillips, manager of corporatecommunications and public affairs. “We need to spend aggressively to turnthings around.” Ocean Spray spent $32 million on TV advertising and $2million on other media last year, per Competitive Media Reporting, New YorkCity.
When last we visited the scene at Lakeville-Middleboro, MA, Ocean Sprayhonchos Kevin Murphy and John Emerson were touting the new Wellfleet Farmsline and pumping up promotion to right Ocean Spray’s ship. Since then,Ocean Spray cranberry cocktail sales fell nine percent, and Wellfleet saleshit only $39 million through March. Vice president-retail sales Emersonleft in March, and chief operating officer Murphy resigned after May’slayoffs. Talks with ceo Tom Bullock convinced Murphy that his wish for alarger leadership role was better sought elsewhere, Phillips says. Murphyhasn’t been replaced yet, and Emerson won’t be.
Ocean Spray repositioned flagging Wellfleet Farms in May as Ocean SprayPremium 100% Juices, and added two flavors. “We weren’t leveraging the fullvalue of the Ocean Spray name,” Phillips explains. “It was confusing forconsumers.”
Seems Ocean Spray’s success has become its downfall: When the brand hit bigin the early ’90s after doctors began prescribing cranberry juice forurinary tract problems, speculators planted scads of the stuff. Plants takethree to four years to fruit, and now there are one million more barrels atmarket than there were five years ago, Phillips says. That’s a lot of cheapfruit competing with Ocean Spray in the juice aisle. Private-label salesrose three percent to $214 million, while sales at main rival NorthlandCranberries jumped 70 percent to $99 million for 52 weeks ended March 28,per Information Resources Inc., Chicago. Ocean Spray still leads theshelf-stable juice category with sales of $436 million.
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