Nov. 8, 2002

Ocean Spray growers left in dark

By Mary Julius, Enterprise staff writer

Cranberry grower Betty Brown was shocked when she learned the chief executive officer of Ocean Spray Cranberries Inc. of Lakeville resigned unexpectedly on Wednesday.

"We had no idea this was coming," said Brown, of Middleboro. "No explanations have been forthcoming. The growers would sure like to see some."

Brown is one of many grower-owners of the Ocean Spray cooperative who found out Wednesday that Ocean Spray CEO Robert Hawthorne had stepped down. He was chosen to head the company in January 2000 and replaced Thomas E. Bullock, who retired after 18 years with the company.

"No rationale was given, and we're the shareholders," Brown said.

Growers in 2000 were optimistic that Hawthorne, the former president of Pillsbury Brands Group, had the experience necessary to turn Ocean Spray around at a time when growers were being paid less for their berries than it cost to produce them.

"He did stabilize the company, develop new products and improve returns to growers," said Peter D. Beaton of Beaton's Cranberry Growers Service in Wareham and a grower for Ocean Spray. "I am optimistic that the business and the industry are going in the right direction."

Since Hawthorne's arrival at Ocean Spray almost three years ago, net earnings increased from $59 million to $158 million in 2002. He also oversaw the successful introduction of the Ocean Spray White Cranberry juice drinks.

While the search for a new chief executive is under way, Barbara S. Thomas, a board member and former president of Warner Lambert's consumer health care division, will act as interim CEO. Thomas was named to the board of directors at Ocean Spray in fall 2000 and sits on the board of the Dial Corp. and Rayovac.

In addition to her three years at Warner Lambert, she also held positions at Procter & Gamble, Nabisco and Pillsbury.

Ocean Spray spokesman Christopher R. Phillips said the decision to resign was Hawthorne's, but said the cooperative's board felt it was time for a change.

"The board is very confident his decision was the right one," Phillips said. "The board took it as an opportunity to strengthen our direction and choose a leader that will take us to a higher level. We are looking not only for a proven brand builder, but an exceptional strategist, who truly understands the double purpose of Ocean Spray, which is to grow the brand and also preserve the family farming way of life for our growers."

Phillips said the board is strongly convinced that "keeping the brand within the cooperative is the right strategy."

"They feel it more strongly than ever," Phillips said.

Some growers disagree and feel Ocean Spray cannot compete with giants in the beverage industry, such as Coca-Cola or PepsiCo Inc.

"I firmly believe the only salvation for the (Ocean Spray) cranberry grower is to merge and sell the brand name," said Ronald W. Drollett of Plympton, an Ocean Spray grower for the past 22 years. "We could stay together as Ocean Spray cranberry growers, and leave the sale and distribution to professionals who have the ability to do it."

Drollett said he has always been proud to be an Ocean Spray grower.

"I'm not speaking harshly or slamming my company," he said. "I just don't want to see the business trampled any further. If we keep on this path of self-destruction, we won't have enough money for our kids to get into the cranberry business."

Hawthorne's turnaround plan has not happened, Drollett said.

"Owners in the cooperative have seen their property devalue and been forced to sell off uplands, gravel and timber to survive," Drollett said. "We have a giant wood tick on our back, sucking the daylights out of us, and the only ones making money are in management."

Cranberry growers Paul and Linda Rinta of West Wareham returned from Florida Wednesday night and were greeted with news of Hawthorne's resignation.

"I thought, this is just another chapter," Paul Rinta said. "I don't have any faith in Ocean Spray anymore. Hawthorne is probably resigning with a handsome bonus and going on his merry way."

While the Rintas sell some of their berries to Ocean Spray, they also sell fruit to independent handlers.

"I'd be in the poor house if I didn't," Rinta said. "I count my blessings there is an independent market. We're paid five to six months after harvest by the independents, while we have to wait about two years for our final payment from Ocean Spray."

Rinta and other growers are hoping they will learn more about why Hawthorne resigned.

"We don't know the particulars," Rinta said. "I haven't got a clue."