Northland, whose sales totalled $102 million in 2002, had offered to pay Ocean Spray -- whose own 2002 revenue totalled around $1.1 billion -- royalties and license fees on new non-juice products using the Ocean Spray name. The deal would also have allowed the world's largest cranberry producer the right to use its brand on the non-juice products it currently sells.
According to an Ocean Spray statement released earlier today, "Ocean Spray has no interest in selling its branded assets." Furthermore, the statement suggested that Northland's very public overture was intended to "take advantage of the current circumstances" -- namely a severe drop in cranberry prices that has hit the industry hard -- and to cause disruption among its 900 grower-owners leading up to its March 8 annual meeting.
Ocean Spray said it also rejected the offer, among other reasons, because half of the payment would be in Northland stock, which would be problematic because "Northland has not had a record of good management or value," Ocean Spray asserted.
The two companies have long been at loggerheads. Northland filed a lawsuit last year that is still pending against Ocean Spray in the U.S. District Court for the District of Columbia alleging the cooperative has monopolized the cranberry-products industry to the detriment of competitors and customers.
Northland CEO John Swendrowski said in a statement that the merger would "provide Ocean Spray's grower-members a direct equity interest in our combined juice business and ... the future potential financial upside from our combined operations and marketing power."
Ocean Spray spent $16.5 million in measured media for the first 11 months of 2002, according to Taylor Nelson Sofres' CMR. Havas' Arnold Worldwide, Boston, handles the company's advertising account. Northland, which sells under the Northland and Seneca brand names, spent $8.8 million during the same time period. Ovation, La Crosse, Wisconsin, is its agency.