Ocean Spray and Northland finally team up

- Last updated on GMT

Related tags: Ocean spray, Cranberry

After rejecting an $800 million offer for its juice business from
Northland Cranberries early last year, US co-operative Ocean Spray
has decided the time is right to enter into an agreement with its
rival.

In a $28 million purchase-and-sale agreement signed by the two companies, Ocean Spray​ will buy Northland's 172,000-square-foot cranberry receiving and concentrate manufacturing plant, as well as its adjacent office building, and the company's existing inventory of frozen, unprocessed cranberries. However, Ocean Spray will not buy the Northland brand or its retail juice business.

In addition, Ocean Spray will pay Northland $5 million to secure first option on the purchase of 14 Northland-owned cranberry marshes in Wisconsin, leaving three cranberry properties in the hands of Northland. Ocean Spray and its grower-owners will have 180 days to exercise the option of buying those acres at a set price.

Ocean Spray and Northland today also signed a 10-year agreement through which Ocean Spray will receive and convert into concentrate all of the cranberries produced by Northland and its contracted growers. Using that concentrate, Northland will continue to bottle, market and sell its own juice brands.

"Ocean Spray is growing, not only as a brand, but as a manufacturer of cranberry concentrate for the worldwide market,"​ said Randy Papadellis, president and CEO of the Lakeville, Massachusetts-based grower cooperative.

In July, the company announced it was rolling out a plumper version of its health ingredient onto the European market for use in bakery products in an attempt to improve a bottom line hit by high yields and low prices.

A couple of months earlier, the credibility of the cranberry as a health-giving ingredient received a boost when, AFSSA, the French government's food safety authority, confirmed that the powder and juice of North American cranberries (vaccinium macrocarpon) "help reduce the adhesion of certain E. coli bacteria to the urinary tract walls"​.

Gunter Haesaerts, managing director of Gika, which distributes Ocean Spray's ingredients in France, said he is currently working on another four health claims for the product, aiming for another approval in 2005.

This could feasably be the only fruit with this status for the considerable future as the successful claim was made possible by million dollar investment into research on this cranberry species.

"Blueberries also have significant benefits but the blueberry industry is scattered worldwide, with no major producer willing to invest to this extent. Ocean Spray has 65 per cent of the world's cranberry production and had the muscle and resources to invest in the science,"​ said Haesaerts.

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