Interactive Week
Time to market is taking on a new meaning for hundreds of cranberry growers who are making use of Ocean Spray's intranet.
When a driver for Gary Garretson's Slocum-Gibbs Cranberry Farm in South Carver, Mass., used to deliver a load of cranberries to a processing plant, Garretson would find out through the mail a week later that that particular load hadn't been red enough to earn the 5 percent bonus paid out for the reddest berries. If it had been docked for having too many stems and chaff, he'd find that out a week later, too.
With the intranet, results of each load are posted within two hours. From the farm office, Garretson can log on and see if it would be worth his time to let his crop ripen a few more days in order to earn the redness bonus. And if the last load was downgraded for too much trash, he can tell his harvesters to slow down and pick out more weeds.
"It's been a godsend to us," Garretson says of the intranet, built in the fall of 1998 by USWeb/CKS and used on November 1998's harvest for the first time. "It means more money in your pocket. It's an amazing management tool."
Times are good in the cranberry business -- even a small 15-acre, single-family farm can produce net income of $70,000 per year. Because Ocean Spray has created increased demand and owns the premium brand, the company's farmers have come to expect consistent returns of $60 for every 100 pounds of berries. But they also are under threat and need all the high-tech management tools they can come up with to maintain their lead on new competitors.
The $1.4 billion Ocean Spray (http://www.oceanspray.com/) farmer-owned cooperative has 70 percent market share nationwide. Its vertical integration from cranberry bog to processing plants to multimillion-dollar ad campaigns led to booming demand for cranberry juice in the late '80s and early '90s. But that growth has since leveled off to single digits per year, and the co-op is looking for new markets abroad and for opportunities for cranberries to be an ingredient in bagels and other foods.
At the same time, the cooperative's products are being pressed from beneath by new, lower-priced off-brands that have jumped into cranberry production to capitalize on the demand produced by Ocean Spray's marketing.
Though farmers with an extra 5 percent per truckload in their bank accounts this past fall may only be thinking about that immediate benefit of the intranet, it's in the longer-term, strategic areas of research and capital investment that the intranet will pay the lasting dividends.
That's because Ocean Spray has a chance to have it all: a brand customers are willing to pay more for, increased consumption as new markets open up and farmers with the technical expertise to be low-cost producers.
As competition increases, the 800-member co-op needs to be able to react quickly to challenges as they occur, to buy into board decisions about either new capital expenditures, acquisitions of other juice companies or changes in its marketing strategy in the same kind of time frame that a corporation of its size could.
"The intranet is going to be a great communication vehicle for us," says Brian Wick, manager of grower relations.
The research possibilities of the intranet promise more interest. For instance, Garretson, with a relatively large cranberry farm at 200 acres, has the wherewithal to devote part of his farm to research and development. He's working with the National Aeronautics and Space Administration and Brown University to use aerial infrared photography to try to pinpoint trouble spots in his berries that aren't visible to the naked eye.
If heat-sensing pictures overlaid on maps can show berries in the early stages of being stressed by drought or pests, he's going to post the results and techniques on the intranet for other farmers to copy and show to their local crop duster. "We're going to be able to establish a lot of techniques and communicate them quickly," Garretson says. "Farmers like me will explore the limits and others will benefit."
By this summer, Mike Dunn, manager of information technology applications development, plans to add an e-commerce element.
"Our growers are geographically diverse," according to Dunn. "This is going to be how growers communicate with each other and we communicate with them."
The Deep Red Line
At Ocean Spray, the color of the cranberries equates to quality. The deeper shade of red the berries are, the more money the farmers can make. The company's intranet is designed to let the farmer members of this $1.4 billion cooperative:
- Check the cranberries' color quality, so the farmers can decide whether to let the berries take more time to get to a deeper shade of red.
- Understand the details of capital expenditures and marketing plans.
- Learn about and share responses of cutting-edge research and production techniques.
**Reprinted from Interactive Week, January 19, 1999