In a close vote cranberry co-operative Ocean Spray on Tuesday snubbed a joint venture proposal from soft drinks giant PepsiCo, instead opting to continue as a farmer-owned co-op.
Despite challenging finances in recent years the grower-owners at Ocean Spray - more than 900 fruit growers making it the world's largest cranberry producer - voted roughly 52 to 48 per cent against pursuing the Pepsi venture. The "no" verdict on the Pepsi deal means Ocean Spray will stop all talks with PepsiCo and other potential equity investors, bringing to an end a lengthy 'options' process launched by the board more than a year ago.
But they are still open to collaborations. "While the proposed joint venture with PepsiCo will not be pursued, the board and management will continue to explore opportunities to work with other companies to maximise the potential of the Ocean Spray brand and grow profits, while maintaining the Cooperative's independence," the co-operative said in a statement yesterday.
Pepsi's Tropicana juice drink is one of Ocean Spray's toughest competitors in the juice business, along with Coca-Cola Co.'s Minute Maid.
The cranberry fruit market has been hit in the past two years by high yields and low prices that damaged the bottom line for Ocean Spray. But a current modest pick-up in prices could herald a marginal recovery.
Early last year, Ocean Spray rejected an $800 million offer for its juice business from rival Northland Cranberries.