National Cranberry

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  • Topic: Cranberry, Fruit, Berry
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9-688-122
REV: MARCH 17, 2006

National Cranberry Cooperative (Abridged)
On February 14, 1981, Hugo Schaeffer, vice president of operations at the National Cranberry Cooperative (NCC), called his assistant, Mel O’Brien, into his office and said: Mel, I spent all day yesterday reviewing last fall’s process fruit operations at receiving plant #1 [RP1] with Will Walliston, the superintendent, and talking with the co-op members [growers] in that area. It’s obvious to me that we haven’t solved our problems at that plant, yet. Even though we spent $100,000 last winter for a fifth Kiwanee dumper at RP1, our overtime costs were still out of control this fall, and the growers are still upset that their trucks and drivers had to spend so much time waiting to unload process fruit into the receiving plant. I can’t blame them for being upset. They are the owners of this cooperative, and they resent having to lease trucks and hire drivers to get the berries out of the field and then watch them stand idle, waiting to unload.

Walliston thinks that the way to avoid these problems next fall is to buy and install two new dryers [$40,000 each], and to convert our dry berry holding bins so that they can be used to store either water-harvested or dry berries [$7,500 per bin]. I want you to go out there and take a hard look at that operation and find out what we need to do to improve operations before the 1981 crop comes in. We’re going to have to move quickly if we are going to order new dryers, since the equipment and installation lead times are in excess of six months. By the way, the growers in that region indicated that they plan on about the same size crop this year as last. But it looks like the percentage of water-harvested berries this year will increase to 70% of total process fruit from last year’s 58%.

NCC and the Cranberry Industry
NCC was an organization formed and owned by growers of cranberries to process and market their berries. In recent years 99% of all sales of cranberries were made by the various cooperatives active in the cranberry industry. NCC was one of the larger cooperatives and had operations in all the principal growing areas of North America: Massachusetts, New Jersey, Wisconsin, Washington, Oregon, British Columbia, and Nova Scotia. Table A contains industry data for U.S. production and sales of cranberries.

________________________________________________________________________________________________________________ This case represents a major revision of the case “American Cranberry Cooperative” written by J. Tucker. Certain dates and financial data have been disguised. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1988 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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688-122

National Cranberry Cooperative (Abridged)

Table A

Data on U.S. Cranberry Harvest

Crop Year

Production/Utilization (in barrels)a
Acreage
Barrels
Fresh
Production
Harvested
per Acre
Sales

Process

Average Price
(all uses, $ per
b
barrel)

Five-Year Average
1945-1949
1950-1954
1955-1959
1960-1964
1965-1969
1970-1974
1975-1979

26,022
25,434
26,205
24,842
21,448
20,778
20,988

23.7
24.9
31.3
39.8
51.2
62.6
73.7

615,000
643,300
822,580
983,660
1,096,160
1,300,120
1,546,120

466,844
380,965
381,320
439,170
427,520
468,340
327,980

148,256
253,335
436,060
532,070...
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